Madras High Court
Tvl. Robin Recreation Club vs The State Tax Officer on 21 April, 2023
W.P.(MD) No.21590 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 21.04.2023
CORAM:
THE HONOURABLE MS.JUSTICE P.T.ASHA
W.P.(MD) No.21590 of 2022
and
W.M.P.(MD) Nos.15730 and 15732 of 2022
Tvl. Robin Recreation Club,
W-6/23, Main Road,
Hanumanthanpatti,
Uthamapalayam Taluk,
Theni District,
Rep., by its Secretary,
Mr.K.Regan .. Petitioner
Vs.
1.The State Tax Officer,
Usilampatti Assessment Circle,
Uthamapalayam,
Theni District.
2.The Branch Manager,
City Union Bank,
Cumbum Branch,
Theni District. .. Respondents
Prayer :- Petition filed under Article 226 of the Constitution of India,
praying for issuance of Writ of Certiorari, calling for the records
pertaining to the impugned proceedings passed by the 1st respondent vide
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W.P.(MD) No.21590 of 2022
TIN No.33475102906/2012-13 dated 03.12.2015 and consequential
proceedings in Na.Ka.No.747/2016-A3 dated 03.08.2022 and
consequential proceedings issued by the 1st respondent in ROC
747/2016/A3 dated 17.08.2022 and quash the same.
For Petitioner : Mr.Sricharan Rangarajan
Senior Counsel
assisted by Mr.C.Jeganathan
For R1 : Mr.J.Ravindran
Additional Advocate General
assisted by
Mr.D.Ghandiraj
Special Government Pleader
For R2 : Mr.N.Dilipkumar
Standing Counsel
ORDER
This writ petition is filed for the following relief:
“For the issue of a Writ of Certiorari, calling
for the records pertaining to the impugned
proceedings passed by the first respondent vide TIN
No.33475102906/2012-13 dated 03.12.2015 and
consequential proceedings in Na.Ka.No.747/2016-A3
dated 03.08.2022 and consequential proceedings
issued by the first respondent in ROC 747/2016/A3
dated 17.08.2022 and quash the same.”
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W.P.(MD) No.21590 of 2022
2. The main argument advanced by Mr.Sricharan Rangarajan,
learned Senior Counsel appearing on behalf of the petitioner is that the
impugned order is one passed without jurisdiction, since by reason of the
judgment of the Hon'ble Supreme Court in State of West Bengal and
Ors. Vs. Calcutta Club Limited reported in (2019) 9 SCC 107, any
facility availed by a member of a club with regard to the food, beverages,
etc., does not constitute a sale between a club and a member and is
therefore, not liable to be taxed. The same is based on the doctrine of
mutuality. This proposition has been consistently followed and the
Hon'ble First Bench of this Court in a batch of writ petitions in W.P.(MD)
Nos.12115 to 12129 of 2019 etc., by order dated 26.02.2020 has
observed that in the light of the said judgment of the Hon'ble Supreme
Court, the show cause notices issued by the Assessing Officer proposing
levy on the writ petitioners, who were Recreation Clubs, ought to be
interfered with. The petitioner Club was one of the petitioners before the
Hon'ble First Bench. He would submit that when this position of law has
not changed, the first respondent has come forward with the impugned
order. He would further submit that the first respondent has taken into
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W.P.(MD) No.21590 of 2022
account the entire purchase value and arrived at the tax, which is per se
wrong. He would, therefore, submit that the impugned order has to be
set aside.
3. Per contra, Mr.J.Ravindran, learned Additional Advocate
General assisted by Mr.D.Ghandiraj, learned Special Government
Pleader appearing for the respondents would submit that mere perusal of
the quantity of the liquor purchased by the petitioner from the TASMAC
would clearly indicate that the same was purchased for the purpose of the
club alone and that the petitioner club was selling it to outsiders and
therefore, the same is taxable and no exception can be taken to the
demand.
4. Heard the learned counsel for the parties and perused the
records.
5. Perusal of the impugned order would indicate that the first
respondent has treated the entire purchase as taxable and has ignored the
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W.P.(MD) No.21590 of 2022
judgment of the Hon'ble Supreme Court and that of the First Bench of
this Court. The first respondent is fully aware that the petitioner as a
club supplies liquor to its members, however the respondent has not
factored the consumption of liquor by the members. Therefore, there
appears to be a prima facie error in the order concerned.
6. Be that as it may, the petitioner must have shown proof that the
liquor purchased have been consumed by their members. Therefore, in
the light of the judgment of the Hon'ble Supreme Court as also the First
Bench of this Court, the demand is erroneous and has to necessarily be
interfered with. However, taking note of the fact that the petitioner has
not responded to the original show cause notice and given details of the
consumption by the members of the club, the matter shall be remitted
back to the first respondent for fresh consideration.
7. Thus, for all the above reasons, this Writ Petition is allowed, the
impugned proceedings passed by the first respondent vide TIN No.
33475102906/2012-13 dated 03.12.2015, the consequential proceedings
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W.P.(MD) No.21590 of 2022
in Na.Ka.No.747/2016-A3 dated 03.08.2022 and the consequential
proceedings in ROC 747/2016/A3 dated 17.08.2022 are set aside and the
matter is remitted back to the first respondent for fresh consideration.
The petitioner shall file their reply to the show cause notice with all
attendant documents within a period of 15 days from today (21.04.2023)
and on receiving the said documents, the first respondent shall consider
the same, afford an opportunity of personal hearing and pass orders
within a period of one month therefrom. It is made clear that in case, the
hearing is delayed on account of the petitioner, the petitioner shall be
permitted to continue the enquiry only after depositing a sum of
Rs.20,00,000/- (Rupees Twenty Laksh only). No costs. Consequently,
connected miscellaneous petitions are closed.
21.04.2023
NCC : Yes/No
Index : Yes/No
Internet : Yes
abr
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W.P.(MD) No.21590 of 2022
To
The State Tax Officer,
Usilampatti Assessment Circle,
Uthamapalayam, Theni District.
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W.P.(MD) No.21590 of 2022
P.T.ASHA, J.
abr
W.P.(MD) No.21590 of 2022
Dated: 21.04.2023
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