Taxability of Liquor Supplied by Club to its Members and Guests under TNVAT: Madras HC Remands Matter Back for Reconsideration [Read Order]
The order simply stated the reply was not accepted, rendering it unreasoned and therefore unsustainable.
Taxability of Liquor – Club – TNVAT – Madras HC – Reconsideration – TAXSCAN
Taxability of Liquor – Club – TNVAT – Madras HC – Reconsideration – TAXSCAN
In the matter of taxability of the liquor supplied by the club to its members and guests under Tamil Nadu Value Added Tax ( TNVAT ) Act, 2006, the Madras High Court observed that the authorities did not consider the reply of the assessee. Thus, remanded the matter back for reconsideration.
The assessee-petitioner, Little Star Recreation Club is a Club registered as a Society under the Tamil Nadu Societies Registration Act, 1975. It possessed a FL-II licence for supply of liquor to its members and their guests in accordance with the rules of the Club.
A reply was submitted to the show cause notice where the assessee asserted that the supply of liquor by the Club to its members and their guests is not liable to tax. He also cited the case West Bengal v. Kolkata Club (2019) of the Supreme Court to support his assertions.
Mr.M.Sricharan Rangarajan Senior Advocate for Mr.C.Jeganathan, the assessee’s counsel pointed out that the petitioner expressly relied upon the judgment of the Supreme Court. Without taking such submissions into consideration, he contends that the tax proposal was confirmed.
However, the respondent's counsel submitted that the order would come to the aid of the petitioner only if the liquor is supplied to members of the Club and not to customers in general.
Justice Senthilkumar Ramamoorthy's bench reviewed the tax order and noted that while the reply was acknowledged, its contentions were disregarded. The order simply stated the reply was not accepted, rendering it unreasoned and therefore unsustainable.
Thus, the Madras High Court set aside the impugned order and remanded for reconsideration. The respondent authorities were directed to issue a fresh order after providing a hearing opportunity. Consequently, the bank account attachment was also raised and clarified that no recovery or other proceedings shall be initiated. Also read: Challenge on Applicability of Penalty under Amended Rule of M.P Foreign Liquor Rules: Supreme Court directs to Apply Amended Rule
To Read the full text of the Order CLICK HERE
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