State of Tamil Nadu vs Dalishowe Ice Cream Parlour

Thanikkachalam, J.—State is the petitioner. The respondent-assessee was originally assessed to sales tax on a total and taxable turnover of

Rs. 50,100.80 for 1980-81 u/s 7 of the Tamil Nadu General Sales Tax Act, 1959. On Appeal, the Appeal, Assistant Commissioner

(Commissioner Taxes) remanded the matter back to the file of the assessing officer with a direction to redo the assessment in accordance with the

decision of the Supreme Court in the case of Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi 1980 45 STC 212. In the reassessment

proceedings the assessing officer found that since there was an element of service in selling ice cream, the sale turnover will not come for tax u/s 7

of the Tamil Nadu General Sales Tax Act. Accordingly, no tax was levied. The Deputy Commissioner by invoking his revisional jurisdiction u/s 32

of the Act, after hearing counsel for the assessee, came to the conclusion that there was sale in selling the ice cream by the assessee. Accordingly,

he directed the assessing officer to levy tax on the turnover of Rs. 50,100. Aggrieved, the assessee filed an appeal before the Appellate Tribunal.

The Tribunal considering the facts came to the conclusion that there is service element involved in the sale of ice cream by the assessee and

therefore, the Deputy Commissioner was wrong in exercising his jurisdiction u/s 32 of the Act in revising the assessment. Accordingly, the appeal

was allowed. Aggrieved, the department is in revision before this Court.

According to the learned Additional Government Pleader (Taxes) what was sold by the assessee was packed ice cream and when once the sale

is across the counter, the assessee is liable to pay the sales tax on the turnover. On the other hand, learned counsel appearing for the assessee,

while supporting the order passed by the Tribunal relied upon the decision reported in [1978] 42 STC 386 [Northern India Caterers (India) Ltd.

case] and contended that the Tribunal was correct in setting aside the order passed nh the Deputy Commissioner u/s 32 of the Act.

The fact remains that the assessee is having an ice cream parlour and selling ice cream in glass cups and the customers used to consume the ice

cream there itself and they are not carrying the ice cream away from the ice cream parlour. Since the ice cream is supplied in the glass cups the

customers are bound to return the cups after consuming the ice cream. This fact was ascertained by the assessing officer himself on his personal

visit. Since there is service element is involved in the present case, the sale turnover is not taxable as per the decision reported in Northern India

Caterers (India) Ltd. Vs. Lt. Governor of Delhi, and Northern India Caterers (India) Ltd. Vs. Lt. Governor of Delhi, . Accordingly, we see no

infirmity in the order passed by the Tribunal in setting aside the revisional order passed by the Deputy Commissioner u/s 32 of the Act. In the

result, the revision is dismissed. No costs.

Petition dismissed.