TMI Blog2003 (3) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... e employer under a statutory obligation without profit-motive, provided that the employer subsidises at least twenty-five per cent of the total expenses incurred in running the canteen. 3.. The notification of 25th March, 1989 granted exemption "in respect of the tax payable on the sale of food and drinks other than those falling under the First Schedule to the said Act, by any hotels, restaurants, sweet stalls or any other eating houses whose total turnover does not exceed Rs. 10 lakhs per annum". It may be noticed here that this notification of March 25, 1989 was amended on May 30, 1990 enhancing the limit to Rs. 15 lakhs and by a subsequent notification dated September 5, 1990 those two notifications were cancelled and a fresh notification was issued which granted exemption on similar terms with an increased limit on the turnover at Rs. 18,25,000 and making the enhanced limit applicable retrospectively from April 1, 1990. The petitioner claims exemption under both the notifications. Some of the canteens run by the petitioner were for employers who were under a statutory obligation to provide canteens for the benefit of their employees, while the other employers, for whom the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed food and which canteens, from the point of view of those employers, were not run with any profitmotive, as those employers provided subsidy for the food provided to their employees in those canteens. 8.. Counsel in this context referred us to several decisions of the apex Court and of this Court. Attention was invited to the decision of the apex Court in the case of Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U.P., Lucknow [1998] 111 STC 425; (1998) 7 JT SC 9 as also to the decision of the apex Court in the case of Tata Oil Mills Co. Ltd. v. Collector of Central Excise reported in [1991] 82 STC 225, wherein it was held that the exemption notifications must be construed having regard to the object sought to be achieved by those notifications and should be so construed as to effectuate such object and purpose. It was also held in the later decision that while literal construction was required to be adopted such construction had to be reasonable. 9.. Attention was also invited to the decision of the apex Court in the case of Indian Farmers Fertiliser Co-op. Ltd. v. Collector of Central Excise, Ahmedabad (1996) 86 ELT 177 (SC) wherein it was held that words not found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's observations that the fairest and most rational method to interpret the will of the law-maker is by exploring his intentions at the time when the law was made, by signs the most natural and probable and these signs are consequences, or the spirit and reason of the law. It was held therein that the notifications having been issued in accordance with the powers conferred, it has statutory force and validity as if it was contained in the enactment itself. He invited our attention also to the decision in the case of Rajasthan Spinning and Weaving Mills Ltd. v. Collector of Central Excise, Jaipur, Rajasthan [1996] 102 STC 476 (SC) wherein it was held, inter alia, that, no extended meaning can be given to the exempted item to enlarge the scope of the exemption. 13.. We may now examine the first of the two notifications on which the petitioner rely. Under the first of these notifications relied upon by the petitioner which is dated 1st September, 1964, the exemption granted is for the sales by all canteens run "by an employer or by the employees on co-operative basis on behalf of the employer". The further requirement to be satisfied before the benefit of that notification can be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who shall run the canteen. All that it requires is that the employer should provide an adequate canteen according to the standards prescribed in the Rules. The running of such canteen can be by the employer himself by directly engaging the workmen, or by engaging an independent contractor to run it or by permitting the employees to run it on a co-operative basis or such other basis that the employer and employee may agree upon. 17.. The notification issued by the State under the provisions of the Sales Tax Act has provided the exemption only for the sales effected in canteens "run" by an employer or is run by the employees on a co-operative basis on behalf of the employer. These are the only two situations in which the benefit of the exemption can be claimed. The running of the canteen by an independent contractor, even though can be regarded as running of the canteen on behalf of the employer, would not meet the requirements of this notification as the running of the canteen on behalf of the employer would be relevant for the purposes of this notification, only if such running of the canteen is by the employees on a co-operative basis. The two situations contemplated under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exemption granted under this notification is in respect of the tax payable on the food and drinks sold in the hotels, restaurants, sweet stalls or other eating houses. The notification does not use the word "dealer" anywhere. However, it does refer to total turnover for the purpose of determining the liability of the dealer for claiming the benefit of this notification. Total turnover has not been defined in the notification but its definition is to be found in section 2(q) of the Tamil Nadu General Sales Tax Act. That definition reads thus: "2(q) 'total turnover' means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax;" 22.. Though the notification uses the words "by any hotel" the reference to the total turnover would clearly indicate that the turnover referred to therein is the turnover of a dealer and that the total turnover is the aggregate turnover of all goods of such dealer "at all places of business in the State". The limit of Rs. 18,25,000 specified in that notification for the total turnover is therefore the limit on the amount of the total turnover of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are liable to pay tax on the sales of food and drinks in hotels, restaurants, sweet stalls and other eating houses, whose total turnover does not exceed Rs. 18,25,000. The word "whose" in the context in which it is used in the notification, qualifies the person who is liable to pay the tax and does not qualify the actual turnover in a specified location where the hotel, restaurant, sweet stall or eating house is run. The notification could have been more happily worded. However, it is to be construed in the way it is now before us and the construction which we have placed on it is one which is a reasonable and fulfils the purpose for which that notification was issued. 26.. The purpose for which the notification was issued evidently was to exempt the relatively small dealers-small in the sense all these dealers whose total turnover is less than the sum specified, and where the articles dealt with by those dealers were food and drinks, and the sales of such food and drinks were effected at the places specified in the notification. That object is ill served if the turnover is determined with reference to each different location and the benefit extended to a dealer who runs such bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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