K JANARDHAN HOTEL Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) THIS petition is filed by the assessee and the assessment period with which we are concerned is from April 1, 1983 to March 31, 1984. The notification had been issued by the Government on March 10, 1982, in exercise of its powers under section 8-A of the Karnataka Sales Tax Act, 1957 ("the Act", for short) reducing from 4 per cent to 2 per cent with effect from April 1, 1982, the basic rate of tax payable by any dealer under the said Act on the sale of food and drinks to their customers in a hotel or restaurant. By amendment to the Act, by Act 13 of 1982 with effect from April 1, 1982, the rate of tax was increased to 5 per cent. The question that arises for consideration is whether section 8-A (3-A) of the Act which was in force at the relevant time would be attracted to the facts of the case :

(2.) SECTION 8-A empowers the State Government to notify exemptions and reductions in tax. The State Government in that regard may issue a notification granting exemption or reduction in rate in respect of any tax payable under the Act- (a) on the sale or purchase of any specified goods or class of goods at all points in the series of sales by successive dealers or (b) by any specified class of persons in regard to whole or any part of their turnover. Section 8-A (3-A) refers only to alterations in the rate of tax payable under the Act in respect of any goods or class of goods. Therefore, it is urged on behalf of the petitioner that the amendment effected by Act 13 of 1982 raising the rate of tax from April 1, 1982, has no application to the petitioner and the petitioner is liable to pay tax pursuant to the notification issued on March 10, 1982 to which we have adverted to already. The authorities below and the Tribunal have taken the view that after the amendment with effect from April 1, 1982 to the Act, by Act 13 of 1982, the rate of tax payable by the petitioner is 5 per cent. Therefore, the question for our consideration now is whether the notification continues to be in force even after the amendment to the Act with effect from April 1, 1982.

(3.) LEARNED Government Pleader countering the submissions made on behalf of the petitioner urged that the notification issued reduced the rate of tax and therefore it is a notification issued under section 8-A (I) (a) of the Act. Consequently, section 8-A (3-A) would be attracted to a case of this nature, even though such reduction may be applicable to a class of persons mentioned in the notification and in this context she strongly relied upon the decision of this Court in [1993] 91 STC 37 [fbi] Shaw Wallace and Co. Ltd. v. State of Karnataka ).