DELUXE DHABA Vs. STATE OF HARYANA

JUDGEMENT

(1.) Two points of law have been argued in this appeal under clause 10 of the Letters Patent, namely (i) whether the appellant-establishment is a dhaba and (ii) whether it is entitled to exemption with regard to the Indian food preparations under entry 72 in Schedule B to the Punjab General Sales-Tax Act (46 of 1948) (hereinafter called the Act).

(2.) The appellant M/s. Deluxe Dhaba, was established in 1962 as a joint Hindu family business and is carried on by Chandu Ram and his three sons, Girdhari Lal, Som Nath and Madan Lal. On December 30, 1967, Sales Tax Inspector Mr. Narang, visited the appellant establishment and asked information about daily sales. The statement of Madan Lal was recorded wherein he stated that there were five servants to whom monthly wages amounting to Rs. 150 were being paid in addition to meals and tea, etc. The monthly rent of the premises wherein the dhaba was being run was Rs. 114. Meals were being provided to four persons on monthly basis at the rate of Rs. 40 per head and about 50 to 60 persons visited the shop daily for taking meals and tea both the times. The daily sales amounted to about Rs. 50. In addition thereto, the sale of tea and other refreshments amounted to Rs. 10.00 per day. No accounts were, however, being maintained. On April 4, 1968, the Assessing Authority issued a notice to the appellant in form S.T. 14 requiring it to appear before him on April 8, 1968, as he was satisfied on information which had come into his possession that the appellant was liable to pay tax under the Act in respect of the period from April 1, 1963, to March 31, 1968, that the appellant had wilfully failed to apply for registration under section 7 of the Act and it appeared to be necessary to make an assessment under sub-section (6) of section 11 of the Act in respect of the above-mentioned period and the subsequent periods. In reply to that notice, Madan Lal, appeared before the Assessing Authority and made a statement on April 22, 1968, wherein he mentioned the names of the servants and their monthly wages and stated that in addition to those servants he himself, his brother and his father also worked. There was seating capacity for 53 persons. Some cabins having call bells and electric fans were also provided. No accounts were being maintained and no cash memos were being issued. The daily sales amounted to about Rs. 50. All articles were being purchased in retail from the bazar and there was no account with any shopkeeper. Thereafter, the Assessing Authority seems to have made some local enquiries and passed an order, dated October 30, 1968, after affording an opportunity of hearing to the appellant, holding that the appellant was liable to pay sales tax under the Act and necessary proceedings for assessment should be taken. That order was sent to the Assistant Excise and Taxation Officer, Ambala, for taking further proceedings. The Assistant Excise and Taxation Officer returned the case to the Assessing Authority to pass a specific order as to whether the appellant was a dhaba or a hotel or a restaurant. On that reference, the Assessing Authority passed the order that the appellant was a restaurant and not a dhaba and should be assessed as such. Thereafter, the Assistant Excise and Taxation Officer, acting as the Assessing Authority, issued a fresh notice on December 4, 1968, in form S.T. 14 to the appellant, describing it as M/s. Deluxe Hotel and Restaurant, in similar terms as the earlier one issued on April 4, 1968. The date fixing for hearing was December 16, 1968. On that date, five statements of Madan Lal were recorded and the order of assessment was passed holding that the appellant was a restaurant and not a dhaba, and, therefore, not entitled to any exemption under entry 72 in Schedule B to the Act. This order related to the assessment year 1966-67. The gross turnover was determined as Rs. 75,000 and after allowing deductions of Rs. 1,000 under section 5(2)(a)(i) in respect of the sale of eggs and Rs. 4,188.67 under section 5(2)(b), the next taxable turnover was determined as Rs. 69,811.33, on which the tax was assessed at the rate of 6 per cent amounting to Rs. 4,188.68. A penalty of Rs. 1,000 was imposed under section 11(6) of the Act. Two appeals were filed by the appellant, one against the order of the Assessing Authority, dated October 30, 1968, and the other against the order, dated December 16, 1968, which were decided by the Deputy Excise and Taxation Commissioner (Appeals), Ambala, on September 29, 1969. The amount of daily sales estimated by the Assessing Authority at Rs. 300 was reduced to Rs. 200 and the date of liability to pay tax was determined as from August 10, 1966. The establishment of the appellant was held to be a restaurant and not a dhaba. The taxable turnover was thus reduced to Rs. 43,000 on which tax at the rate of 6 per cent, after allowing deduction under section 5(2)(b), was determined as Rs. 2,467.92. The amount of penalty was reduced from Rs. 1,000 to Rs. 500. Against the orders of the Deputy Excise and Taxation Commissioner, dated September 29, 1969, two appeals were filed before the Sales Tax Tribunal, Haryana, which were dismissed on April 22, 1970. The appellant then filed C.W. 2620 of 1970, challenging the various orders mentioned above. That writ petition was dismissed by the learned Single Judge on November 10, 1971, and the present appeal under clause 10 of the Letters Patent has been filed against that judgment.

(3.) The learned counsel for the appellant has argued that even on the facts found by the Sales Tax authorities the appellant cannot be classed as a restaurant. The Assessing Authority in his order, dated October 30, 1968, referred to the various food preparations sold by the appellant daily. These included meat and meat with curry, chicken, gurda kapura, kaleji and the following vegetables :-