Little Star Recreation Club Vs State Tax Officer (Madras High Court)
The recent case of Little Star Recreation Club Vs State Tax Officer brings to the forefront the taxability of liquor supplied by clubs to their members and guests under the Tamil Nadu Value Added Tax (TNVAT). The Madras High Court, in its judgment dated 29.01.2024, remanded the matter back for reconsideration, highlighting significant aspects of tax law and its application to club supplies. This article delves into the details of the case, the arguments presented, and the implications of the court’s decision.
Background of the Case:
The petitioner, Little Star Recreation Club, a registered society under the Tamil Nadu Societies Registration Act, 1975, holds an FL-II license to supply liquor to its members and guests. The issue arose when the State Tax Officer issued a show cause notice dated 28.11.2023, proposing to levy tax on the supply of liquor under TNVAT for the assessment year 2023-24. The Club, in its reply dated 20.12.2023, contended that such supplies are not taxable, relying on the Supreme Court’s judgment in the State of West Bengal v. Kolkata Club (2019) 19 SCC 107.
Petitioner’s Arguments:
The petitioner’s senior counsel argued that the supply of liquor by the Club to its members and their guests is not liable to tax, referencing the Supreme Court’s decision. The counsel pointed out that the tax proposal was confirmed without considering these submissions, making the impugned order unreasoned and unsustainable.
