1987 (3) TMI 483 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of a notification under the Rajasthan Sales Tax Act regarding taxation of meals sold as a composite unit in a "thal."

The judgment by the Rajasthan High Court involved a revision by the department under the newly substituted section 15 of the Rajasthan Sales Tax Act, focusing on whether a "thal" containing an entire meal sold by the assessee as a composite unit falls within the scope of a specific notification dated 8th March, 1969. The primary question was whether the individual items constituting the meal needed to be separated for determining the tax liability of each item separately. The petitioner sold meals in "thals" for Rs. 1.80 per meal during the assessment periods of 1968-69 and 1969-70. The assessing authority concluded that the supply of meals in "thals" fell within the notification and should be taxed accordingly. The assessee appealed against this decision, which was dismissed by the appellate authority, leading to a revision before the Tribunal.

The Tribunal considered the meal served in a "thal" by the assessee, which included rice, dal, chapati, vegetable curry, pepper, and onions, charged at Rs. 1.80 per "thal." Since some of these items were individually exempt from tax, the Tribunal held that these exempt items had to be excluded while assessing the tax on the meals. Consequently, the Tribunal remanded the case to the assessing authority for a fresh assessment based on this consideration. Subsequently, a reference was made to the High Court to decide on the legal question raised by the department regarding the taxation of meals sold in "thals" under the notification dated 8th March, 1969.

The High Court analyzed the notification issued by the State Government under the Rajasthan Sales Tax Act, specifically focusing on the inclusion of "meals" in the list of taxable items for certain businesses. The Court interpreted that a "thal" of the kind supplied by the assessee containing a full meal fell within the scope of the notification. The Court emphasized that a meal typically comprises composite preparations consumed at a regular eating time, and the word "meals" in the notification should be understood in its ordinary sense. Referring to relevant case law, the Court concluded that the meal served in a "thal" by the assessee should be treated collectively as a meal under the notification, rather than taxing individual constituents separately.

In light of the above analysis, the High Court held that while the Tribunal was correct in recognizing the supply of items in a "thal" as a meal, it erred in suggesting that the constituents should be taxed individually. Therefore, the revision by the department was allowed, and the Tribunal's decision was set aside. The Court acknowledged the assistance provided by amicus curiae Mr. R.C. Ghiya before concluding the judgment without any order as to costs.