N.N. KAPUR, J.

The following questions have been referred to us by the Lt. Governor of Delhi under the provisions of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi :

"(1) Whether, on the circumstances and on the facts of this case, the applicant-company is legally entitled to split up the restaurant sales into charges for services rendered and price for sale of goods and comprising of the sale price of the goods and service charges when consolidated rate is charged without making any break-up in the bills and if so, on what basis and at what rate ?

(2) Whether, on the facts and in the circumstances of the case, the applicant company is legally entitled to split up its turnover in respect of sale of goods and services for special reception and meetings when consolidated rate is charged ? If so, on what basis and at what rate ?

(3) Whether, on the facts and in the circumstances of the case, the learned Financial Commissioner was justified to hold that the receipts from holding special eves were not exempt from the levy of sales tax entirely ?

The questions relate to sales made by M/s. East India Hotels Ltd., in the hotel known as Oberoi Intercontinental Hotel situated on Dr. Zakir Hussain Road, New Delhi. The questions have arisen concerning the claim of the assessee to the effect that the sales made in the restaurant were not chargeable to sales tax in entirety, the plea of the assessee being that the sales included elements like entertainment, special decorations and other services distinct from the mere supply of food. The case of the assessee was that tax could be charged only on the sale of food and not on the element of entertainment, decorations and other services. The final order passed in revision by the Financial Commissioner shows that there was a cafeteria which is being run for the staff which was run on a no-profit-no-loss basis and regarding the sales from this cafeteria they were not in the course of business and, hence, were not liable to be included within the taxable turnover of the assessee.

Regarding the receipts from the restaurant business, the Financial Commissioner was of the view that if there was an element in the charge which was subject to an entertainment tax, that should be separated. In respect of sales made at receptions, meetings, marriages, etc., the Financial Commissioner ordered that 15 per cent of the receipts should be excluded from tax. The other claim of the assessee that the normal restaurant sales should be subjected to a 50 per cent deduction on account of other amenities was not accepted.

This has led to the present reference. The learned counsel for the assessee submits that the questions referred to us are covered by the judgments in the

Northern India Caterers (India) Ltd.'s case ([1978] 42 S.T.C. 386 (S.C.); A.I.R. 1978 S.C. 1519 and [1980] 45 S.T.C. 212(S.C.); A.I.R. 1980 S.C. 674.) decided by the Supreme Court. The learned counsel for the department also submits the same. However, it was pointed out that the initial judgment which is reported as Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1918] 42 S.T.C. 388 (S.C.)) was reviewed and the review is published as [1980] 45 S.T.C. 212 (S.C.)) It is contended on behalf of the department that the judgment passed in review clearly shows that the initial judgment was limited to certain types of cases and could not apply generally.

It is now necessary to refer to the actual decision of the Supreme Court and also the decision in the review petition.

The initial judgment was a unanimous judgment in which it was held that when food is served to a customer in a restaurant, it is not a sale as such. It was observed as follows :

"It was urged for the respondent that in Associated Hotels of India Ltd. ([1972] 29 S.T.C. 474 (S.C.); A.I.R. 1972 S.C. 1131.) this court drew a distinction between the case of meals supplied to a resident in a hotel and those served to a customer in a restaurant. We are unable