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1972 (1) TMI 80 - SC - VAT and Sales Tax
Whether a transaction falls within the purview of sales tax?
Whether it constitutes a contract of sale or a contract of work or service?
Held that:- Appeal dismissed. The contract between such a hotel proprietor and a traveller presenting himself to him for lodging is one which is essentially a contract of service and facilities provided at reasonable price. The transaction between a hotelier and a visitor to his hotel is thus one essentially of service in the performance of which and as part of the amenities incidental to that service, the hotelier serves meals at stated hours. The revenue, therefore, was not entitled to split up the transaction into two parts, one of service and the other of sale of food-stuffs and to split up also the bill charged by the hotelier as consisting of charges for lodging and charges for food-stuffs served to him with a view to bring the latter under the Act.