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TMI Blog1997 (11) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, subdued lighting and also music. High class crockery and cutlery are provided. The restaurant also employs highly trained stewards who are welldressed. Personal and prompt individual attention is given to the customers. The customers cannot take away any food from the restaurant for home consumption. Even unused or unconsumed portions of food and drink are not allowed to be taken away by the customers. There is no sale of any food or foodstuff across the counter. 2.. This Court in the case of State of Punjab v. Associated Hotels of India Ltd. [1972] 29 STC 474; (1972) 1 SCC 472 held that a transaction between a hotelier and a visitor to a hotel was essentially of service. As part of the amenities incidental to that service, meals are provided in the hotel at stated hours. The Revenue was not entitled to splitup the bills of the hoteliers on the ground that the bills included not only charges for lodging but also charges for foodstuff with a view to bring the latter under the Province of Punjab General Sales Tax Act. It is to be noted that the case dealt with the question of levy of sales tax on supply of food by a hotel to its residents. 3.. The case of the appellant is that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The position would be the same whether a charge was imposed for the meal as a whole or according to the dishes separately ordered. 5.. As a result of these two judgments, food served by a hotelier to its boarder or by a restaurant to its customer could not be subjected to sales tax. The Legislature tried to retrieve the situation for the States by passing the Constitution (Fortysixth Amendment) Act, 1982 by which subclause (29A) was inserted in the definition of "tax on the sale or purchase of goods" by amending article 366 of the Constitution. As a result of this amendment, tax on sale or purchase of goods was given an expanded meaning to include a tax on the supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink. 6.. Following the insertion of clause (29A) in article 366 of the Constitution, the Bengal Finance (Sales Tax) Act, 1941 was amended. The definition of "sale" in section 2(g)(iii) was amended to include, inter alia, any supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being any such supply by any restaurant or eating house (by whatever name called), has been made at any time on or after the 4th day of January, 1972 and before the commencement of section 3 of the West Bengal Taxation Laws (Second Amendment) Act, 1983 and the aforesaid tax has not been collected on such supply on the ground that no such tax could have been levied or collected at that time: Provided that the burden of proving that the aforesaid tax was not collected on any supply of the nature referred to in clause (a) or, as the case may be, clause (b) shall lie on the person claiming the exemption under this subsection." 7.. On August 24, 1981, the appellant moved a writ petition under article 226 of the Constitution alleging that it was not liable to pay sales tax in view of the aforesaid judgment of the Supreme Court in Northern India Caterers (India) Ltd. [1978] 42 STC 386. The High Court issued a rule nisi on the writ petition and passed an order of injunction restraining the Sales Tax Officer from proceeding with the aforesaid certificate cases. The writ petition was ultimately transferred to the West Bengal Taxation Tribunal. The Tribunal, following its decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evied by the Revenue nor collected by the hotel on sale of foodstuff when such sale constituted part of the services rendered by it to its residents. Therefore, even though the levy was validated retrospectively by subsection (1) of section 26A, exemption from payment of tax on such sales was given by clause (b) of subsection (2) of section 26A from the date of that judgment to the date of the passing of the Amendment Act. 10.. Sale of foodstuffs by a restaurant to its customers was dealt with in the case of Northern India Caterers (India) Ltd. [1978] 42 STC 386 (SC) where the judgment was pronounced on September 7, 1978. The exemption in clause (a) of section 26A(2) to the restaurants or the eating houses has been given from the date of that judgment. When section 26A validated the levy of tax with retrospective effect the Legislature took care to ensure that the persons who had not collected tax on the basis of the aforesaid two decisions of this Court will not be burdened with tax with retrospective effect. Since the two judgments were delivered on two different dates, two different periods of time were fixed for granting exemption to two different classes of sellers. Restauran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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