JUDGMENT

S.P. Bharucha, J.

(1) THE issues in these appeals and writ petitions relate to the entitlement of the State to levy tax on the sale of food and drink. Entry 54 of List-II of the Seventh Schedule to the Constitution empowers the State to levy "taxes on the sale or purchase of goods other than newspapers subject to the provisions of entry 92A of List-I." (Entry 92A of List-I deals with taxes on the sale or purchase of goods in the course of interstate trade or commerce and does not concern us here).

(2) IN the decision in State of Punjab v. M/s Associated Hotels of India Ltd., 1972(2 SCR 937, this court considered the plea of Associated Hotels of India Ltd., which ran the Cecil Hotel in Shimla, that it was not liable to pay sales tax in respect of meals served to guests who came there to say. Posing the questions, what was the nature of the transaction and the intention of the parties when a hotelier received a guest in his hotel and was there in that transaction an intention to sell him the food contained in the means served to him during his stay, this court held that the transaction was essentially one and indivisible, namely, to receive custom