Assessee needs to demonstrate that their case is covered within ambit of any settled judgement

Tvl.Surya Recreation Club Vs Assistant Commissioner (CT) (Madras High Court)

Madras High Court held that Supreme Court in the case of State of West Bengal vs. Calcutta Club Limited concluded that sales tax is not payable on any sale of goods in the form of food, refreshments and drinks including liquors by the club to its permanent members. However, petitioner needs to demonstrate that their case comes within the ambit of said judgement.

Facts-

Petition filed under Article 226 of the Constitution of India praying for issuance of writ of Certiorarified Mandamus, calling for the records relating to the impugned order passed by the Respondent [Assistant Commissioner (CT)] and the consequential orders and quash the same as illegal and consequently, to forbear the Respondent from assessing the Petitioner Club to service tax.

It is the case of the Petitioner that the issue as to whether there is any sale of goods in the form of food, refreshments and drinks including liquors by the Petitioner to its permanent members and thus, the Petitioner is not liable to pay sales tax under Tamil Nadu Value Added Tax Act, 2006 stands resolved by the judgment of the Supreme Court in the case of State of West Bengal vs. Calcutta Club Limited , wherein, it has been held that doctrine of mutuality would continue to apply even after 46th Amendment of the Constitution of India. It is thus submitted that proposed levy is without jurisdiction.

To the contrary, it was submitted by the Additional Government Pleader for the Respondent that this is only a notice and it may be necessary for the Petitioner to respond and demonstrate before the Assessing Officer, that they come within the ambit of the judgment of the Hon’ble Supreme Court in Calcutta Club’s case.

Conclusion-

Held that I find that there is merit in the submission made by the learned Additional Government Pleader for the Respondent. The Petitioner are at liberty to submit their objections within a period of three weeks from the date of receipt of a copy of the order to the notice dated 14.11.2022. It is open to the Petitioner to place reliance on Calcutta’s Club case. If any such objection is filed, the Respondent shall pass orders in accordance with law taking into account the judgment of the Hon’ble Supreme Court in the Calcutta’s Club case after granting opportunity to the Petitioner within a period of three weeks from the date of receipt of a copy of the objection.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This Writ Petition has been filed challenging the impugned notice dated 19.10.2022 followed by another notice dated 14.11.2022.

2. It is the case of the Petitioner that the issue as to whether there is any sale of goods in the form of food, refreshments and drinks including liquors by the Petitioner to its permanent members and thus, the Petitioner is not liable to pay sales tax under Tamil Nadu Value Added Tax Act, 2006 stands resolved by the judgment of the Hon’ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Limited reported in 2019 SCC Online SC 1291 , wherein, it has been held that doctrine of mutuality would continue to apply even after 46^th amendment of the Constitution of India. It is thus submitted that proposed levy is without jurisdiction.

3. To the contrary, it is submitted by the learned Additional Government Pleader for the Respondent that this is only a notice and it may be necessary for the Petitioner to respond and demonstrate before the Assessing Officer, that they come within the ambit of the judgment of the Hon’ble Supreme Court in Calcutta Club’s case.

4. I find that there is merit in the submission made by the learned Additional Government Pleader for the Respondent. The Petitioner are at liberty to submit their objections within a period of three weeks from the date of receipt of a copy of the order to the notice dated 14.11.2022. It is open to the Petitioner to place reliance on Calcutta’s Club case. If any such objection is filed, the Respondent shall pass orders in accordance with law taking into account the judgment of the Hon’ble Supreme Court in the Calcutta’s Club case after granting opportunity to the Petitioner within a period of three weeks from the date of receipt of a copy of the objection.

5. Accordingly, this Writ Petition is dismissed. No costs. Consequently, connected Miscellaneous Petitions are closed.