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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 ..... nt at 20, Park Street, Calcutta16. Apart from food and drink, it provides the customers with various services and amenities. The restaurant is airconditioned. It provides upholstered cushioned seating, 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 Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples laid down in the case of Associated Hotels [1972] 29 STC 474 (SC) apply in full force to its case. 4.. The question of leviability of food sold by a restaurant to its customers directly came up for consideration in the case of Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 (SC); (1978) 4 SCC 36 decided on September 7, 1978. That was a case under the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi. The question was whether the service of meals to casual visitors in the restaurant was taxable as a sale (a) when the charges were lump sum per meal or (b) when they were calculated per dish. It was held that the Revenue was not entitled to split up the transaction into two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 drink (whether or not intoxicating), where such supply or service was for cash, deferred payment or other valuable consideration, and such delivery, transfer or supply of any goods was deemed to be a sale of those goods by the person making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eunder as tax as aforesaid if this section had been in force at all material times. (2) Notwithstanding anything contained in subsection (1), any supply of the nature referred to therein shall be exempt from the aforesaid tax (a) where such supply has been made, by any restaurant or eating house (by whatever name called), at any time on or after the 7th day of September, 1978, 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; or (b) where such supply, not being any such supply by any restaurant or eating house (by whatever name called), has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner was entitled to tax exemption from September 7, 1978 till the coming into force of section 3 of the West Bengal Taxation Laws (Second Amendment) Act, 1983. However, in order to take advantage of this provision, the petitioner must prove that it did not collect sales tax during the period in question. 8.. Mr. Sanyal, on behalf of the appellant, has contended that section 26A of the Bengal Act has made an artificial distinction between supply of food by a restaurant in clause (a) and supply of food by any other body by whatever name called in clause (b). In clause (a) a restaurant or an eating house has been exempted from tax for food supplied on or after the 7th September, 1978, and before the commencement of section 3 of the West ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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