PANDIT RESTAURANT Vs. STATE OF U P

JUDGEMENT

(1.) This writ petition under Article 226 of the Constitution has been filed by M/s. Pandit Restaurant, 49/7, Generalganj, Kanpur which is a registered assessee with the Sales Tax Officer, Kanpur and is engaged in the business of a hotel who used to serve food to the customers staying in the hotel on being demanded by them from the petitioner-hotel. The customers are required to eat the food so supplied at the hotel premises itself. The petitioner has been paying sales tax. The Sales Tax Officer by assessment order dated October 3, 1983, assessed the petitioner for Rs. 20,800 and taxed it with Rs. 832 for the period from February 3, 1983 to March 31,1983, on the basis of the Forty-sixth Amendment of the Constitution. By this Constitution amendment Article 366 was amended and a new definition of the word "sale" was inserted. The definition as inserted by the Forty-sixth Amendment of the Constitution reads as follows:

(2.) Section 6 of the aforesaid Constitution amendment is a validation and exemption clause. Sub-section (1) of Section 6 provides inter alia that notwithstanding any judgment, decree or order of any court, tribunal or authority, no law which was passed or made before such commencement and which imposed or authorised the imposition of the aforesaid tax shall be deemed to be invalid or ever to have been invalid on the ground merely that the legislature or other authority passing or making such law did not have competence to do so.

(3.) At this juncture it is necessary to briefly point out that the Honourable Supreme Court in the case of Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 held that there is no sale when food and drink are supplied to guests residing in the hotel while for this proposition the Supreme Court had relied on its earlier decision reported in State of Himachal Pradesh v. Associated Hotels of India Ltd. [1972] 29 STC 474. The decision rendered by the Supreme Court was that even on meals served to casual visitors in restaurant was not taxable as a sale under the Bengal Finance (Sales Tax) Act, 1941 (as applied to the Union Territory of Delhi). This was held to be so whether a charge was imposed for the meal as a whole or according to dishes separately ordered.