LAWS(MAD)-2008-9-183

HOTEL PALMGROVE Vs. STATE OF TAMILNADU

Decided On September 30, 2008
HOTEL PALMGROVE Appellant
V/S
STATE OF TAMIL NADU Respondents

JUDGEMENT

(1.) THE revenue is on revision before this Court against the order of the Sales Tax Appellate Tribunal dated 29. 12. 1999 made in Tribunal Appeal No. 530 of 1998 and COP No. 286 of 1998

(2.) THE question of law involved in this revision is that the transaction representing catering service and hospitality rendered by the petitioner in their hotel represented the transaction of service and not sale as per the principle stated by the Supreme Court in the case of Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi (1980) 42 STC 386 and (1980) 45 STC 212.

(3.) WE heard the learned counsel. After the 46th amendment to the Constitution there was a sea change in the taxability of the transaction, as some of the transactions which are not actually sales have been defined as 'deemed sale'. The supply by way of or as a part of service or in any other manner whatsoever, of goods being food or any other article of human consumption or any drink (whether or not intoxicating) whether such supply or service is for cash; deferred payment or for other valuable consideration, such supply of goods has been deemed to be a sale of those goods by the person making it. The sale of food and drink supplied in a hotel is one of the items available in the First Schedule for taxation. Thus, the levy is lawfully made. Useful reference can be had to the judgment of the apex Court in the case of State of Tamilnadu v. Sangu Chakra Hotels Pvt. Ltd. , 77 STC 253. The Constitutional validity of the amended provision was upheld by the Supreme Court, which requires no reproduction. The history of the amendment has been elucidated in the judgment of the Supreme Court in the case of BSNL v. Union of India, (2006) 145 STC 91.