TMI Blog2022 (6) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... been charged from the customers for distributing the same on the staff who rendered their services in the banquet and not to any other staff of hotel / restaurants and therefore it was not form part of taxable turn over as defined under the Act. In the case in hand, the provisions of UP Trade Tax Act is absolutely clear. The amount charged by the revisionist in whatever name called i.e. services rendered by their employee to the banquet as alleged, cannot be excluded from the taxable turnover. Revision dismissed. - SALES/TRADE TAX REVISION NO. 493 OF 2008 - - - Dated:- 5-1-2022 - Hon'ble Piyush Agrawal, J. Counsel for Revisionist :- Kalpana Sinha,Raghav Nayar Counsel for Opposite Party :- C.S.C. ORDER Hon'ble Piyush Agrawal, J. 1. Heard Sri Navin Sinha, Senior Advocate assisted by Sri Raghav Nayar for the revisionist and Sri B.K. Pandey, learned Standing Counsel for opposite party. 2. The present revision has been filed against the order dated 4.4.2005 passed by Trade Tax Tribunal, Agra in Second Appeal No. 313 of 2004 (Assessment Year 2001-02). The following question of law have been referred for answer in the present revision:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om their customers). 6. Learned counsel for the revisionist has relied upon the judgement of Bombay High Court in case of Sun n Sand Hotel Private Limited Vs. State of Maharastra 1969 23 STC 507 , in which held as under: 10. We are unable to accept the contention of the petitioner thatwhat is charged to the customer in the hotel by the assessee inclusive of 10 per cent by way of service charges is really not the sale price for the goods which are offered and consumed by the customer in the establishment. Once it is found that there is no option to the customer whether to pay or not to pay the service charges at the rate of 10 per cent over and above the tariff, we find it difficult to dissociate this part of the bill from the total contract which a customer enters into with the assessee when ordering any food. A specimen of the tariff card, which is presented to the customer as soon as he enters the hotel and which in effect is the agreement between the customer and the assessee, shows that in all cases service charges of 10 per cent on the tariff pins sales tax at 5 paise per rupee are to be paid by the customer. It is, therefore, contended on behalf of the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately charged for. It may be that the same kind of food served outside, say on the footpath, may be charged much less than when it is ordered and served in a posh establishment like the one which the assessee amenities. But all the same, it is the price of food that the customer has to pay for the luxury or the benefit of having delivered the articles of food in a nice place, in comfort and to the delightful accompaniment of music or such other entertainment. We fail to see, therefore, what difference does it make so far as the customer is concerned, whether the addition to his bill is named as service charges or simply as 10 per cent addition to the tariff. As it is not possible or permissible to separate the two charges as charges merely for the services and when mere services are not available for payment, the Tribunal seems to be right in coming to the conclusion that service charges are inseparably mixed up with the total amount or price that is charged to the customer for the food that is supplied to him. 7. He further relied upon the judgement of Delhi High Court in S.T. No. 1 of 2010 (Commissioner VAT Vs. India International Centre) decided on 19.11.2010, rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proposition of law that whatever is charged from the customers becomes the sale price and therefore, the dealer is liable to pay sales tax thereon is unquestionable but at the same time it cannot be treated as absolute principle of law, which is to be applied in all circumstances, irrespective of the nature of the charge. In the present case, the first thing that needs to be highlighted is that the centre provides services to its members only. No doubt, these members can bring their guests occasionally, which is also subject to some limitations as provided in the rules and regulations. Secondly, the nature of amount charged under the bill is required to be seen in the aforesaid scenario. To give an example, suppose for a renovation of its coffee house/restaurant or any other part of the building, etc., the decision is taken by the management (which of course is comprised of its members itself) to charge and collect a sum of ₹ 50 from each member every time he/she utilizes the services in the restaurant or in the coffee house. Such an amount if calculated in the bill can never be termed as sale price because the amount, so charged, partakes the character of donation . It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant that there is clear distinction between services‟ and service charges‟. We find that the Hon‟ble Supreme Court of India in the case of K. Damodarswamy had held that supply of food etc. in a hotel or restaurant are services‟ and the levy of tax on composite charges of boarding and lodging being services price of food and services could not be ascertained and split. Up. But in the case in hand, tax on service charges‟ charged separately in the cash memos over and above the price of food and snacks makes the case different in any manner. Further as regards the Judgments in the cases reported as 73 STC 317, 139 STC 434, 65 STC 48 relied upon by Respondent are concerned we are of the view that these are different as they deal with the transportation and delivery charges, and as such are distinguishable and consequently do not in any manner advance the case of the revenue. So far the applicability of the Sun-N-Sand and Hotel Ashoka Judgments relied upon by the Respondent are concerned we are informed by Shri Balram Sangal during the course of arguments and not refuted by the Respondent as well that to it is only the members of the society or