Hotel Sun World Vs State Tax Officer (Madras High Court)
In a recent decision, the Madras High Court addressed a significant issue concerning the VAT orders issued against Hotel Sun World. The court found that the original orders lacked transparency and failed to provide essential evidence, leading to a directive for reassessment.
Hotel Sun World, operating a hotel and bar with separate VAT and GST registrations, faced VAT assessment orders for the years 2017-2018 through 2022-2023. An inspection conducted from December 8 to December 10, 2022, led to the issuance of show cause notices and personal hearing notices dated January 4, 2024, and February 16, 2024.
Petitioner’s Argument
The petitioner challenged the VAT orders, arguing that the assessment was conducted without providing the necessary documents, including the report from the Manager, TASMAC, regarding liquor purchases. Despite requests for these documents, the petitioner claimed they were not furnished, leading to a violation of natural justice principles.
Government’s Position
The government contended that the petitioner did not cooperate during the inspection and failed to engage adequately with the notices and hearings. This lack of cooperation was cited as a reason for proceeding with the assessment despite the petitioner’s objections.
Court’s Decision
The Madras High Court acknowledged the petitioner’s failure to file proper returns but noted that the assessment orders were flawed due to the non-provision of material evidence. As a result, the court decided to quash the impugned orders and remand the case for fresh assessment. The petitioner is required to deposit ₹30,00,000 with the department within 30 days of receiving the court order.
