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TMI Blog1989 (9) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... prepared at the place selected by the party. The menu is also determined by the partythe price whereof depends on the kind of food required. The food prepared in excess of the contractual quantity is taken back by the applicant, the party having no claim to it. The charges realised by the applicant represent the cost of materials, service charges and charges for supply of cutlery, crockery, etc. The supervision is left to the party concerned. The applicant merely acts as servant and/or agent to prepare, supply and serve the cooked food to the guests of the party. The supply of cooked food in the manner indicated does not constitute sale of goods. The charge realised is incapable of being split up into one for service and the other for sale of cooked food. The supply of cooked food and the service thereof under the terms of the contract do not constitute sale within the meaning of section 2(g) of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter called "the BFST Act, 1941"). The applicant is not liable to pay any sales tax on such supply of cooked food and service thereof. 4.. Respondent No. 1 (Commercial Tax Officer, Manicktola Charge), by treating the transaction as sale m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequent amendment of section 2(g) of the BFST Act with effect from 1st October, 1983. Prior to that, the legislature had no intention to levy sales tax on the food supplied to customers/guests for consumption. The period under challenge represents the four quarters ending 31st March, 1975 and the applicant did not, in fact, charge any sales tax on the consolidated amount in terms of the agreement with the parties. 9.. For a proper appreciation of the rival contentions of the parties, it may be useful to bear in mind the changes brought about by the Forty-sixth Amendment of the Constitution. Article 366 was amended as follows: "In article 366 of the Constitution, after clause (29), the following clause shall be inserted namely: '(29A) "tax on the sale or purchase of goods" includes- (a) to (e) .................. (f) 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 (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the 7th day of September, 1978 and before the commencement of this Act 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 made at any time on or after the 4th day of January 1972, and before the commencement of this Act 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 be on the person claiming the exemption under this sub-section. (3) ............" This Constitution (Forty-sixth Amendment) Act, 1982 received the assent of the President on 2nd February, 1983. Consequent upon the amendment of the Constitution, the definition of "sale" in section 2(g) of the BFST Act suffered an amendment in keeping with the amended provisions of article 366, clause (29A), sub-clause (f) and in identical terms in 1983 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be one and indivisible but would fall into two separate agreements, one of work or service and the other of sale. This judgment was delivered on 4th January, 1972. 12.. The next important case referred to on the subject is the case of Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 (SC). The appellant there ran a hotel in which lodging and meals were provided on "inclusive terms" to residents. Meals were also served to non-residents in the restaurant located in the hotel. It was held that the service of meals to visitors in the restaurant was not taxable under the BFST Act, 1941 as extended to the Union Territory of Delhi, and this was so whether a charge was imposed for the meal as a whole or according to the dishes separately ordered. It was observed that like the hotelier, a restaurateur provides many services in addition to the supply of food. He provides furniture and furnishings, linen, crockery and cutlery, and in the eating places of today he may add music, and a specially provided area for floor dancing and in some cases a floor show. This judgment was delivered on 7th September 1978. 13.. Subsequently, however, a review petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question whether supply of food for human consumption amounted to sale of goods, remained in a somewhat fluid state and depended on proof of various other factors, the legislature thought it fit to remove the infirmity by introducing the amendment. The object of such an enactment is to remove or rectify the defect in phraseology or other lacunae. Such an amending and validating Act, in the very nature of things has a retrospective operation. Such an Act is a permissible mode of legislation and is frequently resorted to in fiscal enactments [See Krishnamurthy and Co. v. State of Madras [1973] 31 STC 190 (SC), Shiv Dutt Rai Fateh Chand v. Union of India [1983] 53 STC 289 (SC)]. 17.. Relying upon the general principles of interpretation and the decisions of the Supreme Court, referred to above, we find that the validation clause in section 26A (1) of the BFST Act, 1941, as amended, has the effect of retrospectively amending the definition of ',sale" in section 2(g)(ii) as it then stood and which has subsequently been renumbered as 2(g)(iii) in 1984. The fact that in the validation clause, section 2(g)(ii) is referred to, makes no difference. The subsequent amendment in 1984 by nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmencement 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 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 sub-section." 21.. Mr. Roy Chowdhury contended that his case is covered by clause (b) of sub-section (2) of section 26A whereas Mr. Majumdar contended that, if at all, sub-section (a) may be attracted to the facts of the case. The reference to the different dates mentioned in clauses (a) and (b), it seems, has a direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Second Amendment) Act, 1983. 23.. According to the provisions of sub-section (2), whichever be the clause applicable to the case, the exemption would be available if the tax has not been collected on the ground that no such tax could have been levied or collected at that time. This again is subject to the proviso that the burden of proving that the tax was not collected on any supply of the nature referred tion clause (a) or clause (b), shall lie on the person claiming the exemption under this sub-section. Therefore, it is clear that in order to avail of the exemption, the applicant has to prove that he did not collect the tax during the period in question. This, however, is a question of fact which may be conveniently gone into by the assessing authority upon evidence or materials that may be placed before him. Incidentally, however, we may mention that annexure B to the application contains a specimen of an agreement entered into between the applicant and one Mr. T.B. Chowdhury in January, 1975. The agreement shows the date of supply, number of guests to be served, type of menu and the rate. Against the column for "rate" it is written as "Rs. 12.00 per head + S.T." At another ..... X X X X Extracts X X X X X X X X Extracts X X X X
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