Paradise Bar And Restaurant Vs State of Andhra Pradesh and Others (Andhra Pradesh High Court)
Andhra Pradesh High Court held that subsequent sale of liquor by the petitioner to the customer would not be exigible to VAT tax. Accordingly, writ is partly allowed.
Facts- The petitioner, who was running the business of a Bar and Restaurant in Ananthapur Town, had registered himself as a dealer, under the A.P. Value Added Tax Act, 2005.
AO issued a show cause notice, dated 23.07.2021, calling upon the petitioner to show cause as to why the turnover of the petitioner for the period July, 2014 to October, 2015 should not be assessed to tax. AO, after consideration of these objections, passed an order of assessment, dated 06.01.2022 assessing the tax payable by the petitioner as Rs.61,13,078/-. A rectification order, dated 25.02.2022, was passed and the tax payable was reduced to Rs.46,13,078/-.
Aggrieved by the initial order, dated 06.01.2022, and rectification order, dated 25.02.2022, the petitioner has approached this Court by way of the present writ petition.
Conclusion- Held that the turnover of Rs.4.54 crores, being the turnover relating to sale of alcohol and the turnover relating to sale of food has been taxed. The sale of alcohol, in the State of A.P., under the A.P. VAT Act, was to be taxed under Schedule VI ‘at the point of first sale in the State’. This sale would be the sale between M/s. Andhra Pradesh Beverages Corporation Limited and the petitioner. The subsequent sale of liquor by the petitioner to his customers would not be exigible to tax. In fact, Explanation-II to the definition of ‘taxable turnover’ stipulates that the sale prices relating to second and subsequent sale of goods, enumerated in Schedule VI, shall not form part of ‘taxable turnover’. This would mean that the entire turnover of Rs.4.54 crores, which is on account of sale of alcohol would have to be excluded from the taxable turnover of the petitioner. This would leave a turnover of Rs.1,02,20,407/-, which is the turnover relating to sale of food. As the turnover in question, is less than Rs.1.5 crores per year, the same would be taxable only under Section 4(9)(d).To this extent, the assessment order and the rectification orders dated 06.01.2022 and 25.02.2022 would have to stand modified.
