Deputy Commissioner of State Tax & Anr Vs Hotel Sayooj (Supreme Court of India)
Supreme Court Dismisses Tax Department’s Appeal
The Supreme Court of India has dismissed an appeal by the Deputy Commissioner of State Tax, upholding a Kerala High Court decision in the case of Deputy Commissioner of State Tax & Anr Vs Hotel Sayooj. The apex court’s ruling reinforces the principle that a taxpayer’s choice to pay tax under Section 5 of the Kerala General Sales Tax (KGST) Act, 1963, is valid, and the tax department cannot compel them to be assessed under Section 7 of the same Act. The Court stated it found no “illegality” in the High Court’s judgment, effectively siding with the assessee, Hotel Sayooj.
The Case and High Court’s Rationale
The dispute arose when the tax department sought to assess Hotel Sayooj under Section 7 of the KGST Act, despite the hotel having opted to pay tax under Section 5. The Kerala High Court, in a writ appeal, had already ruled in favor of the assessee. The High Court’s finding was that the hotel had simply chosen a legally permissible option for tax payment. The Supreme Court’s decision to dismiss the tax department’s appeal with a simple observation that the High Court’s order was not illegal signifies its agreement with this core finding. The Court also condoned the delay in the tax department’s filing of the appeal, but this did not alter the final outcome.
