KERALA HOTEL & RESTAURANT ASSN. vs STATE OF KERALA .

The Supreme Court upheld the constitutional validity of provisions in the Kerala General Sales Tax Act, 1963, and the Tamil Nadu General Sales Tax Act, 1959, which impose sales tax on cooked food sold in luxury hotels while exempting modest eating houses. The Court found that this classification does not violate Article 14, as it is based on intelligible differentia and has a rational nexus with the objective of raising revenue from affluent customers. The Court dismissed the appeals from hoteliers and allowed the appeals by the State of Tamil Nadu, affirming the legislative discretion in taxation classification.