(1.) THIS writ petition has been filed seeking a writ of prohibition restraining the respondents from assessing or collecting sales tax purportedly under the provisions of the Andhra Pradesh General Sales Tax Act, 1957, hereinafter referred to as "the Act", from April 1, 1983, onwards. The petitioner herein as the Fateh Maidan Club. So far as the liability of the petitioner-club to pay sales tax in respect of food or drinks supplied or served to its members is concerned, the matter is squarely covered by a decision of this Court in Writ Petition No. 12920 of 1988 and batch dated February 14, 1992 [reported as Jubilee Hills International Centre v. Commercial Tax Officer [1992] 87 STC 227 (AP)]. It was held therein that the clubs come within the meaning of "dealer" under the Act and therefore, the clubs were liable to pay sales tax.
(2.) IT is, however, submitted by Mr. S. Dasaratharama Reddi, learned counsel for the petitioner-club, that though section 5-C of the Act had been given retrospective effect from February 2, 1983, the authorities have no power to levy tax in respect of the transactions that had taken place during the period from February 2, 1983 to June 30, 1985, as the amendment enlarging the definition of the words "sale", "turnover" and "tax" was given effect only from July 1, 1985.
(3.) THE taxable event attracting the levy is the supply or service of any food or drink or any other article for human consumption, and thus the taxable event has been clearly indicated in the section itself. The person, who is liable to pay the tax has also been mentioned in the section itself and that is the dealer running any restaurant or eating house or hotel. " Dealer" as defined in section 2 (e) of the Act means, any person who carries on the business of buying, selling, supplying or distributing goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes a club. This definition was incorporated in the Act from the beginning the Act was made. Therefore, the second component is also satisfied. The third requirement to be satisfied is the rate of tax. This has been clearly mentioned in the section itself and it is at the rate of five paise on every rupee. Then the fourth component relates to the measure or value to which the rate will be applied for computing the tax liability. The section provides that tax shall be levied at the rate of five paise on every rupee on the total amount charged by the dealer for the supply or service of the food or drink or any other article. Therefore, the measure or value to which the rate will be applied has also been clearly indicated in the section. Thus all the four components that enter into the concept of a tax have been mentioned in the section.