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TMI Blog1985 (10) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... section 14(2) of the Act in part holding that the tax amount of Rs. 7,673.58 levied at the rate of 8 per cent on the turnover of Rs. 95,919.85 was not tenable and that it was set aside. The dealer-assessee, at the relevant time was dealing in cold drinks, fruit juice, ice-cream, etc., and supplied them in its restaurant. The period involved is 1st January, 1977 to 31st December, 1978. He was assessed by the assessing authority by its order dated 14th January, 1982. The assessing authority levied tax on Rs. 95,919.85 at the rate of 8 per cent being the taxable turnover of sales of fruit juice. Besides this, he also levied tax on the taxable turnover of Rs. 40,207 at the rate of 5 per cent on the sale of ice-cream. Being dissatisfied with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing question of law is involved in the revision: "Whether, in the facts and circumstances of the case, the Board of Revenue was right in holding that turnover of Rs. 95,919.85 was exempt from tax?" We have heard Mr. K.C. Bhandari, learned counsel for the A.C.T.O., Jodhpur. The main contention of the learned counsel for the A.C.T.O. is that the Board has seriously erred in law in holding that there were no sales in favour of the customers and according to him the principles laid down in N.I. Caterers's case [1978] 42 STC 386 (SC) are not applicable. We may state that the Board has reached this conclusion after considering the same portion of the assessment order, which has been reproduced in its impugned order. The material part of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant appealed to the Supreme Court on special leave. It was held that the service of meals to visitors in the restaurant of the appellant was not taxable under the Bengal Finance (Sales Tax) Act, 1941 and this was so whether a charge was imposed for the meal as a whole or according to the dishes separately ordered. Their Lordships took into consideration Electa B. Merrill v. James W. Hodson LRA 1915-B 481, wherein it was observed as under: "The essence of it is not an agreement for the transfer of the general property of the food or drink placed at the command of the customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thirst. The customer does not become the own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customers does not partake of the character of a sale of goods. In the aforesaid case of the Supreme Court a review petition was filed. The decision of review petition has been reported in N.I. Caterers (India) v. Lt. Governor of Delhi [1980] 45 STC 212 (SC). While dismissing the review petition, it was held that the preparation and service of food both to the residents in the assessee's hotel as well as non-residents, having regard to the facts established in the case, remained a supply and service of food not amounting to a sale. His Lordship Pathak, J., observed as under: "........... that where food is supplied in an eating-house or restaurant, and it is established upon the facts that the substance of the transaction, evidenced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hotelier is one and indivisible not being capable by approximation of being split of into one for residence and the other for meals. After considering State of Himachal Pradesh's case [1972] 29 STC 474 (SC) and Northern India Caterers (India)s case [1978] 42 STC 386 (SC), the learned Judges of the Andhra Pradesh High Court in Durga Bhavan v. Deputy Commercial Tax Officer [1981] 47 STC 104 summarised the effect of the aforesaid decisions, as under: "1. If there is no right to carry away the food there would be no sale in favour of the customer. 2.. Even if there is a right to carry away if in essence the transaction is a transaction of service and not a transaction of sale it would not be exigible to tax. 3.. If, however, where the cus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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