DHARAMPAL MEHTA Vs. STATE OF BIHAR

JUDGEMENT

(1.) In all these applications under Article 226 of the Constitution of India the petitioners have made a prayer for issuance of an appropriate writ striking down the entry relating to imposition of sales tax on items enumerated in paragraph 1(ii) and (iii) of the State Government Notification No. S. O. 351 dated the 28th March, 1972 and the whole of the Government Notification No. 349 of the same date as being illegal and invalid and of a writ of mandamus commanding the respondents not to give effect to those notifications and the notices issued to the different petitioners in pursuance of the aforesaid notifications. Copies of the notifications aforesaid and the notices issued have been marked variously as different annexures to the 3 writ applications ; it is, however, not necessary to give the numbers of those annexures.

(2.) In a nutshell the effect of these notifications is to impose a special sales tax on cooked food, including Indian sweets, tea and coffee, when sold as beverages, dahi and lassi at the rate of 10 per cent in respect of a dealer whose annual gross turnover during the preceding financial year exceeded Rs. 1,00,000. It is worthwhile to mention here that previously by two Notifications bearing Nos. STGL-J-2042/68-12568-F. T. and STGL/68-12570-F.T. dated the 27th December, 1968, published in the Bihar Gazette dated the 28th December, 1968, these items had been exempted from the levy of either general sales tax or special sales tax by the State Government under the powers conferred on it by Section 4(3) of the Bihar Sales Tax Act, 1959 (Bihar Act 19 of 1959). The two impugned notifications have been made effective from the 1st day of April, 1972 and in pursuance thereof notices have been issud by the commercial taxes department to the petitioners to produce their account books from the 1st April, 1972, onwards. All the petitioners claim to be dealers having an annual gross turnover exceeding Rs. 1,00,000 each during the preceding financial year and thus they feel aggrieved by the notifications which have been challenged in these writ applications and the notices issued thereunder.

(3.) At the outset I must indicate that, although in the petitions the vires of the impugned notifications were challenged on numerous grounds, in the course of argument, Mr. B.C. Ghose, the learned counsel appearing for the petitioners, did not attack the validity of the impugned notifications but merely addressed us on the point that no sales tax on the items enumerated above should be charged from the petitioners. In other words, the only argument that was advanced was that the special sales tax imposed by virtue of the two notifications dated the 28th March, 1972, should not be imposed on the petitioners as those notifications were inapplicable to their cases. It was submitted on behalf of the petitioners that they were hoteliers and they also carried on restaurant business at different places in the State of Bihar and, as such, cooked food and other items which were served by them to their customers and guests were inclusive of service charges. Cooked food and service were indivisible at least in the case of those hoteliers whose annual gross turnover was over Rs. 1,00,000 inasmuch as it was contended, the supply was not of goods merely but was inclusive of charges for rendering service. And, where service is indivisible and charges therefor cannot be severed from the items sought to be subjected to tax then in that case such articles would not attract the provisions of the said two notifications. In support of his contention, Mr. Ghose relied upon a decision of the Supreme Court in the case of State of Himachal Pradesh v. Associated Hotels of India Ltd. A.I.R. 1972 S.C. 1131. But before adverting to that case and the principle of law to be applied in the instant cases, it is necessary to state the facts obtaining in these writ applications.