Madras High Court
Five Star Recreation Club vs The Assistant Commissioner (St) on 30 June, 2022
W.P(MD).No.13704 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 30.06.2022
CORAM
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
W.P(MD).No.13704 of 2022
and
W.M.P(MD).Nos.9735 and 9736 of 2022
Five Star Recreation Club,
Rep by its Secretary,
Sendhamaripandi ... Petitioner
Vs.
The Assistant Commissioner (ST)
Virudhunagar III Assessment Circle,
Ground Floor, CT Building,
Madurai Road,
Virudhunagar,
Virudhunagar District ...Respondent
Prayer : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorari, calling for the records
pertaining to the impugned Pre-Assessment Notices issued by the respondent
in Assessment No.33546402626/2019-2020, 2020-2021 and 2021-2022 for 3
assessment years dated 31.03.2021 and quash the same
For Petitioner : Mr.E.Marees Kumar
For Respondent : Mr.P.Subbaraj
Special Government Pleader
1/5
https://www.mhc.tn.gov.in/judis
W.P(MD).No.13704 of 2022
ORDER
The petitioner is the Secretary of Five Star Recreation Club has
challenged the pre-assessment notices issued by the respondent in Assessment
No.33546402626/2019-2020, 2020-2021 and 2021-2022 for 3 assessment
years dated 31.03.2021.
2. The primary contention of the petitioner is that the pre-assessment
notices cannot be issued to a recreation club, which has been a settled
provision in the case of State of West Bengal Vs Calcutta Club Limited
reported in 2019 (9) SCC 107. The Apex Court clearly held that applying the
doctrine of mutuality, any facility avail by the members of the club for food,
beverages is not a sale transaction between the club and its members and not
eligible to be taxed. It is specifically held that no consideration is passed for
supplies of food, drinks or beverages and there was only reimbursement of the
amount by the members and therefore, no sales tax could be levied. Thus
stressing upon the doctrine of mutuality, the demand of tax from the club and
its members has been quashed. This proposition has been consistently
followed by this Court in W.P.(MD).Nos.25501 of 2019 and 12115 to 12119
of 2019 etc., batch and recently in W.P(MD).No.9856 of 2022.
https://www.mhc.tn.gov.in/judis
W.P(MD).No.13704 of 2022
3. The learned Special Government Pleader for the respondent submits
that following the Supreme Court judgment, this Court had passed several
orders. It is only a pre-assessment notice and at the initial stage, if at all the
petitioner has any explanation to be offered following the above order, they
can approach the Assessment Officer. The Assessment Officer would take
appropriate decision by following the guidelines issued by the Apex Court as
well as this Court. The Apex Court in the case of State of West Bengal Vs
Calcutta Club Limited clearly stated that following the doctrine of mutuality
and held that there is no sale transaction between the club and its members.
4. In view of the same, this Court passed the similar order, which reads
as under:
“5. Therefore, this Court is of the considered opinion that
the petitioner shall give explanation for the show cause notice.
This writ petition is disposed of with the following directions:-
(i) The petitioner is directed to give explanation for the show
cause notice.
(ii) The respondent is directed to conduct an enquiry by
granting personal hearing and thereafter pass final orders. Until
the final order is passed, the respondent shall not take any step to
collect the assessment amount.
No costs. Consequently, the connected miscellaneous petitions are
closed.”
https://www.mhc.tn.gov.in/judis
W.P(MD).No.13704 of 2022
5. With the above direction, the writ petition stands disposed of. No
costs. Consequently, connected miscellaneous petitions are closed.
30.06.2022
Index : Yes / No
Internet : Yes/ No
aav
To
The Assistant Commissioner (ST)
Virudhunagar III Assessment Circle,
Ground Floor, CT Building,
Madurai Road,
Virudhunagar,
Virudhunagar District
https://www.mhc.tn.gov.in/judis
W.P(MD).No.13704 of 2022
M.NIRMAL KUMAR, J.
aav
W.P(MD).No.13704 of 2022
30.06.2022
https://www.mhc.tn.gov.in/judis
