TMI Blog1984 (2) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Hindustan Steel Limited, Rourkela, is a registered dealer carrying on business in the manufacture and sale of steel and other products. In course of assessment for the year 1968-69, the assessing officer included Rs. 7,94,167.81 being the sale proceeds of the workers' canteen, Rs. 4,05,226.38 being the sale proceeds of unserviceable materials of the A.C.A. Stores, Rs. 36,778.89 being the sale proceeds of the Rourkela Guest House and Rs. 18,223.71 being the sale proceeds of horticultural products in the gross and taxable turnovers of the assessee as these sales had not been reflected in the returns submitted by the assessee. Accordingly, the assessing officer advanced additional tax demand of Rs. 56,226.31. The assessee preferred an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal inter alia held that the gross turnovers of the workers' canteen and of unserviceable materials were both exigible to tax. Thereafter, the assessee filed two reference applications under section 25(l) of the Act before the Tribunal praying for reference of the following three questions of law to this Court for its opinion: "(a) Whether in the facts and circumstances of the case sale in the workers canteen is liable to be included in the gross turnover and taxable turnovers of the applicant? (b) Whether in view of the facts and circumstances of the case the sale in A.C.A. Stores is to be included in the gross and taxable turnovers? and (c) Whether in the facts and circumstances of the case, retrospective operation of Act 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STC 474 (SC); AIR 1972 SC 1131 adopted the concept of the English law that there is no sale when food and drink are supplied to guests residing in the hotel. The Court pointed out that the supply of meals was essentially 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid judgment came to be considered by the Supreme Court in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1980] 45 STC 212 (SC); AIR 1980 SC 674. The Supreme Court dismissed the review petitions and inter alia observed: "It appears from the submissions now made that the respondent as well as other States are apprehensive that the benefit of the judgment of this Court will be invoked by restaurant-owners in those cases also where there is a sale of food and title passes to the customers. It seems to us that having regard to the facts upon which our judgment rests-undisputed as they have remained throughout the different stages of the litigation-and the considerations which they attract, no such apprehension can be reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Indeed, we have no hesitation in saying that where food is supplied in an eating-house or restaurant, and it is established upon the facts that the substance of the transaction, evidenced by its dominant object, is a sale of food and the rendering of services is merely incidental, the transaction would undoubtedly be exigible to sales tax. In every case it will be for the taxing authorities to ascertain the facts when making an assessment under the relevant sales tax law and to determine upon those facts whether a sale of the food supplied is intended.' Clearly therefore the only finding recorded in this case that the assessee runs a hotel wherein food and drinks are served to the visitors is not sufficient." 4.. In the present case, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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