Case Law Details
State of Kerala Vs M/s. Gayathri Hotels (Kerala High Court)
Introduction: In a significant ruling, the Kerala High Court dismissed a review petition filed against its previous judgment dated 30.11.2023, which favored tax exemptions for bar-attached hotels during specified lockdown periods amidst the COVID-19 pandemic. The court found no apparent error in its prior decision, thereby maintaining the stance that the FL3 licensees who filed returns and cleared turnover tax timely are not liable to pay interest for the delayed filing.
Detailed Analysis: The review petition, aimed at revisiting the High Court’s judgment that granted tax relief to bar-attached hotels, was scrutinized under the lens of legal precision. The contention raised by the Special Government Pleader about a supposed oversight regarding the tax reduction period and its application was meticulously examined against the backdrop of legislative documents and cabinet decisions. The argument suggested that the exemption from paying the full tax rate was not limited to the COVID-19 lockdown periods but extended back to the financial years 2014-15 to 2015-16. This was contested by referencing cabinet notes and decisions which explicitly mentioned the reduced turnover tax rate applicable solely to the designated lockdown durations.
The court’s analysis underscored the principle of finality in litigation, emphasizing that review jurisdiction is to be exercised with restraint and only in cases of glaring errors. By delving into the submissions from both sides and evaluating the annexures provided, the Kerala High Court found the original judgment to be devoid of any errors warranting a review. The legal discourse illustrated the court’s commitment to a judicious interpretation of tax laws, especially in unprecedented situations such as a pandemic-induced lockdown.
Conclusion: The Kerala High Court’s dismssal of the review petition reaffirms the legal sanctity of its earlier judgment granting tax exemptions to bar-attached hotels during COVID-19 lockdown periods. The decision not only highlights the court’s careful consideration of the law and facts but also underscores the importance of stability and clarity in legal outcomes. For FL3 licensees, this ruling brings a closure to the dispute over interest liability on delayed turnover tax payments, marking a crucial victory in ensuring equitable tax treatment amid challenging times.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
1. Heard Mr. A. Muhammed Rafiq, learned Special Government Pleader for the review petitioners and Mr. Mayankutty Mather for the respondents.
2. This review petition has been filed seeking review of the Judgment and Order dated 30.11.2023 passed in the batch of writ petitions including W.P.(C) No.39036 of 2022.
3. This Court after hearing the learned Counsel appearing for the parties, vide the final Judgment and Order under review, held that in cases where the return were 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 lock down period. This Court considered all the documents which were placed on record and the submissions of both sides.
4. Mr. A. Muhammed Rafiq, learned Special Government Pleader, however submits 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 lock down period but, the exemption was granted for the period from 2014-15 to 2015- 16 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 refund of the 5% tax and, therefore, they were liable to pay the interest on delayed payment of turnover tax. He further submits that the proposal to reduce the tax from 10% to 5% in the cabinet decision has to be considered in that respect. Mr. A. Muhammed Rafiq has also placed reliance on Annexure (B) of the review petition which is the decision of the Cabinet. Relevant portion of Annexure (B) reads as under;
“Decision : Proposal (1) of Note accepted.
(2) the suggestion in the note was considered. It has been decided to extend the time for filing of the returns till March 31, 2022 and till April 30, 2022 for payment of arrears.”
5. On the other hand, Mr. K. I. Mayankutty Mather, learned Counsel appearing for the respondents submits 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 lock down 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.
5.1. Once the notification was issued, the respondents herein have remitted the tax, as per the time extended for filing the return and remittance of tax. This Court has considered every aspect of the matter, the submissions and documents placed on record. There is no error apparent on the face of the record which requires this Court to review its well considered Judgment dated 30.11.2023 in W.P.(C) No. 39036 of 2022 and connected matters.
6. I have considered the submissions. Review jurisdiction is to be exercised in a very limited manner where there an is error apparent on the face of the record. This Court has considered each and every document and the submissions while rendering the Judgment dated 30.11.2023 in W.P.(C) No.39036 of 2022 and connected matters. Furthermore, these documents were not part of the pleadings. Review does not mean rehearing or appeal. There has to be finality to a litigation. This Court, based on the submissions, documents and evidences, has rendered the Judgment sought to be reviewed. Therefore, I find no error apparent on the face of the record which warrants this Court to reconsider this Judgment under review. There is no substance in this review petition and the same is hereby dismissed.
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