Case Law Details
Erode Medical Centre Vs State Tax Officer-2 (Madras High Court)
In a recent legal development, the Madras High Court addressed a contentious issue concerning GST liability on a rent-free canteen facility at Erode Medical Centre. The petitioner challenged an order dated 27.03.2024, alleging lack of proper application of mind by the authorities.
The crux of the petitioner’s argument was centered around two main points. Firstly, it was contended that the assessment order erroneously alleged non-payment of tax on the sale of medicines, despite the medicines being sold by separate entities—EMC Pharmacy (HUF) and EMC Pharmacy, a partnership firm—that had already remitted the requisite taxes. Secondly, the order imposed GST on the premises used for a canteen facility that was provided rent-free to benefit hospital visitors. The petitioner had clarified in their reply that no rent was charged for this service.
The court examined the records and noted that these crucial aspects, including the clarification regarding the sale of medicines and the rent-free nature of the canteen facility, were not adequately considered in the impugned order. In light of this failure to properly address the petitioner’s submissions, the court set aside the order dated 27.03.2024.
Consequently, the Madras High Court remanded the matter back to the assessing authority for reconsideration. The court directed the respondent to provide the petitioner with a reasonable opportunity, including a personal hearing, and instructed them to issue a fresh order within three months from the receipt of the court’s order.
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