HOTEL DWARAKA HYDERABAD Vs. UNION OF INDIA

JUDGEMENT

(1.) This big batch of writ petitions is spawned by the Constitution (Forty-sixth Amendment) Act. 1982 (hereinafter referred to as "the Amendment Act"). The petitioners are hoteliers or licensees of bars and restaurants. They seek a writ of mandamus to interdict the State Government from levy and collection of sales tax from them in pursuance of the provisions of section 4(f) and 6 of the Amendment Act contending intra alia that the said provisions are ultra vires of article 368 of the Constitution and illegal and void and that in any case the absence of any amendment of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Sales Tax Act") incorporating the meaning of "sale" as provided in the Amendment Act, the provisions of sections 4(f) and 6 of the Amendment Act do not authorise the levy and collection of sales tax from the petitioners in respect of sale of foodstuffs to their customers.

(2.) The facts are not in dispute and lie in a narrow compass : The petitioners in the course of their business as hoteliers or keepers of bars and restaurants supply eatables and beverages to their customers. They are consumed in the premises and are not carried away.

(3.) In State of Himachal Pradesh v. Associated Hotels of India [1972] 29 STC 474 (SC); AIR 1972 SC 1131 the Supreme Court ruled that the supply of meals by the hotels to resident visitors was not sale of food and hence not liable to sales tax. The Supreme Court again in Northern India Caterers v. Lt. Governor of Delhi [1978] 42 STC 386 (SC); AIR 1978 SC 1591 held that there was no distinction between a case of meals supplied to a resident in a hotel and those served to customers in restaurants and even in the latter case the principles laid down in State of Himachal Pradesh v. Associated Hotels of India [1972] 29 STC 474 (SC); AIR 1972 SC 1131 apply. A review sought for of the said decision was also subsequently dismissed by the Supreme Court in Northern India Caterers v. Lt. Governor of Delhi [1980] 45 STC 212 (SC); AIR 1980 SC 674.