TMI Blog1978 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... Sachthey and Miss A. Subhashini, Advocates, with him), for the respondent. F.S. Nariman, Senior Advocate (in C.A. No. 1768 of 1972), V.S. Desai, Senior Advocate (in C.A. No. 1769 of 1972) and M.C. Bhandare, Senior Advocate (in C.A. No. 1768 of 1972) (Mrs. S. Bhandare and Miss M. Poduval, Advocates, with them), for the appellants. Y.S. Chitale, Senior Advocate (Vinay Bhasin, A.K. Srivatsava and Vineet Kumar, Advocates, with him), for the interveners. -------------------------------------------------- The judgment of the Division Bench of the Delhi High Court consisting of HARDAYAL HARDY and PRITHVI RAJ, JJ., in S. T. R. No. 8 of 1969 dated 15th July, 1971, runs as follows: The judgment of the Court was delivered by HARDAYAL HARDY, J. -The following two questions of law have been referred to this Court under section 21(3) of the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi: "(1) Whether the supply of meals by the petitioner to the residents, who pay a single all-inclusive charge for all services in the hotel, including board, if they desire to partake of it, without entitling them to a rebate, if they miss it, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular portion of any article of food is meant for the use of residents and which portion is meant for the outsiders. In that case, the articles of food kept in the hotel may be regarded for sale. It makes no difference in such a case for the charges being lump sum per meal or when the charges are to be calculated per dish. As the parties have been successful in part, they are left to bear their own costs. On an application for review of the abovesaid Order the Court consisting of HARDAYAL HARDY and PRITHVI RAJ, JJ., pronounced the following order on 21st September, 1971. Order This is an application for review of an order made by this Court on 15th July, 1971. There are no grounds for review of the order. The application is accordingly dismissed. The assessee appealed to the Supreme Court. F.S. Nariman, Senior Advocate (in C.A. No. 1768 of 1972), V.S. Desai, Senior Advocate (in C.A. No. 1769 of 1972) and M.C. Bhandare, Senior Advocate (in C.A. No. 1768 of 1972) (Mrs. S. Bhandare and Miss M. Poduval, Advocates, with them), for the appellants. P.A. Francis, Senior Advocate (R.N. Sachthey and Miss A. Subhashini, Advocates, with him), for the respondent. Y.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n State of Punjab v. Associated Hotels of India Ltd. [1972] 29 S.T.C. 474 (S.C.); [1972] 2 S.C.R. 937., the approach to the question before us is clearly indicated. This is a case where the origin and historical development of an institution has profoundly influenced the nature and incidents it possesses in law. In the case of an hotelier this court proceeded on the footing that his position in law was assimilable to that of an innkeeper. At common law an inn-keeper was a person who received travellers and provided lodging and necessaries for them and their attendants, and employed servants for this purpose and for the protection of travellers lodging in his inn and of their goods Halsbury's Laws of England, 3rd Edn., Vol. 21, page 442, para 932. It was hospitality that he offered, and the many facilities that constituted the components of that hospitality determined the legal character of the transactions flowing from them. Long ago, in Crisp v. Pratt (1639) Cro. Car. 549., it was pointed out that innkeepers do not get their living by buying and selling, and that although they buy provisions to be spent in their house, they do not sell them but what they do is to "utter" them. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling price." Like the hotelier, a restaurateur provides many services in addition to the supply of food. He provides furniture and furnishings, linen, crockery and cutlery, and in the eating places of today he may add music and a specially provided area for floor dancing and in some cases a floor show. The view taken by the English law found acceptance on American soil, and after some desultory dissent initially in certain States it very soon became firmly established as the general view of the law. The first edition of American Jurisprudence Vol. 46, page 207, para 13., sets forth the statement of the law in that regard, but we may go to the case itself, Electa B. Merrill v. James W. Hodson L.R.A. 1915-B481., from which the statement has been derived. Holding that the supply of food or drink to customers did not partake of the character of a sale of goods, the court commented: "The essence of it is not an agreement for the transfer of the general property of the food or drink placed at the command of the customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thirst. The customer does not become the owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally in the nature of a service provided to them and could not be identified as a transaction of sale. The court declined to accept the proposition that the revenue was entitled to split up the transaction into two parts, one of service and the other of sale of food-stuffs. If that be true in respect of hotels, a similar approach seems to be called for on principle in the case of restaurants. No reason has been shown to us for preferring any other. The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need. What has been said in Electa B. Merrill L.R.A. 1915-B 481., appears to be as much applicable to restaurants in India as it does elsewhere. It has not been proved that any different view should be taken, either at common law, in usage or under statute. It was urged for the respondent that in Associated Hotels of India Ltd. [1972] 29 S.T.C. 474 (S.C.); [1972] 2 S.C.R. 937. this Court drew a distinction between the case of meals supplied to a resident in a hotel and those served to a customer in a restaurant. We are unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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