The petitioner is aggrieved by the assessment orders Exts. P5 and P6 passed for the years 2007-08 and 2008-09, wherein the assessing officer attempted to estimate the cooked food turn over at 15% of the turn over of the IMFL in both the years. The assessee's specific contention is that, the assessee had been conducting two bar hotels with licence to carry on the trade of IMFL and in both the hotels there were restaurants, the operation of which is leased out to two different individuals. The said persons who had been conducting the restaurant, in the bar hotel, were both registered under the tax authorities and they were assessed to the turn over of cooked food, served in the restaurants. In such circumstance, the assessee's turn over of cooked food estimated by the petitioner is wholly without jurisdiction, is the contention.
2. Normally, this Court would not have considered a challenge against the assessment order directly under Article 226 of the Constitution of India. It is to be noticed that, in another year, ie., 2006-07, the assessee's assessment was completed in a similar fashion, wherein, 25% of the turn over of IMFL was estimated as turn over of cooked food. The same is evident from Ext.P1 assessment order, which was challenged in Ext.P2 appeal. The factual circumstances with respect to the lease of the premises of the restaurant was specifically noticed by the first appellate authority, in reversing the estimation made. Ext.P2 has become final insofar as the State having not preferred any second appeal from the same. The petitioner also placed relied on State of Kerala v. Hotel Amrutha in [(2000) 120 STC 28], wherein, the State had challenged the order of a Tribunal in which the estimation against turn over of cooked food was negatived for the reason of the restaurant having been conducted by a person other than the licensee of IMFL and the turn over of that person having been assessed by the authorities.
3. The learned Government Pleader however, would point out Form FL3 in the Foreign Liquor Rules which mandates that the licence is granted for the vend of foreign liquor in “his hotel (restaurant)”. According to the learned Government Pleader, the same mandates that the licence for conduct of IMFL can only be operated in a hotel owned by the licensee and the restaurant also should be owned and run by the licensee. It is trite that, the Form does not regulate the grant of licence and it is the statute and the rules framed thereunder which regulate the conditions of licence. In the context of there being, absolutely no provision or rule mandating that the licensee of the IMFL himself should supply the cooked food, this Court cannot accept the contention raised by the learned Government Pleader.
4. In fact, as was noticed above, the very same contentions were raised before this Court, in an earlier proceeding wherein a Division Bench of this Court in a revision filed against the order of the Tribunal said so in paragraphs 9 and 10 as extracted hereunder:-
9. After hearing both sides, we are of the view that we cannot accept the contention of the Revenue. It is seen from the guidelines that what is required is that there should be a well maintained dining room/restaurant serving good clean wholesome food and a clean, hygienic and well equipped kitchen. From this, it cannot be inferred that the restaurant should be directly run by the hotel itself. There is no restriction in the restaurant being conducted by another person. But the only thing is that the food served should be clean wholesome food and a clean, hygienic and well equipped kitchen. The other contention is with regard to condition No.1 in the licence, which has already been extracted above. This condition only says that there should be a separate room for consumption of liquor and it should be served to the residents in the hotel or their guests or to casual visitors partaking of meals cooked and served in European fashion. From this, it cannot be inferred that cooked food also should be served along with liquor or that the food also should be cooked and served by the licensee himself.
10. Learned counsel for the Revenue then brought to our notice the following condition in Rule 13(3) of the Foreign Liquor Rule : “The cost of liquor shall be billed along with the cost of meals. The cost of liquor shall be shown separately in the bill and the duplicate copies thereof shall be retained for inspection by the Officers of the Excise Department”. Learned counsel for the Revenue submitted that on the basis of this, meals should also be supplied by the licencee. We are of the view that this also does not insist that the food should be cooked and served by the hotel itself. Further, we are of the view that even if there is violation of the Foreign Liquor Rules, that cannot be taken advantage. Thus, the revisions filed by the Revenue, viz., T.R.C Nos. 154, 163 and 167 are dismissed.
5. This Court is bound by the Division Bench judgment. In any event, it is to be noticed that, though the statute prescribes for supply of food along with liquor, there is no mandate that the one and the same person should supply the food and liquor. In any premises wherein the liquor is supplied, it is a necessary mandate that, there should be provision for supply of cooked food also. That alone cannot be considered, as a mandate on the licensee, under the Abkari Act and Rules, to carry on supply of the cooked food by himself. In the present case, it is to be noticed that, the supply of cooked food was carried on in the licensed premises, wherein liquor was also supplied. The restaurant in both the hotels were leased out to two separate registered dealers, who were assessed to the turn over of cooked food served in the hotel. There cannot be any assessment of the very same turn over, which has been assessed in the hands of the lessees of such restaurant.
6. In such circumstance, the assessment orders Exts.P5 and P6 insofar as estimating the turn over of cooked food at the rate of 15% of the turn over of IMFL, is set aside, only to that extent. The demand otherwise raised as per Exts.P5 and P6 shall be the liability of the petitioner.
With the above modifications in Exts.P5 and P6, the Writ Petition is allowed. The petitioner shall suffer their respective costs.
K. VINOD CHANDRAN, JUDGE SB