2023 (6) TMI 842 - RAJASTHAN HIGH COURT

Calculation of VAT - expenses charged are separate than the food charges despite only one coupon of composite amount issued at the entry by the respondent or not - penalty imposed under Section 61 of RVAT Act - HELD THAT:- The assessee cannot split up the amount charged for the sale of food, even if assessee provides certain services in addition to the food, and VAT has to be paid on the entire consideration charged for the food. The assessee, undisputedly, issued coupons that were adjustable against food only and therefore the assessee is liable to pay VAT on the entire consideration charged from its customers for supply of food.

This position of law is well settled now and explained in great detail by the Hon’ble Apex Court in the case of K. Damodarasamy Naidu and Bros. [1999 (10) TMI 598 - SUPREME COURT], holding that the price that the customer pays for the supply of food in a restaurant cannot be split up as suggested by learned Counsel.

The contention of the assessee that as per aspect theory, the dominant supply was of supply of entertainment/service is also untenable - the questions of law framed hereinabove have to be answered in favour of the revenue and against the assessee - Accordingly, the impugned order of the Tax Board is quashed and set aside and the levy of penalty is maintained.