2002 (12) TMI 583 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the assessee-hotel is a "bar attached hotel" within the meaning of entry 40 of the First Schedule to the Kerala General Sales Tax Act, 1963.
2. Whether the assessee was liable for tax on cooked food and beverages during the assessment years 1993-94 to 1996-97.

Detailed Analysis:

Issue 1: Definition of "Bar Attached Hotel"
The primary issue was to determine if the assessee-hotel, which only had an F.L.13 beer parlour licence, could be classified as a "bar attached hotel" under entry 40 of the First Schedule to the Kerala General Sales Tax Act, 1963. The court noted that the assessee had only the F.L.13 licence during the relevant period and obtained the F.L.3 licence, which allows the sale of all kinds of foreign liquor, only from April 1, 1998.

Analysis:
- The court examined the relevant entries under the Kerala General Sales Tax Act, 1963. Entry 40 (pre-amendment) taxed cooked food and beverages sold in bar attached hotels and/or star hotels/restaurants.
- Post-amendment, entry 46 included a definition of "bar attached hotel" as a hotel licensed under the Foreign Liquor Rules to serve foreign liquor listed under entry 60.
- Entry 60 classified beer and wine as foreign liquor.
- The court emphasized that the term "bar attached hotel" should be understood in its popular sense and in the context of the Abkari Act and Rules.

Issue 2: Tax Liability on Cooked Food and Beverages
The court had to decide if the assessee was liable to pay tax on cooked food and beverages, given their licence status and the provisions of the Kerala General Sales Tax Act.

Analysis:
- The assessee argued that they were not a bar attached hotel or a star hotel during the relevant period and thus claimed exemption under entry 12 of the Third Schedule.
- The Deputy Commissioner of Commercial Taxes revised the assessment, treating the assessee as a bar attached hotel based on their sale of beer, classifying it under entries 53 and 54.
- The Sales Tax Appellate Tribunal found that the F.L.13 licence did not make the assessee a bar attached hotel, as an F.L.3 licence was necessary for such classification.
- The Tribunal noted that the F.L.3 licence was the only licence allowing the sale of all kinds of foreign liquor in a hotel, which the assessee obtained only from April 1, 1998.

Conclusion:
- The court upheld the Tribunal's decision, stating that the assessee, holding only an F.L.13 licence during the relevant period, could not be classified as a "bar attached hotel."
- Consequently, the court dismissed the revisions filed by the State, confirming that the assessee was not liable for the tax on cooked food and beverages under entry 40 for the assessment years in question.

Final Judgment:
The court dismissed the petitions, confirming the Tribunal's view that the assessee, with only an F.L.13 licence, was not a "bar attached hotel" and thus not liable for the tax under entry 40 for the relevant assessment years.