STATE OF ANDHRA PRADESH Vs. CHINTALAPUDI RAMACHANDRA ROW

JUDGEMENT

(1.) ALL these three tax revision cases raise an identical question regarding the construction of the proviso to section 3(1)(b) of the Madras General Sales Tax Act of 1939 (hereinafter referred to as "the Act"). T.R.Cs. Nos. 28 and 29 of 1961 relate to different periods of the assessment year 1953-54, while T.R.C. No. 37 of 1961 relates to the assessment year 1954-55. The respondent in T.R.C. No. 29 of 1961 was the proprietor of Sri Ravindra Restaurant, Vijayawada, from 1st April, 1953 to 31 October, 1953, while the respondent in T.R.C. No. 28 of 1961, Chintalapudi Ramachandra Row and Veeramachaneni Gangiah, were the proprietors of the hotel from 15th November, 1953 till the end of the assessment year. The respondent in T.R.C. No. 37 of 1961 is the proprietor of a hotel called Brindavan Vilas of Vijayawada.

(2.) THE facts which are not in dispute are that Ravindra Restaurant was a military meals hotel which was serving to its customers meals, vegetables, mutton, curries, dal, chatni, karam, as also rasam (charu), sambar, buttermilk, ghee and drinking water. The liquids rasam, sambar, etc. were served or sold in this hotel apart from meals. The other hotel, Brindavan Vilas, which is a vegetarian hotel, serves meals, vegetable curries, dal, chatni, charu, pulusu, curd, buttermilk, ghee and drinking water to its customers and the liquids aforesaid are served or sold in this hotel. The assessees in all these cases submitted their returns and were assessed to tax by the Commercial Tax Officer, Vijayawada, at the rate of four and half pies per rupee under the proviso to section 3(1)(b) of the Act. The assessees contended that the proviso to section 3(1)(b) did not apply to the case, but that the tax should have been levied at the rate of three pies for every rupee of the turnover as per section 3(1)(b), and carried the matter in appeal to the Deputy Commissioner of Commercial Taxes, Guntur, who rejected their claims. A further appeal was preferred to the Sales Tax Appellate Tribunal, Guntur.

(3.) FEELING aggrieved by this order, the State has preferred the three revisions, challenging its correctness. The decision in Krishna Iyer v. The State of Madras ([1956] 7 S.T.C. 346) is to the effect that the distinction made under the proviso to section 3(1)(b) between the two classes of dealers in articles of food and drink with an annual turnover of Rs. 25,000 and more, i.e., (1) dealers in such articles of food and drink sold in hotels, boarding houses and restaurants, and (2) dealers in such articles of food sold elsewhere, has no reasonable or just relation to the object of the Act, which is to tax the turnover of the sales of a dealer, and that as the apparent discrimination, which results in one class of such dealers being singled out for the levy of tax at a higher rate, has not been explained by any classification with a reasonable basis, having a just and reasonable relation to the object of the Act, the proviso to section 3(1)(b) offends Article 14 of the Constitution, and is void and unenforeceable.