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TMI Blog1962 (3) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... ada, from 1st April, 1953 to 31st October, 1953, while the respondent in T.R.C. No. 28 of 1961. Chintalapudi Ramachandra Row and Veeramachaneni Gangiah, were the proprietors of the hotel from 15th November, 1953 till the end of the assessment year. The respondent in T.R.C. No. 37 of 1961 is the proprietor of a hotel called Brindavan Vilas of Vijayawada. The facts which are not in dispute are that Ravindra Restaurant was a military meals hotel which was serving to its customers meals, vegetables, mutton, curries, dal, chatni, karam, as also rasam (charu), sambar, buttermilk, ghee and drinking water. The liquids rasam, sambar, etc. were served or sold in this hotel apart from meals. The other hotel, Brindavan Vilas, which is a vegetarian hote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a majority of two members that it is the proviso to section 3(1)(b) that applied to the case. But following the decision of a Bench of the Madras High Court in Krishna Iyer v. The State of Madras(1), and in the absence of any decision of the Andhra High Court on that point, they held that the said proviso is invalid as it offended Article 14 of the Constitution, and that the levy of the tax at the higher rate is illegal, and allowed the appeals. The other member of the Tribunal expressed the view that there is a principle underlying the scheme of taxation in the Sales Tax Act, and that the levy of the higher rate of tax on articles of food and drink sold in a hotel, restaurant or boarding house than on those outside, say, on the road-side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to a decision of this Court in Kadiyala Chandrayya v. The State of Andhra[1957] 8 S.T.C. 33. taking a contrary view. In order to fully appreciate the contention on behalf of the State, it may be useful to extract section 3(1)(b) of the Act with its proviso. "3 (1) Subject to the provisions of this Act(b) the tax shall, except in the case of goods specified in sub-sections (2-A) and (2-B), be calculated at the rate of three pies for every rupee in such turnover: Provided that if and to the extent to which such turnover relates to articles of food and drink sold in a hotel, boarding house or restaurant, the tax shall be calculated at the rate of four and a half pies for every rupee, if the turnover relating to those articles is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hotels than in other places like way-side shops. There may be small or big dealers even in such commodities, who run hotels or keep boarding houses. The State also can reasonably recover taxes at higher rates from prosperous dealers than from impecunious ones. From the standpoint of the dealer also, there is justification for the varied rates. The articles sold, the place where the business is carried on and the expectation of large profits are the characteristics of dealers who are distinct from dealers not covered by the proviso." In this view, their Lordships held: "The characteristics of the dealer covered by the proviso should be cumulatively considered and, if so looked at, the said characteristics will afford a reasonable basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d does not make it any the less an article of drink. Both solids as well as liquids served in these hotels answer the description of food. It is not possible to confine the meaning of the word "food" only to a solid, but not drink. as both of them have food value. We cannot accept the contention that the words "articles of food and drink" are expressions indicating categories exclusive of each other. In this view, when the drinks served in a hotel answer the description of food, the meals hotels which serve solids and liquids as part of the meals, vegetarian or non-vegetarian, would necessarily be governed by the proviso to section 3(1)(b). The other contention that, even assuming that the liquids mentioned above, viz., sambar, rasam, but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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