STATE OF KERALA Vs. YENKAY COMPLEX PVT LTD

JUDGEMENT

(1.) The question raised in the revision petition filed by the State is whether the Sales Tax Appellate Tribunal was justified in holding that the Respondent hotel, which got classification as a Three Star Hotel with effect from 11-9-2002, is not liable to pay tax on cooked food and beverages sold in the hotel @ 8% under Entry 46 of the First Schedule to the Kerala Government Sales Tax Act (hereinafter referred to as the Act for short) for any period prior to the date of granting star classification.

(2.) We have heard learned Government Pleader for the State and Shri C. Unnikrishnan, learned Counsel appearing for the Respondent Assessee.

(3.) The Respondent is a resort hotel which was carrying on business during the whole financial year 2002-03. The application filed by the Respondent before the Central Tourism Department for classification of its hotel as a Star Hotel was allowed by the Regional Director and Convener, HRACC (Hotel Approval And Classification Committee), India Tourism, Chennai with effect from 11-9-2002. The case of the Respondent is that its liability for payment of tax on cooked food @ 8% under Entry 46 of the First Schedule to the Act starts with effect from 11-9-2002 and not for any period prior to the same. Therefore, the Respondent paid licence fee under Section 5B of the Act up to 10-9-2002 and thereafter from 11-9-2002 onwards the Respondent started paying tax on sale of cooked food @ 8%. However, the Assessing Officer treated the classification as Star Hotel with effect from the beginning of the financial year and levied tax on the entire turnover for the year 2002-03 @ 8%. Even though appeal at the first level was unsuccessful, on second appeal filed by the Respondent the Tribunal allowed the claim holding that classification of the Respondent hotel being made effective from 11-9-2002, the Respondent was liable to pay tax on the turnover of cooked food and beverages other than liquor @ 8% with effect from 11-9-2002. It is against this order of the Tribunal, the State has filed this revision petition for a declaration that the Respondent, which is running hotel even prior to the date of receipt of classification order as a star Hotel, is liable to pay tax at the rate provided under Entry 46 for the whole year 2002-03.