2000 (6) TMI 779 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of cooked food served in a hotel under the Kerala General Sales Tax Act, 1963.
2. Interpretation of FL3 license conditions and guidelines for Two Star Hotels.
3. Tax liability for cooked food served in a bar attached hotel.
4. Connection between a restaurant and a hotel for tax assessment purposes.

Analysis:
1. The judgment addresses multiple Tax Revision Cases (T.R.Cs.) arising from common orders related to the assessment of cooked food served in a hotel under the Kerala General Sales Tax Act, 1963. The cases involve the assessee, Hotel Amrutha, and Surendran, conducting a restaurant within the hotel premises. The disputes span assessment years 1988-91 and revolve around tax liabilities for cooked food sales.

2. The interpretation of FL3 license conditions and guidelines for Two Star Hotels is crucial in determining tax liabilities. The FL3 license held by Hotel Amrutha allows for the sale of foreign liquor for consumption within approved premises. The conditions specify the provision of liquor to residents and visitors partaking in European-style meals. The judgment analyzes whether the hotel's operation complies with these conditions and guidelines for Two Star Hotels.

3. The tax liability for cooked food served in a bar attached hotel is a key issue. The assessment authorities initially concluded that no cooked food was sold in Hotel Amrutha. Subsequent proceedings under the Act aimed to rectify this assessment, leading to disputes over tax obligations for cooked food sales in bar attached hotels. The judgment delves into the specific tax implications based on the nature of the establishment and the type of food service provided.

4. The connection between a restaurant and a hotel for tax assessment purposes is examined in detail. Surendran, operating Kohinnur Restaurant within Hotel Amrutha, contests tax liabilities based on the restaurant's separate identity and lack of an FL3 license. However, the agreement between Surendran and Hotel Amrutha establishes the operational link between the restaurant and the hotel, influencing the tax assessment criteria under entry 57 of the First Schedule to the Act.

In conclusion, the judgment dismisses the revisions filed by both the Revenue and the assessees, emphasizing the correct application of tax laws and guidelines in determining the tax liabilities for cooked food sales in hotels and bar attached establishments.