EAST INDIA HOTELS LTD Vs. ASSESSING AUTHORITY SALES TAX CIRCLE

JUDGEMENT

(1.) THIS is an application by the petitioner (a branch of the East India Hotels Ltd. running in the name of M/s Oberai Palace Hotel, Srinagar) impugning the orders of the Assessing Authority as upheld by the Sales Tax Commissioner, respondent 2. levying tax under the Jammu and Kashmir General Sales Tax Act, 1952 (hereinafter to be referred to as the Act) on the sale of food by the hotel to its guests during the year 1962 -63, 63 -64, 64 -65 and 65 -66. The facts giving rise to the present petition may be summarized as follows.

(2.) THE petitioner is conducting hotel business at Srinagar and the petitioner provides various types of amenities to the guests who stay in the hotel and the supply of food is not the only but one of the amenities for which no separate charge is levied. In other words the petitioner contends that the guests of the hotel are charged a consolidated amount for enjoying all the amenities without defining the charges for each amenity separately. The petitioner filed its turn -over on demand notice being issued by the Sales -tax authorities for the years 1962 -66. In the turnover submitted by the petitioner it showed the amount of sales of food made to the guests during this period, but it claimed that such sales could not be taxed because they were not chargeable sales within the meaning of the provisions of the Act. It was further contended that S. 4 which is the charging section contemplated only a sale as contemplated by the definition given in the Sale of Goods Act and did not include within its ambit an indivisible or a consolidated sale. The same was said of S. 2 (1) which defined sale.

(3.) IT was further contended that the supply of food to the guests was only one of the amenities which may or may not be enjoyed by the guests and if it is not consumed by the guests they were not entitled to any remission on this account. Thus the necessary indicia or attributes of a legal sale were wholly wanting in the present transaction which was therefore not taxable.