CHENNAKESAV REDDY, AG. C. J.

( 1 ) THIS big batch of writ petitions is spawned by the Constitution (Forty-sixth Amendment) Act. 1982 (hereinafter referred to as "the Amendment Act" ). The petitioners are hoteliers or licensees of bars and restaurants. They seek a writ of mandamus to interdict the State Government from levy and collection of sales tax from them in pursuance of the provisions of section 4 (f) and 6 of the Amendment Act contending intra alia that the said provisions are ultra vires of article 368 of the Constitution and illegal and void and that in any case the absence of any amendment of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Sales Tax Act") incorporating the meaning of "sale" as provided in the Amendment Act, the provisions of sections 4 (f) and 6 of the Amendment Act do not authorise the levy and collection of sales tax from the petitioners in respect of sale of foodstuffs to their customers.

( 2 ) THE facts are not in dispute and lie in a narrow compass : The petitioners in the course of their business as hoteliers or keepers of bars and restaurants supply eatables and beverages to their customers. They are consumed in the premises and are not carried away.

( 3 ) IN State of Himachal Pradesh v. Associated Hotels of India [1972] 29 STC 474 (SC); AIR 1972 SC 1131 the Supreme Court ruled that the supply of meals by the hotels to resident visitors was not sale of food and hence not liable to sales tax. The Supreme Court again in Northern India Caterers v. Lt. Governor of Delhi [1978] 42 STC 386 (SC); AIR 1978 SC 1591 held that there was no distinction between a case of meals supplied to a resident in a hotel and those served to customers in restaurants and even in the latter case the principles laid down in State of Himachal Pradesh v. Associated Hotels of India [1972] 29 STC 474 (SC); AIR 1972 SC 1131 apply. A review sought for of the said decision was also subsequently dismissed by the Supreme Court in Northern India Caterers v. Lt. Governor of Delhi [1980] 45 STC 212 (SC); AIR 1980 SC 674.

( 4 ) THIS Court in Durga Bhavan v. Deputy Commercial Tax Officer [1981] 47 STC 104 rendered in September, 1980 held that the true effect of the earlier decision of the Supreme Court was that supply of food and drinks in restaurants and hotels to customers, where there was no right to carry away the food, was not a sale, but service and hence not exigible to sales tax under the A. P. General Sales Tax Act. The Court, however, held that sale of foodstuffs across the counter would obviously be transactions of sale within the meaning of the expression "sale" as defined in section 2 (1) (n) of the Sales Tax Act and the transactions were, therefore, exigible to sales tax. Accordingly this Court set aside the impugned orders of assessment and directed the assessing authorities to consider the matter afresh in the light of the principles laid down in the said decision. The hoteliers were accordingly reassessed and food supplied and consumed in the hotels was held not exigible to sales tax and sales tax was levied only on counter sales, i. e. , parcels of food taken away from the premises. In some cases, refund of tax already collected was also ordered.

( 5 ) CONSTITUTION (Forty-sixth Amendment) Act, 1982 was enacted by Parliament in its thirty-third year which came into force from 2/02/1983. By the said amendment, article 366 of the Constitution was amended by adding clause (29a) to article 366 of the Constitution. Clause (29a) (f) is relevant and reads as follows :"a tax on the supply, 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), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery o

Click Here to Read the rest of this document