ASSISTANT COMMERCIAL TAXES OFFICER Vs. MANSAROWAR COLD DRINKS

JUDGEMENT

(1.) THE Assistant Commercial Taxes Officer, Ward-I, Circle C, Jodhpur (A. C. T. O.) has filed this revision under section 15 (2) of the Rajasthan Sales Tax Act (No. 29 of 1954) (for short "the Act") read with section 13 (6) of the Rajasthan Sales Tax (Amendment) Act, 1984 (No. 20 of 1984) (hereinafter referred to as "the Amendment Act") against the order dated 30th October, 1984, of the Board of Revenue for Rajasthan, Ajmer ("the Board" herein), allowing the revision filed under section 14 (2) of the Act in part holding that the tax amount of Rs. 7,673. 58 levied at the rate of 8 per cent on the turnover of Rs. 95,919. 85 was not tenable and that it was set aside. THE dealer-assessee, at the relevant time was dealing in cold drinks, fruit juice, ice-cream, etc. , and supplied them in its restaurant. THE period involved is 1st January, 1977 to 31st December, 1978. He was assessed by the assessing authority by its order dated 14th January, 1982. THE assessing authority levied tax on Rs. 95,919. 85 at the rate of 8 per cent being the taxable turnover of sales of fruit juice. Besides this, he also levied tax on the taxable turnover of Rs. 40,207 at the rate of 5 per cent on the sale of ice-cream. Being dissatisfied with the levy of tax at 8 per cent on the turnover of Rs. 95,919. 85, the assessee lodged an appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur, which was dismissed by order dated 7th October, 1982. A revision was filed by the assessee-respondent. In that revision, it prayed that in addition to the tax of Rs. 7,673. 58 levied on the turnover of Rs. 95,919. 85, relief in respect of the tax levied of Rs. 2,010. 35 on the turnover of Rs. 40,207 may also be granted. In revision, the additional relief was declined on the ground that it was not claimed in the appeal before the Deputy Commissioner (Appeals), Commercial Taxes, Jodhpur. THE Board, after taking into consideration the arguments that were raised on behalf of the assessee-respondent, and N. I. Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 (SC), held that the assessee-respondent is a restaurant serving drinks, ice-cream, etc. , in its premises and the customers do not carry away the drinks, ice-cream, etc. , served there and as such it cannot be said that there were sales in favour of the customers. THE Board, therefore, by its order dated 30th October, 1984, allowed the revision in part and set aside the amount of tax of Rs. 7,673. 58 levied at the rate of 8 per cent on the turnover of Rs. 95,919. 85. Against that, the revision has then filed as aforesaid.

(2.) THE petitioner, in the revision, as required by section 15 (3) of the Act as substituted by the Amendment Act, has stated that the following question of law is involved in the revision : " Whether, in the facts and circumstances of the case, the Board of Revenue was right in holding that turnover of Rs. 95,919. 85 was exempt from tax ?"

(3.) IN State of Himachal Pradesh v. Associated Hotels of INdia [1972] 29 STC 474, the Supreme Court had considered the case where hotels serve meals to guests who stay in the hotel. It was contended that such a transaction did not amount to a sale within the meaning of the Punjab General Sales Tax Act. IN that case, the Supreme Court held that the transaction essentially is one of service by the hotelier in the performance of which meals are served as part of and incidental to that service, and the bill prepared by the hotelier is one and indivisible not being capable by approximation of being split of into one for residence and the other for meals. After considering State of Himachal Pradesh's case [1972] 29 STC 474 (SC) and Northern INdia Caterers (INdia)'s case [1978] 42 STC 386 (SC), the learned Judges of the Andhra Pradesh High Court in Durga Bhavan v. Deputy Commercial Tax Officer [1981] 47 STC 104 summarised the effect of the aforesaid decisions, as under : " 1. If there is no right to carry away the food there would be no sale in favour of the customer. 2. Even if there is a right to carry away if in essence the transaction is a transaction of service and not a transaction of sale it would not be exigible to tax. 3. If, however, where the customer has a right to take away the good if the dominant object is the sale of food and the rendering of service is merely incidental, then the transaction would be a transaction of sale and not a service contract. 4. The question whether the dominant object was the sale of food or rendering of service would depend upon the facts and circumstances of each case which has to be decided by the assessing authority in the light of the evidence before it. "