YOGI RESTAURANT Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS reference under section 61 of the Bombay Sales Tax Act, 1959 (for short "the Act") is made by the Sales Tax Tribunal at the instance of the assessee to answer the following question :

(2.) THE applicant runs a restaurant in the name and style of "yogi Restaurant" at Nagpur where food-stuff and drinks are served. For the period from April 1, 1971 to March 31, 1972 the applicant was assessed for sales tax on the turnover of sales of these articles in the restaurant. One of the contentions raised by the applicant was that it was charging a minimum floor charge of Rs. 10 per person for the cabaret show in night time and these charges should be treated as entertainment charges and should be deducted from the total turnover. On consideration of various factual aspects, the said deduction was not allowed. The tax assessed was Rs. 5,353. 53. The applicant preferred first appeal before the Assistant Commissioner of Sales Tax, but without any success. It also preferred a second appeal before the Sales Tax Tribunal, but that too without any success. The applicant applied for reference on the basis of the Supreme Court decision in the case of Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 in which a view has been taken that meals served in the restaurant to non-residents for lump sum or according to dishes separately ordered were not liable to sales tax, since the levy was beyond legislative competence of the State Legislature in view of entry 54, List II of the Seventh schedule of the Constitution, Though this point was not urged before the Tribunal in second appeal, the applicant has been allowed, since an arguable point of law arises on undisputed facts.

(3.) NORTHERN India Caterers [1978] 42 STC 386 (SC) was preceded by two decisions of the supreme Court (i) State of Madras v. Gannon Dunkerley and Co. (Madras) Ltd. [1958] 9 STC 353 and (ii) State of Himachal Pradesh v. Associated Hotels of India Ltd. [1972] 29 STC 474 interpreting the words "taxes on the sale or purchase of goods" in entry 54 in List II as not including taxes on works contract or service of supply of food-stuff, etc. , in the hotel. The above three decisions led to the making of the Constitution (Forty-sixth Amendment) Act, 1982, which received the assent of the President on February 2, 1983, on which day it came into force. By this amendment, in article 366 of the Constitution following clause (29a) was inserted after clause (29 ).