JUDGMENT

R. S. PATHAK, J.:— This and connected appeal are directed against the judgment of the High Court of Delhi disposing of a reference made to it under S. 21 (3) of the Bengal Finance (Sales Tax), Act, 1941 as extended to the Union Territory of Delhi on the following question:-

"Whether the service of meals to casual visitors in the Restaurant is taxable as a sale

(i) when the charges are lump sum per meal or

(ii) when they are calculated per dish? The High Court has answered the question in the affirmative.

2. The appellant runs a hotel in which lodging and meals are provided on "inclusive terms" to residents. Meals are served to non-residents also in the restaurant located in the hotel. In the assessment proceedings for the assessment years 1957-58 and 1958-59 under the Bengal Finance (Sales Tax) Act, 1941, the appellant contended that the service of meals to residents and non-residents could not be regarded as a sale and therefore sales tax could not be levied in respect thereof. The contention was rejected by the sales tax authorities, who treated a portion of the receipts from the residents and non-respondents as representing the price of the foodstuffs served. At the instance of the appellant, the High Court called for a statement of the case on two questions. One was whether the supply of meals to residents, who paid a single all-inclusive charge for all services in the hotel, including board, was exigible to sales tax. The second was the question set forth above. The High Court answered the first question in favour of the appellant and the second against it. And now these appeals by special leave.

3. Tax is payable by a dealer under S. 4 of the Bengal Finance (Sales Tax) Act, 1941 on sales effected by him, and the expression "sale" has been defined by S. 2 (g) of the Act to mean "any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract .. ... ..." The question is whether in the case of non-residents the service of meals by the appellant in the restaurant constitutes a sale of foodstuffs. It appears to us that after the view taken by this Court in State of Himachal Pradesh v. M/s. Associated Hotels of India Ltd., (1972) 2 SCR 937 the approach to the question before us is clearly indicated.

4. This is a case where the origin and historical development of an institution has profoundly influenced the nature and incidents it possesses in law. In the case of an hotelier this Court proceeded on the footing that his position in law was assimilable to that of an innkeeper. At common law an innkeeper was a person who received travellers and provided lodging and necessaries for them and their attendants and employed servants for this purpose and for the protection of travellers lodging in his inn and of their goods.* It was hospitality that he offered, and the many facilities that constituted the components of that hospitality determined the legal character of the transactions flowing from them. Long ago, in Crisp v. Pratt, 1639 Cro Car 549 it was pointed out that innkeepers do not get their living by bying and selling, and that although they buy provisions to be spent in their house, they do not sell them but what they do is to "utter" them. "Their gain", it was added, "is not only by uttering of their commodities, but for the attendance of their servants, and for the furniture of their house, rooms, and lodgings, for their guests ... ... ... .... ... ..". This test went to the root, and we find it repeated in Parker v. Flint, (1699) 12 Mod 254. In Newton v. Trigg, (1691) 3 Mod 327, Holt. C. J. defined the true status of an innkeeper by reference to the services afforded by him, that he was an "hospitator", and was "not paid upon the account of the intrinsic value of his provisions, but for other reasons: the recompense he receives is for care and pains, and for protection and security . .. ... ... but the end o