LexM/S. K. DAMODARASAMY NAIDU AND BROS. ETC. ETC. versus THE STATE OF TAMIL NADU AND ANR. ETC. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
MIS. K. DAMODARASAMY NAIDU AND BROS. ETC. ETC.
A
v.
THE STATE OF TAMIL NADU AND ANR. ETC. ETC.
OCTOBER 12, 1999
(S.P. BHARUCHA, B.N. KIRPAL, V.N. KHARE, D.P.
B
MOHAPATRA AND N. SANTOSH,HEGDE, JJ.]
Constitution of India/Constitution (Forty-Sixth Amendment) Act, 1982:
Anicle 366 Clause (29A)-Supply of food and drinks by Hotels and C
Restaurants-Sales Tax-Levy of-Held, States entitled to Levy Tax on the
supply of food and drink-No necessity to split the food charges from service
charges for levy of tax-Tamil Nadu General Sales Tax Act, 1959---Bombay
Sales Tax Act, 1959---U.P. Sales Tax Act, 1948.
Anide 366 Clause (29A)/S.6-Supply of food and drinks-Sales D
Tax-Levy of-No enabling provision in State enactments in State of
Maharashtra and in S(ate of Uttar Pradesh prior to 2.2.1983-Effect of-Held,
Parliament while amending Article 366 cannot and does not amend the State
laws-State legislature alone could amend or modify the State laws relating
to levy of tax-Thus, the levy of Sales tax on supply of food and drinks prior
to 2.2.1983 in State of Maharashtra and in State of Uttar Pradesh is bad in
E
law-Bombay Sales Tax Act, 1959--S.2(28) (b)-U.P. ·Sales Tax Act,
1948-S.2(h)(vi).
Sales Tax:
Tamil Nadu General Sales Tax Act, 1959--Ss.2(g) 2(n), JD, 3B and
3A-Restaurants-Supply of food and drinks-Sales Tax-Levy of-Held,
·exigible to tax once the definition of "Sale" was amended to include supply of
food and drinks--lt cannot be infe"ed that there was no intention to tax until
S.3D was introduced in 1977.
Bombay Sales Tax Act, 1959 :
F
G
Supply of Food and Drinks-Sales Tax-Levy of-Residential Hotels
providing lodging and boarding for a composite sum-No mies setting out
formulae for determining the component exigible to tax framed---Effect
of-Held, it would amount to arbitrariness in assessment by Sales Tax H
597
-
598
SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R.
A officials-Directions issued to the State Govemment not to make assessment
till necessary mies were framed.
Article 366 of the Constitution was amended by Constitution (Forty
Sixth Amendment) Act, 1982 by inserting clause (29A) and States were
B
permitted to levy tax on supply of food and drinks. Consequently, the
definition of 'sale' in Sales Tax Act of different States were amended to
include the sale of food and drinks and tax was levied thereon. Hence the
present appeals and writ petitions.
On behalf of restaurant owners in the State of Tamil Nadu it was
c contended that the State Legislature had evinced r.o intention to tax the
-
supply of food and drink until Section 30 was introduced in the Tamil
Nadu State Sales Tax Act, 1959 in 1997 and mere amendment of the
definition section in the Act was not enough to entitle the State to levy the
tax prior to 1997; that in the eye of the law, the tax on food served in
D restaurant could not be levied on the sum total of the price charged to the
customer and the bill that the customer paid in the restaurant had,
therefore, to be split up between what was charged for such service and
'•
what was charged for the food.
E
On behalf of residential hotel owners in the State of Maharashtra it
--
was contended that residential hotels provided only lodging or lodging and
boarding and 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 tax. Thus, tax could
F
not be levied on the composite charge for boarding and lodging unless the
State made Rules which set down formulae for determining that com-
ponent of the composite charge which was exigible to the tax on food and
drinks; that the definition of 'sale' in Bombay Sales Tax Act, 1959 was
amended by introducing Clause (b) (iii) which entitled levy of tax on supply
of food and drinks made or given on or after 2.2.1983 and therefore no tax
G could be levied on supply of food and drinks prior to 2.2.1983.
On behalf of 'halwai' in State of Uttar Pradesh, it was contended that
the definition of 'sale' in U.P. Sales Tax Act 1948 was amended on 2.2.1983
.L'
and therefore tax on the supply of food and drinks C{Juld not be levied for
H the period prior to 2.2.1983.
...
......
,
K. DAMODARASAMY NAIDU v. STATE
599
On behalf of State of Maharashtra and Uttar Pradesh it was con-
A
_ tended that S.6 of the Constitution (Forty-Sixth Amendment) Act, 1982
validated the Sales Tax Laws ofExcerpt shown. Read the full judgment & AI analysis in Lexace.