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2021 Supreme(Online)(MAD) 21190
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 20.05.2021 CORAM:
THE HON'BLE Dr.JUSTICE ANITA SUMANTH W.P. Nos.13469 of 2020, 28789 & 28095 of 2019 and 1748 & 5935 of 2021 and WMP. Nos. 16637 of 2020, 28539, 27715 of 2019, 1951 & 6571 of 2021 Anjappar Chettinad A/C Restaurant, Represented by its Partner A Kandaswamy, No.5, Dev Apartments, 1st Main Road, KB Nagar, Adayar, Chennai 600 020 .. Petitioner in W.P. No.13469 of 2020 M/s RSM Foods (P) Ltd, Represented by its Director, Mr.N.Murali, No.50, Ganapathy Nagar, Velachery, Chennai – 600 042. .. Petitioner in W.P. No.28789 of 2019 M/s.Thalapakatti Hotels Pvt. Ltd, Represented by its Managing Director, Mr.D.Nagasamy, F.11, 2nd Main Road, Chennai – 600 102 .. Petitioner in W.P. Nos.28095 of 2019 and W.P. No.1748 of 2021 M/s Prasanam Foods (P) Ltd.
Represented by its Director, Mr.Pradyumna Acharya, No.103/82, G.N.Chetty Road, T.Nagar, Chennai 600 017. .. Petitioner in W.P. No.5935 of 2021 Vs.
Joint Commissioner, Office of the Commissioner of GST and Central Excise, Chennai South Commissionerate, No.692, MHU Complex, 5th Floor, Anna Salai, Nandanam, Chennai – 600 035. .. Respondent in W.P. No.13469 of 2020 The Commissioner of GST and Central Excise, Chennai South, No.692, MHU Complex, 5th Floor, Anna Salai, Nandanam, Chennai – 600 035. .. Respondent in W.P. Nos.28789, 28095 of 2019 & 1748 of 2021 The Additional Commisioner of GST and Central Excise, Office of the Commissionerate of GST & C.Ex., Chennai South Commissionerate, No.692, MHU Complex, 5th Floor, Anna Salai, Nandanam, Chennai – 600 035. .. Respondent in W.P. No.5935 of 2021 Prayer in W.P. No.13469 of 2020: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari to call for the records in Order in Original No.06/2020-JC dated 30.04.2020 in C.No.V/15/206/2018-CS Adj issued by the Respondent and quash the same as arbitrary and illegal.
Prayer in W.P. No.28789 of 2019: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorarified Mandamus to call for the records of the respondent comprised in the impugned Order-in-Original No.13/2019 (c) dated 20.05.2019 and quash the same and direct the respondent to hear the petitioners on the merits and dispose of the same after affording sufficient opportunity of personal hearing.
Prayer in W.P. No.28095 of 2019 and 1748 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari to call for the records relating to the impugned order-in-original no.12/2019 (c) dated 17.05.2019, 27/2020 (C) dated 07.12.2020 issued by the Respondent in C.No.V/15/209/2018 CS Adj, C.No.V/15/2/2019-CS Adj and quash the same.
Prayer in W.P. No.5935 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorarified Mandamus to call for the records of the respondent comprised in the impugned Order-in-Original No.20/2020 ADC dated 31.08.2020 and quash the same and direct the respondent to hear the petitioners on the merits and dispose of the same after affording sufficient opportunity of personal hearing.
For Petitioner : Mr.Joseph Prabakar in W.P. No.13469 of 2020 Mr.Hari Radhakrishnan, in W.P. No.28095 of 2019 & 1748 of 2021 Mrs.P.Jayalakshmi in W.P. No.28789 of 2019 and 5935 of 2021 For Respondents : Mr.Rajnish Pathiyil, Senior Standing Counsel in W.P. No.13469 of 2020 Mr.A.P.Srinivas, Senior Standing Counsel in W.P. No.28095 of 2019 & 1748 of 2021 V.Sundareswaran, in W.P. No.28789 of 2019 and 5935 of 2021
C O M M O N O R D E R
This batch of Writ Petitions involves an interesting question as to the liability to service tax under the Finance Act, 1994 (in short ‘Act’), on food that is ‘taken away’ or collected from restaurants or eateries, in parcels.
2. All four petitioners run air-conditioned restaurants under the name and style of Anjappar Chettinad (A/c Restaurant), Thalapakkatti Hotels, RSM Foods and Prasanam Foods, the latter two being franchisees of Sangeetha restaurant, respectively.
3. The facts in common are that the petitioners hold service tax registration for providing restaurant services, outdoor catering services and mandap keeping services. Audit was undertaken in all the cases and the conclusion arrived at by the Department was that service tax had not been discharged in relation to ‘take away/parcel services’ for various periods upto June, 2017 when Goods Services Tax Act, 2017 came into force.
4. Heard Mr.Joseph Prabakar, learned counsel for the petitioner in W.P.No.13469 of 2020, Mr.Hari Radhakrishnan, learned counsel for the petitioner in W.P.Nos.28095 of 2019 and 1748 of 2021 and Mrs.P.Jayalakshmi, learned counsel for the petitioner in W.P.Nos.28789 of 2019 and 5935 of 2021 and Mr.Rajnish Pathiyil, learned Senior Standing Counsel for the respondents in W.P.No.13469 of 2020, Mr.A.P.Srinivas, learned Senior Standing Counsel for the respondents in W.P.Nos.28095 of 2019 and 1748 of 2021 and Mr.V.Sundareswaran, learned Senior Panel Counsel for the respondent in W.P.No.28789 of 2019.
5. According to the petitioners, there is no liability for sale of food at the take-away counter or by parcel. They would state that the sale of packaged food constitutes pure trading activity and there is no component of service involved therein. They rely on the definition of ‘service’ under Section 65B(44), which excludes the transfer of title in goods by way of sale. In the light of this exclusion, parcel sales or take away food would stand outside the ambit of service tax.
6. According to them, in parcel sales, there could be no artificial splitting of transactions between one of ‘service’ and one of ‘sale’ with the attempt to bring the same under the purview of the former. The petitioners rely on letter bearing No.DOF 334/3/2011-TRU dated 28.02.2011 which had, according to them, clarified that service tax is not intended to cover sale of food that is collected or picked up for consumption elsewhere.
7. Restaurant service, by definition means that all attributes of a restaurant such as organised seating, air-conditioning, service at the table, live music and enhanced hospitality are included. These attributes are absent in a transaction of take-away. In fact, service tax on restaurant services have itself been restricted only to service in air-conditioned restaurants.
8. The petitioners rely on the judgment of the Supreme Court in the case of
1Federation of Hotel and Restaurant Associations of India V. Union of India, wherein the federation had sought a declaration that the provisions of the Standards of Weights and Measures Act, 1976 and allied enactments and rules were not applicable to services rendered in hotels/restaurants. While allowing the
appeals, the Court observed, at paragraph 10, that there could be no artificial division or distinction made between the sale and service elements when it comes to service of food in a restaurant.
9. The petitioners also refer to the judgment of the Supreme Court in the case of 2Tamil Nadu Kalyana Mandapam Association V. Union of India wherein the challenge was to the constitutional validity of Sections 65, 66 and 67 of the Act in terms of which, service tax was levied on mandap keepers and catering services. My attention is drawn to para 55 wherein the Bench, while deciding the question of taxability of the mandap keepers, makes a distinction between services rendered in a restaurant or a hotel, vis-à-vis services rendered by an outdoor caterer.
10. Then again, in 3Safety Ret
