TMI Blog2008 (2) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained a restaurant in the premises of Hotel Kandhari International, Vijayawada, which is equipped with machines, which condition temperature. As per the Expenditure Tax Act, 1987 (ET Act), which was in force at the relevant point of time, the assessee who is maintaining air conditioned restaurant has to collect tax so as to pay to the Government under the ET Act, on the food and beverages served in the restaurant. Though the assessee maintained air conditioned restaurant, it did not file returns under the ET Act and thus the AO initiated proceedings against the assessee company in response to which it was submitted that the hotel is not equipped with air-conditioners and it is merely equipped with machines producing air-cooling effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. 5. Aggrieved, Revenue is in appeal before us. Learned Departmental Representative strongly supported the order of the AO and filed written submissions. The case of the learned Departmental Representative is that in a tropical country like India, equipment is needed only to cool the air and, so long as it controls the temperature, it would fall within the description of the term 'air-conditioning' and there is no need to have warmers so as to quality for being considered as air conditioners. The term "air-conditioner" is understood as that by which temperatures are made pleasant as compared to the atmosphere prevailing outside the premises. In fact, all the air-conditioners in the entire Coastal Andhra are merely meant to reduce t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rature. However, the equipment installed in the restaurants were not capable of warming the air and thus such equipment cannot be treated as air-conditioners. He has also taken us through the intention of the legislature from the Budget Speech of late Prime Minister, Mr. Rajiv Gandhi, to contend that the tax was originally intended to be collected from those persons who can afford to patronise high class hotels since they can also afford the further pleasure of contributing to the national exchequer. When it was initially sought to be introduced, there was no meaningful debate in the Parliament for lack of time and thereafter, Mr. Manmohan Singh has extended the levy of tax on expenditure incurred in "air-conditioned restaurants" clearly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g", which is an apparatus regulating temperature and humidity of air. Notwithstanding the claim that the four machines used in the restaurant are not air-conditioners, it was contended that even the food and drinks supplied in the other restaurants run by the assessee company were also added to it by the AO while calculating expenditure-tax and even with regard to the turnover of the restaurant fitted with air-coolers, the AO has taken into consideration other taxes such as sales-tax as part of the turnover and levied expenditure-tax; expenditure-tax is not intended to be levied on other taxes. 7. We have carefully considered the rival submissions and perused the record. In our opinion, the assessee is liable to pay entertainment (sic.-ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir-conditioners'. In other words, by applying common parlance test, the equipment which is meant to regulate the temperature without the aid of water is known as "air-conditioner" though it does not generate heat. Hence, one has to assume that the legislature has used the popular conception of the term 'air-conditioner' without going by the higher/hyper technical meaning of the term 'air-conditioner'. 8. Under the circumstances, the equipment used by the assessee in its restaurant has to be understood as air-conditioner in which event the turnover therefrom is exigible to tax under the ET Act. The plea of the learned counsel that the legislation was short-lived which indicates a hasty and unwarranted approach of the legislators in bringin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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