State of Andhra Pradesh vs Ajanta Cool Drinks

Syed Shah Mohammed Quadri, J.—These two tax revision cases are filed by the State against the common order of the Tribunal in T.A. Nos. 230 of 1984 and 231 of 1984 dated January 7, 1988 relating to the assessment years 1979-80 and 1980-81 respectively. The respondent is carrying on the business of supply of cool drinks and serving ice-creams in the shop. The turnover of the respondent was assessed to sales tax. A revision was initially filed against the order of assessment and thereafter the matter was taken in appeal before the Sales Tax Appellate Tribunal. The Tribunal took the view that the respondent''s shop fell within the purview of G.O.Ms. No. 1025, Revenue (S) dated August 22, 1986 and in that view of the matter, it allowed the appeals of the respondents by order dated January 7, 1988 It is that view of the Tribunal that is assailed in these tax revision cases.

The learned Special Government Pleader for Taxes contends that the respondent''s shop in neither a hotel nor a restaurant so as to claim the benefit of G.O.Ms. No. 1025 and the Tribunal erred in allowing the appeals and exempting the turnover from the sales tax. The learned counsel for the respondent, on the other hand, submits that cool drinks and ice-creams are served in the shop and therefore the shop of the respondent falls within the meaning of "restaurant" and as sun the Tribunal has rightly extended the benefit of G.O.Ms. No. 1025.

The short question that arises for consideration is, whether cool drink house serving cool drinks, ice-creams, fruit juice and aerated water, etc., fall within the meaning of "restaurant".

There is no controversy about the fact that supply of articles of food or drink in restaurants or catering houses or hotels are liable to be taxed on the total amount charged for such supplies. The controversy here relates to, whether G.O.Ms. No. 1025 takes in its fold the cool drink house like the shop of the respondent herein. The relevant notification issued under the abovesaid G.O. reads as follows :

NOTIFICATION I

"In exercise of the powers conferred by sub-section (1) of section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act VI of 1957) the Governor of Andhra Pradesh hereby directs that all the dealers running any restaurant or eating house or hotel (by whatever name called), whose total turnover for a year was rupees two lakhs and below, at any time on or after the 7th day of September, 1978 and before 2nd February, 1983 be exempted, from payment of sales tax, on the supplies, made by way of or as part of any service or in any other manner whatsoever of goods being food or any other article for human consumption or any drink (whether or not intoxicating)."

From a perusal of the notification extracted above, it is clear that exemption has been granted in favour of the dealers running any restaurant, eating house or hotel (by whatever name called) whose total turnover for a year was rupees two lakhs and below, from payment of sales tax on the supplies made by way of or as part of any service or in any other manner whatsoever of goods being food or any other article for human consumption or any drink (whether or not intoxicating).

The intention of the Government in granting exemption is to benefit the dealers who are running small eating houses, restaurants, hotels, etc., from the charges of supplies being subjected to sales tax in view of the provisions of section 5-C of the Andhra Pradesh General Sales Tax Act, 1957. On a careful consideration of the notification issued in G.O.Ms. No. 1025 supra, we are of the view that the Tribunal is right in granting the benefit of the G.O.; firstly, because the meaning of "restaurant" as given in Oxford Concise Dictionary is - a place where meals or refreshments may be had. There can be no doubt that refreshment includes refreshment by taking food or drink. Therefore, a place, where cool drinks including fruit juice and aerated water are supplied and ice-cream us served, is within the meaning of restaurant in its extended meaning. And, secondly because from a perusal of the G.O., it appears that the intention of the Governor is to grant exemption in favour of such dealers who are running eating houses, hotels, restaurants, etc., whose total turnover per year is less than rupees two lakhs, and if that be so, a dealer running a cool drink house having turnover of less than rupees who lakhs would fall within the benefit of exemption granted by the aforesaid G.O., from payment of sales tax on the turnover. For these reasons, we are of the view that cool drink house, ice-cream parlours, etc., do fall within the benefit of exemption granted in G.O.Ms. No. 1025. In this view of the matter, we do not find any illegality in the order of the Tribunal. Both the tax revision cases are, therefore dismissed. No costs.

Petitions dismissed.