The entire amount paid by the purchaser as consideration for the goods constitutes the sale price and is taxable.

The judgment of the Court was delivered by

DR. B. P. SARAF, J. - By this reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following questions of law to this Court for opinion :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the service of food in the various eating rooms of the applicants was a sale as defined in section 2(28) of the Bombay Sales Tax Act, 1959, and was liable to tax ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in rejecting the alternative contention of the applicants that only 50 per cent of the receipts in respect of the services of food in the various eating rooms was liable to tax ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in its conclusion that the service of food by the applicants in the eating rooms was not incidental to the services and amenities offered to the customers ?

(4) Whether, on the facts and in the circumstances of the case, there were two implied contracts, one for environment and amenities and the other for food and the price received for food only was liable to tax under the Bombay Sales Tax Act, 1959 ?

(5) Whether, the Tribunal was justified in its conclusion that the department had discharged the burden that service of food by the applicants to its customers in the various eating rooms was a transaction liable to tax under the Bombay Sales Tax Act, 1959 ?"

2. Counsel for the parties are agreed that the controversy in question Nos. 1, 3 and 5 stands concluded in favour of the Revenue by the ratio of the decision of this Court in Yogi Restaurant v. Commissioner of Sales Tax [1991] 83 STC 122 and Naranga Hotels Private Ltd. v. Union of India [1994] 94 STC 5. In that view of the matter, we answer questions 1, 3 and 5 in the affirmative and in favour of the Revenue.

3. The only questions that fall for determination are questions 2 and 4. We shall, therefore, briefly state only those facts which are relevant for determining the controversy involved in the said questions. Such facts are :

The assessee, M/s. East India Hotels Limited, carries on business as a hotelier and runs a five star hotel at Bombay which is known as "Oberoi Sheraton". In the course of its activity as a hotelier, the assessee serves vegetarian and non-vegetarian dishes of food, snacks, coffee, tea, beverages, etc., to its resident as well as non-resident customers. The Sales Tax Officer assessed the assessee under the Bombay Sales Tax Act, 1959 ("the Act"), for the period from April 1, 1972 to March 31, 1973, by his order of assessment dated April 10, 1974 and levied tax on the receipts for supply of the above items. Against the above order of assessment, the assessee appealed to the Assistant Commissioner of Sales Tax (Appeals) and contended that the Sales Tax Officer ought to have determined the turnover of sales in respect of supply of food and drinks by the assessee to its customers after making deductions therefrom of the charges for various facilities and amenities provided by the assessee in its five star hotel. It was submitted by the assessee that having regard to the high rates charged by the assessee for foods and drinks, it could not be said that the same were only for the supply of food and drinks. It was, therefore, submitted that the charges recovered by the assessee for the service of food and drinks should be bifurcated into two parts; 50 per cent being for supply of food and 50 per cent being for other factors, such as atmosphere and other amenities provided by the assessee. The Assistant Commissioner rejected this contention of the assessee by his order dated November 23, 1976, as according to him, the customer has no option to have the food supplied to him at 50 per cent of the rates by foregoing other amenities. The Assist