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TMI Blog2010 (11) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... ced with such a situation, the appellant invoked both the remedies. On the one hand, appeal was filed in the Court under Section 81 of the DVAT Act and at the same time, reference application was also filed before the VAT Tribunal, Delhi (hereinafter referred to as the Tribunal ) on the other hand. The appeal filed in the Court was registered as S.T. Appeal 7 of 2009. When that appeal came up for hearing on 18.04.2009, under the bona fide impression that more appropriate remedy was the reference application which had already been filed before the Tribunal the appellant withdrew the said appeal. The said appeal was accordingly dismissed as withdrawn on that day. 2. While the reference was pending, issue as to whether reference is maintainable or appeal is maintainable came up for consideration before this Court in other proceedings and vide orders dated 19.08.2009, this Court in the case of Shiv Shakti Kirana Kendra Vs. Commissioner, VAT decided the issue by holding that the proper remedy was to file the appeal under Section 81 of DVAT Act and not a reference application under Section 45 (1) of the DST Act. The appellant moved an application under Section 151 of the Code of Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for the condonation of delay primarily on the ground that the second appeal challenging the same order would not be maintained on the application of principle laid down under Rule-I Order 23 of the Code of Civil Procedure when the first appeal was withdrawn by the appellant itself and while withdrawing the said appeal, liberty to file a fresh appeal was not obtained. He has submitted that though the provisions of CPC are not strictly applicable, but the principle laid down in Rule-I Order 23 of the CPC would be applicable to such proceedings, as that is the principle based on public policy. In support of his submission, Mr. Sangal has referred to the judgment of the Supreme Court in the case of Sarguja Transport Services Vs. State Transport Tribunal, Gwalior and Others [AIR 1987 SC 88] where the Court held that the provision contained in Rule I Order 23, CPC would be applicable to writ proceedings. 6. While there is no doubt about the proposition of law advanced by the learned counsel for the respondent predicated on the provisions of Rule I Order 23 of the CPC, in peculiar facts of the present case, we are of the opinion that the said provision would not apply. As al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Value Added Tax in respect of assessment year 1997-98. The questions of law, which are proposed, are as under: (i) Whether on the facts and in view of the judgment of the Hon ble Supreme Court in (2000) 117 STC 1 = (2000) 1 SCC 521, the service charges of ₹ 44,45,994 collected separately by the respondent in its cashmemos issued in its restaurant/Coffee House are taxable under the Act of 1975? (ii) Whether on the facts and the position in law under the Delhi Sales Tax Act of 1975 sales of mineral water and aerated drinks effected by the respondent in its restaurant/Coffee House during the year 1997-98 were exigible to tax @ 7% or 10%? 9. The aforesaid questions arise in the following factual backdrop; The respondent assessee is a society registered under the Societies Registration Act, 1860. It has been given exemption under Section 12A of the Income Tax Act (hereinafter referred to as the Act ) and thus, treated as charitable institution . It caters to the needs of its members. The respondent is also a registered dealer of Ward No.98. Apart from other services provided by the respondent centre to its members, it is also maintaining a Coffee House and a rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a dealer so elects, actually received by the dealer, in respect of any sale of goods, made during any prescribed period in any year after deducting the amount of sale price, if any, refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period. 12. Relying upon some of the judgments of the Supreme Court and High Courts, Mr. Taneja argued that the expression sale price would mean the amount payable to the dealer as consideration for the sale of any goods and the concept of real price or actual price retainable by the dealer is irrelevant. The judgments on which the reliance in support of this proposition is placed by the learned counsel are as under: (i) K. Damodarasamy Naidu Bros. Etc. v. The State of Tamil Nadu Anr. Etc. [(2000) 117 STC 1] wherein it is held that the supply of food and drink can be by way of service or as part of a service or it can be in any other manner whatsoever. The words in any other manner whatsoever are of wide scope. The types of services rendered as mentioned in this judgment are not exhaustive. What is further held in this judgment is that the price that a customer pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel, in the case of respondent centre, service charges are separately over and above the price of food and hence the service charges are distinct and different than services . He has also produced copies of some the bills/vouchers raised in the aforesaid manner, which demonstrate that after giving the description of items consumed by a member while availing the services in restaurant/coffee house, total thereof is added and sales tax is charged thereupon. It is thereafter only that the service charges are added. He also heavily relied upon the reason given by the Tribunal making the aforesaid distinction between services and service charges . 14. We have given our due consideration to the respective submissions and have also gone through the same. In our opinion, the view taken by the Tribunal is without blemish and does not call for any interference. No doubt, the proposition of law that whatever is charged from the customers becomes the sale price and therefore, the dealer is liable to pay sales tax thereon is unquestionable but at the same time it cannot be treated as absolute principle of law, which is to be applied in all circumstances, irrespective of the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as of the said brokage. Even that is taken care of by the aforesaid modalities provided in the agreement whereby the essence of which is that all the employees are treated jointly liable for reimbursement of the said brokage. In these circumstances, we find that the Tribunal rightly distinguished the judgments cited before it, which were cited before us as well. Since we are in agreement with the reason given by the Tribunal dealing with those judgments, it would make our task easier by referring to the discussion contained in the orders of the Tribunal, which runs as under: 13. We have while appreciating the rival contentions of the Ld. Counsels of both the parties and have also carefully examined the records and also gone through the Law cited by both the parties. Here, at the outset, we may opine that we tend to agree with the contention of the Ld. Counsel for the Appellant that there is clear distinction between services and service charges . We find that the Hon ble Supreme Court of India in the case of K. Damodarswamy had held that supply of food etc. in a hotel or restaurant are services and the levy of tax on composite charges of boarding and lodging being servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Deputy Commissioner. Under these circumstances in the absence of any reasonable explanation by the Respondents, we are of the considered view that for the year 1997-98 i.e. Assessment Year in question too, that service charges collected by the appellant dealer are not liable to be included in the sale price of the appellant dealer 15. We, thus, answer the question of law No.1 in favour of the assessee respondent centre and against the Revenue. 16. Insofar as second question is concerned, the only dispute is as to whether mineral water and aerated drinks would attract tax @ 7% or 10%. It is not in dispute that as per the provisions of law, sales tax payable on the aforesaid accommodation is 7%. However, the only contention raised by the learned counsel for the Revenue is that this issue was pleaded before the first appellate authority and therefore, could not be taken before the Tribunal for the first time. Such a plea is required to be rejected. When under the law, the revenue collected tax on the sale of aforesaid goods @ 7%, it does not lie in the mouth of the Department to take such hypertechnical plea and try to charge more tax than what is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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