Manjula Chellur, J.

The controversy in the present petition pertains to the assessment year 2001-2002.

2. The petitioner herein is admittedly engaged in hotel business and for the years in question, they had submitted their returns declaring their taxable turnover of Rs.86,17,638/- (Rupees eighty six lakhs seventeen thousand and six thirty eight only). The respondents issued a notice proposing enhancement of turnover of Rs.1,99,582/-(Rupees one lakh ninety nine thousand and five hundred eighty two only). At that stage a revised return was filed submitting books of accounts and the taxable turn over shown at Rs.86,16,833/- (Rupees eighty six lakhs sixteen thousand and eight hundred thirty three only). The 2nd respondent increased turn over and confirmed the proposal in the notice by his assessment order dated 8.3.2004. The assessing authority taking into consideration all the payments received as banquet receipts, subjected the same at the higher rate of tax at 10% under Sub-section (a) of Section 5 of the Karnataka Sales Tax Act (hereinafter referred to as ‘the Act’). Aggrieved by the same, an appeal came to be filed before the Appellate Authority in KSTAP No.113/2004-05. However the Appellate Authority dismissed the appeals upholding the orders of the assessment.

3. Aggrieved by the same, the petitioner herein filed STA No.2576/2004 challenging the orders of the First Appellate Authority and the 2nd respondent on the ground that insipte of number of books of accounts before the assessing authority, though there was no scope for estimation of turnover, the assessing authority arbitrarily bifurcated the total over into two parts-one for taxation purpose giving benefit of composition of tax under Sub-Section (4) of Section 17 of the Act and the other one under Sub-Clause (a) of clause (3) of Section 5 of the Act.

4. According to the appellant, the banquet hall remained part of the hotel, part and parcel of the same premises and all the foods prepared in one and the same kitchen are supplied to the banquet hall. Therefore, even banquet receipts have to be taxed giving benefit of composition of tax as permitted under Sub-Section (4) of Section 17 of the Act. However, the Tribunal partly allowed the appeal remanding the matter back to the 2nd respondent giving percentage of liability of composition scheme upholding the enhancement of turnover made by the respondent/authorities. Aggrieved by the same, the present revision is filed.

5. According to the petitioner, as the food stuff prepared in the same kitchen is supplied to the banquet hall within the premises of business, without taking any charges for the utilization of the hall and when the supply of food is made at the same rate as that of the hotel, it cannot be understood as catering service at any stretch of imagination. Therefore, he seeks for the orders of the three authorities to be set aside.

6. According to the revision petitioner, the benefit available to the hotelier or restaurateur as the case may be is applicable to the present petitioner as he does the business in the nature of hotelier as well as restaurateur. Therefore mere supply of food to the banquet hall will not take away him from the meaning of either hotelier or restaurateur.

7. As against this, learned Counsel for the Department submits that in the normal course of business either as a hotelier or a restaurateur, as per the demand of the guest of the hotel or the restaurant, food is supplied and so far as catering, it is not as per the demand of the people who eat the food in the banquet hall, but it is the same food supplied to all the members, who eat in the said hall. Therefore, there is a difference between food supplied in the restaurant and the food supplied in the banquet hall. Therefore the banquet receipts cannot have the benefit of composition of tax as contemplated under Section 17(4) of the Act. Sub-Section (4) of Section 17 of the Act reads as under when the assessment in questi