STATE OF KERALA Vs. HOTEL AMRUTHA

JUDGEMENT

(1.) ALL these T. R. Cs. are heard together, because they arise from a common order. T. R. C. Nos. 3 and 11 of 1999 are at the instance of the assessee-Surendran, who is conducting a restaurant under the name and style "kohinnur Restaurant" in the premises of "hotel Amrutha", thycaud, Thiruvananthapuram. T. R. C. No. 3 of 1999 is with regard to the assessment year 1988-89 while T. R. C. No. 11 of 1999 is with regard to the assessment year 1989-90. T. R. C. Nos. 154, 163 and 167 of 1999 are revisions filed by the Revenue. They relate to the assessment years 1988-89, 1989-90 and 1990-91. The assessee in those cases is Hotel Amrutha, Thycaud, thiruvananthapuram. As a matter of fact, original proceedings in the above three T. R. Cs. were initiated under section 19 of the Kerala General Sales Tax act, 1963 (hereinafter referred to as "the Act") to the escaped turnover.

(2.) HOTEL Amrutha is holder of FL3 licence issued under the foreign Liquor Rules. FL3 licence is issued by the Excise Department under rule 13 of the Kerala Foreign Liquor Rules, 1968. This licence is issued to the hoteliers to run a bar. The assessing authority originally completed the assessment for HOTEL Amrutha for these years on May 5, 1990. At that time, it took the view that there has been no sale of cooked food in HOTEL Amrutha. It was subsequently noticed that such assessment was wrong on materials. Hence, the proceedings were initiated under section 19 of the Act to complete the assessment in the hands of the assessee. Notice was issued to HOTEL Amrutha as to why the food served in the hotel should not be assessed under the Act. The assessee filed objection stating that no cooked food is being served by the hotel. But a restaurant is being conducted by one surendran to whom the hotel had leased out space to run a restaurant. The food is prepared in the restaurant and is being served to the persons who reside in the hotel. Hence, the assessee took the contention that it cannot be taxed for the cooked food served in the hotel. The assessing authority did not accept the contention and added the turnover regarding cooked food in the account of the assessee-HOTEL Amrutha. Appeals were filed against the assessment orders. Those appeals were allowed by the appellate authority. Against those orders, the revenue went in appeal before the appellate authority as T. A. Nos. 130 of 1993 and 166 of 1993. So far as Surendran is concerned, he is conducting Kohinnur restaurant. For the assessment years in question, he contended before the assessing authority that the cooked food is not liable to tax as according to him, the turnover is less than Rs. 20 lakhs. According to him, it comes under entry 57, clause (i) of the First Schedule to the Act. But the assessing authority took the view that since the cooked food was being served in a bar attached hotel, it is liable to tax without any limit on the turnover. Thus, the assessment was completed taxing the cooked food. Against that assessment orders, appeals were filed before the appellate authority. The appellate authority took the view that so far as the assessee-restaurant is concerned, it is not a bar attached hotel and the assessee does not hold any licence for conducting a bar. Hence, the appellate authority took the view that it comes under entry 57, clause (i) of the First Schedule to the Act. As already stated, revenue challenged the orders of the appellate authority before the Tribunal as t. A. Nos. 130 and 166 of 1993.