Madras High Court junks club's petition against VAT notice on food and drinks sale
Finds merit in the respondent’s submission and directs the petitioner to submit its objections within three weeks
Madras High Court junks club's petition against VAT notice on food and drinks sale
Finds merit in the respondent's submission and directs the petitioner to submit its objections within three weeks
A single bench of the Madras High Court has dismissed a petition against a Value Added Tax (VAT) notice on the sale of food, refreshment, and drinks, including liquor, by the Tvl.Surya Recreation Club to its members.
Filed under Article 226 of the Constitution of India for the issuance of a writ of Certiorarified Mandamus, the petition by the Club sought records relating to the order passed by the assistant commissioner (respondent). It desired to know the consequential orders and quashing the same as illegal and forbear the respondent from assessing the club to service tax.
The issue was whether there was any sale of goods in the form of food, refreshments, and drinks, including liquor by the petitioner to its permanent members. The petitioner said it was not liable to pay sales tax under the Tamil Nadu Value Added Tax Act, 2006, which stood resolved.
It was based on the judgment of the Supreme Court in the State of West Bengal vs Calcutta Club Limited case, wherein, it was held that the doctrine of mutuality would apply even after the 46th Amendment of the Indian Constitution. It was thus submitted that the proposed levy was without jurisdiction.
On the other hand, the respondent submitted that it was only a notice. It was necessary for the petitioner to respond and demonstrate before the Assessing Officer (AO), that it comes within the ambit of the judgment of the apex court.
The bench comprising Justice Mohammed Shaffiq observed, "There is merit in the submission made by the respondent. The petitioner is at liberty to submit its objections within three weeks.
The court added, "It is open to the petitioner to place reliance on Calcutta's Club case. If any objection is filed, the respondent shall pass orders in accordance with the law after granting an opportunity to the petitioner."