Tax Exemption on Bar Attached Hotels: Kerala HC dismisses Review Petition in absence of error apparent on face of record [Read Order]

The Kerala High Court dismissed the review petition in the absence of error apparent on the face of record Tax Exemption on Bar Attached Hotels. The court 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. 

The revenue department, the petitioner filed the review petition seeking a review of the Judgment and Order passed in the batch of writ petitions including W.P.(C) No.39036 of 2022 which was in favour of the assessee, M/S Gayathri Hotels Edodi.

Counsel appearing for the parties, vide 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 licensees, 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. The Court considered all the documents which were placed on record and the submissions of both sides.

Mr. A. Muhammed Rafiq, Special Government Pleader, however, 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 this Court. He further submits that the reduction of tax from 10% to 5% was not limited only in respect of the sale effected 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. He further submitted that the proposal to reduce the tax from 10% to 5% in the cabinet decision has to be considered in that respect.

On the other hand, Mr. K. I. Mayankutty Mather, Counsel appeared for the respondents submitted that the Annexure (A) document placed on record i.e. 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

Once the notification was issued, the respondents herein remitted the tax, as per the time extended for filing the return and remittance of tax. There is no error apparent on the face of the record which requires the Court to review its well-considered Judgment.

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, the court dismissed the petition.

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