their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso the lot cooly charges arenot paid to any particular person who renders the services but the amounts collected are intended to be paid to all the employees of the assessees doing similar services. But we find the principle laid down in that case to be that the service charges have a direct nexus and are relatable to the food or refreshments taken by the customer. But, in the case on hand, the service charges do not exclusively relate to the goods supplied to the customers. The nature of the lot cooly charges has been adverted to in Srinivasa Timber Depot v. Deputy Commercial Tax Officer [1969] 23 S.T.C. 158. The usual practice is said to be that the customers who come to the depot for the purchase of specific varieties of timber of particular measurements take meticulous care in selecting the cut timber for the specified purposes and this would involve some labour such as lifting of logs of timber, showing them to the purchasers, cutting them to sizes on purchasers' approval of the quality of the timber and so on and that the trade practice is to collect certain charges as lot cooly charges if ultimately the purchaser selects the articles and purchases them. In the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as an incident of sale, and that the rule is not intended to exclude from the taxable turnover any component of the price, such as the expenditure which the dealer has to incur before sale to make the goods available to the intending customer at the place of sale. Relying on this decision, the learned Government Pleader urges that lot cooly charges represent the cost of pre-sale services which the assessees have to incur for making the required goods available to the customers. But the Supreme Court was considering Rule 9(f) of the Kerala General Sales Tax Rules, 1963, providing for deduction in respect of the amounts paid as freight in relation to the goods sold and, naturally, it was held that the freight in respect of which deduction was claimed should be the freight incurred subsequent to the sale in relation to the goods sold. But we are concerned in this case with certain charges paid by the customer for the services rendered by lot men in assisting them to select the required specified goods they want out of the total stock or lot held by the assessees. Therefore, we are inclined to agree, with respect, with the view expressed in Srinivasa Timber Depot v. Deputy Commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding good furniture, furnishing and fixtures, linen, crockery and cutlery, music, a dance floor and a floor show, is what is the subject of the levy. The patron of a fancy restaurant who orders a plate of cheese sandwiches whose price is shown to be Rs. 50 on the bill of fare knows very well that the innate cost of the bread, butter, mustard and cheese in the plate is very much less, but he orders it all the same. He pays Rs. 50 for its supply and it is on Rs. 50 that the restaurant owner must be taxed. 11. Learned counsel for the owners of residential hotels in the State of Maharashtra (Writ petition No. 9901 of 1983) raised much the same contention, but in the context of residential hotels. He pointed out that residential hotel provided only lodging or lodging and boarding. The boarding could comprise full board, i.e., breakfast, lunch and dinner or breakfast and one meal or breakfast alone. In Mr. Salve's submission, the composite charge that the hotel owner levied for lodging and such boarding had to be split up and only the element thereof that related to the supply of meals could be subjected to the tax. The tax could not be levied on the composite charge for boardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his account or on account of others, whether for cash or deferred payment or other valuable consideration. Explanation II Subject to such conditions and restrictions, if any, as may be prescribed in this behalf:- (i) the amount for which goods are sold or purchased shall include the price of the packing material in which they are packed, and any sums charged for anything done by the dealer in respect of the goods sold, at the time of or before the delivery thereof, other than, cost of freight or delivery or cost of installation or the amount realized as trade tax on sale or purchase of goods, when such cost or amount is separately charged; (ii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; and (iii) where for accommodating a particular customer, a dealer obtains goods from another dealer and immediately disposes of the same without profit to the customer, the sales in respect of such goods shall be included in the turnover of the latter dealer alone; (ii) Turnover of Purchases with its cognate expressions means the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the revisionist is of no help as definition of sale under Section 2 (h) of the Act is very clear specifically provides any supply or part of any service or in any other manner for sale of goods / supply /service is for cash or deferred payment or other valuable consideration forms part of sale and liable to be included in taxable turnover. 20. Hon ble Apex Court in the Case of Ashirwad Ispat Udyog and others Vs. State Level Committee and others, 1999 U.P.T.C. 93 has held as under: 8. Decisions construing the meaning of the word manufacture as used in other statutes do not apply unless the definition of that word in the particular statute under consideration is similar to that construed in the decisions. The plain construction of the special definition of the word in a particular Act must prevail. 21. In the case in hand, the provisions of UP Trade Tax Act is absolutely clear. The amount charged by the revisionist in whatever name called i.e. services rendered by their employee to the banquet as alleged, cannot be excluded from the taxable turnover. 22. In view of above facts as well as the aforesaid law laid down by Hon ble the Apex Court, the revision fails ..... X X X X Extracts X X X X X X X X Extracts X X X X
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