5% Tax under KGST Act on Total Turnover of Bar Attached Hotels: Kerala HC dismisses Review Petition [Read Order]

The single bench of the Kerala High Court dismissed the review petition on the judgement which directs payment of 5% Tax under the Kerala General Sales Tax Act, 1963 on the total turnover of bar-attached hotels based on tax exemption allowed during COVID.

Mr A. Muhammed Rafiq, Special Government Pleader appeared for the review petitioners and Mr Mayankutty Mather appeared for the respondents, KMA Resorts Pvt Ltd. The review petition has been filed seeking a review of the Judgment and Order passed in the batch of writ petitions.

The Court with the Final Judgment and Order under review, held that in cases where the return was filed on or before 31.03.2022 and turnover tax was cleared on or before 30.04.2022 by the FL3 lincencees, for the period from 22.05.2020 to 21.12.2020 and from 15.06.2021 to 25.09.2021 for the financial years 2020-21 and 2021-22, they would not be liable to pay interest for delayed filing of the returns and payment of turnover tax @ 5% on their parcel sales authorised by the Government during the Covid lockdown period. 

Mr. A. Muhammed Rafiq, Special Government Pleader submitted that there has occurred an error apparent on the face of the record which occasioned the review petitioners to seek review of the Judgment and Order dated 30.11.2023 passed by the Court.

He further submitted that the reduction of tax from 10% to 5% was not limited only with respect to the sales affected by the Bar attached Hotels during the Covid lockdown period but, the exemption was granted for the period from 2014-15 to 201516 as per the Cabinet Note placed on record as Annexure (A) by which the decision was taken to amend Section 7A of the Kerala General Sales Tax Act, 1963.  The exemption from payment of tax up to 5% by the Bar attached Hotels on their parcel sales, would not mean that they were not required to pay the tax @ 10%, but they could have claimed a refund of the 5% tax and, therefore, they were liable to pay the interest on delayed payment of turnover tax.

On the other hand, Mr. K. I. Mayankutty Mather, Counsel appearing for the respondents submitted that the note put up before the Cabinet for consideration regarding the reduction of turnover tax for the period during lockdown from 22.05.2020 to 21.12.2020 and from 15.06.2021 to 25.09.2021 is specific that the Bar attached Hotels and shops were required to pay 5% of the turnover tax as is applicable in respect of the retail outlets run by the Beverages Corporation. In pursuance to the said cabinet note, the cabinet has taken the decision and, thereafter, Exhibit P-2 was issued notifying the rate of turnover tax.

The court of Justice Dinesh Kumar Singh observed that review jurisdiction is to be exercised in a very limited manner where there an is error apparent on the face of the record. Since there was no error apparent on the face of the record which warrants the Court to reconsider the Judgment under review, there is no substance in the review petition. The court dismissed the review petition.

To Read the full text of the Order CLICK HERE

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