1970 (11) TMI 97 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of Entry 14 of Schedule A of the Bombay Sales Tax Act, 1959.
2. Whether the supply of food items wrapped or packed for takeaway qualifies as "served for consumption" under Entry 14.
3. Legislative intent and historical context of the term "served" in the relevant entry.
4. Distinction between service at the counter and service at the table.

Issue-wise Detailed Analysis:

1. Interpretation of Entry 14 of Schedule A of the Bombay Sales Tax Act, 1959:
The primary issue revolves around the interpretation of Entry 14, which exempts "cooked food and non-alcoholic drinks" from sales tax under specific conditions. The entry specifies that the exemption applies to food and drinks "served at one time at a price of not more than one rupee per person for consumption at or outside any eating house, restaurant, hotel, refreshment room or boarding establishment."

2. Whether the supply of food items wrapped or packed for takeaway qualifies as "served for consumption" under Entry 14:
The assessee, a registered dealer running a hotel and eating house, contended that items like jalebis, dal, shak, and tea supplied for takeaway should be considered "served for consumption" under Entry 14. The Sales Tax Officer and subsequent appellate authorities rejected this contention, arguing that the exemption applies only to food served at the table, not at the counter for takeaway.

3. Legislative intent and historical context of the term "served" in the relevant entry:
The court examined the legislative history of the entry, noting its evolution from the Bombay Sales Tax Act, 1946, through amendments in 1949 and 1953, to its current form in the 1959 Act. Initially, the entry exempted food "eaten" or "consumed" at the eating house. Over time, the scope was expanded to include consumption "at or outside" the eating establishment, but the term "served" consistently implied service at the table, not merely at the counter.

4. Distinction between service at the counter and service at the table:
The court emphasized that the term "served for consumption" implies service that includes providing necessary facilities for eating, such as plates, dishes, and waiters, which are typically available at the table. Service at the counter, where food is merely handed over without such facilities, does not meet this criterion. The court referenced dictionary definitions and legal precedents to support this interpretation, concluding that service "for consumption" must be at the table, not the counter.

Conclusion:
The court held that the service contemplated by Entry 14 is service at the table, not at the counter. Therefore, the supply of jalebis, dal, shak, and tea for takeaway does not qualify for the tax exemption under Entry 14. The reference was answered in the negative, affirming the Tribunal's decision and ruling that the assessee's supply of these items for takeaway is subject to sales tax. The applicant was ordered to bear the costs of the opponent.