NABEESA MUNDOLI Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE two tax revision cases are filed under section 41 of the Kerala General Sales Tax Act, 1963 challenging the common order passed in T. A. Nos. 19 and 20 of 1997 on the file of the Sales Tax Appellate Tribunal, Additional Bench, Kozhikode. The assessment years are 1989-90 and 1991-92. The assessee is the revision petitioner. The assessee is running a hotel and restaurant and cooked food and beverages are served in the hotel. For the assessment years 1989-90 and 1991-92 the question that arises for consideration is whether the cooked food made in the hotel is liable for exemption under entry 57 of the First Schedule to the Kerala General Sales Tax Act, 1963. According to entry 57 of the First Schedule, cooked food including beverages not falling under entry 76a of the Schedule sold or served in hotels and/or restaurants the turnover in respect of which is Rs. 20 lakhs and above is liable to be taxed at the point of first sale in the State by a dealer who is liable to tax under section 5. According to the assessee, the turnover that should be taken for the purpose of entry 57 is only the turnover in respect of cooked food and beverages. The other items sold in the hotels cannot be taken into consideration for the purpose of fixation of the turnover. Another contention raised was that certain sales were effected to Indian Airlines. According to the assessee, the cooked food was sold to the Indian Airlines not by them. According to the assessee, M/s. Paramount Tower had sold the cooked food to Indian Airlines and M/s. Paramount Tower was assessed for the sale to Indian Airlines. Hence, it cannot be tackled on the assessee. The Tribunal upheld the findings of the appellate authority that the entire turnover in the hotel can be taken into consideration for finding out the limit of Rs. 20 lakhs fixed under entry 57.

(2.) THE case of the assessee is that in addition to the cooked food, other articles like fruits, breads, biscuits are sold. THE turnover of these items cannot be taken into consideration for fixing the turnover of cooked food. Entry 57 of the First Schedule to the Kerala General Sales Tax Act, 1963 is as follows : " 57. Cooked food including At the point Rate of tax beverages not falling of first sale (per cent) under entry 76a of this in the State 10. " Schedule sold or by a dealer served in - who is liable to tax under (i) hotels and/or restaurants, section 5 the turnover in respect of which is twenty lakhs rupees and above; and (ii) bar attached hotels and/or restaurants. THEre is no dispute in this case that the beverages sold do not come under entry 76a. What is the meaning of the words coming under entry 57, "the turnover in respect of which is twenty lakhs rupees and above". THE authorities have interpreted the turnover as the turnover of the hotel while the assessee will argue that it is the turnover of the cooked food. An identical question came up for consideration in the Madras High Court in the decision reported in State of Tamil Nadu v. Arasan Ice Creams and Sweets Restaurant [1996] 100 STC 333. THEre, a notification issued by the Madras Government in exercise of the powers conferred under the Madras General Sales Tax Act came up for consideration. THEre the provision that came up for consideration before that court was as follows : " Provided that the exemption in respect of bakery products shall not apply to a dealer whose total turnover in a year exceeds rupees two lakhs. "

(3.) HENCE, we are of the view that if the turnover of the cooked food and beverages as mentioned in entry 57 is less than Rs. 20 lakhs, then those items are not liable to be taxed. So far as the present case is concerned, the argument of the learned counsel for the petitioner is that there are items other than cooked food and beverages that are sold in the hotel and those items are also taken into consideration for fixing the turnover. In the light of the view that we have taken, we direct the assessing officer to consider afresh the turnover of cooked food and beverages as per entry 57 and pass orders accordingly.