Madras High Court
Tvl.Diana Manamagil Mandram vs The State Tax Officer on 10 January, 2023
W.P. (MD) No. 630 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 10.01.2023
CORAM
THE HON'BLE MR. JUSTICE P.D. AUDIKESAVALU
W.P. (MD) No. 630 of 2023
and
W.M.P. (MD) No. 627 of 2023
Tvl.Diana Manamagil Mandram,
No.18/20A1, Thakkalai Road,
Karungal,
Kanniyakumari District,
Rep. by its Secretary,
T.Chandra Sekar. ... Petitioner
-vs-
The State Tax Officer,
Kuzhithurai,
Kanniyakumari District. ... Respondent
Prayer:- Petition filed under Article 226 of the Constitution of India praying to
issue a Writ of Certiorari, calling for the records pertaining to the impugned
order passed by the respondent in his proceedings TIN No.
33206397713/2021-22 dated 30.12.2022 and quash the same as illegal.
For Petitioner : Mr. C.Jeganathan
For Respondent : Mr. Na.Ga.Nataraj
Government Advocate
https://www.mhc.tn.gov.in/judis
1/8
W.P. (MD) No. 630 of 2023
ORDER
Heard Mr. C.Jeganathan, Learned Counsel for the Petitioner and
Mr. Na.Ga.Nataraj, Learned Government Advocate, who takes notice for the
Respondent, and perused the materials placed on record, apart from the
pleadings of the parties.
2. The Writ Petition challenges the pre-assessment notice dated 30.12.2022
issued by the Respondent, which is evidently a notice calling for objections, if
any, from the Petitioner for the proposal to levy tax under the Tamil Nadu
Value Added Tax Act, 2007 (hereinafter referred to as 'the TNVAT Act' for
short).
3. It is the case of the Petitioner that in view of the doctrine of mutuality,
the supply of liquor to the members of its club would not amount to a
transaction of sale of goods from one person to another attracting taxation
under the TNVAT Act, placing reliance on the decision of the Hon'ble Supreme
Court of India in State of West Bengal -vs- Calcutta Club [(2019) 19 SCC
107], where it has been held as follows:-
https://www.mhc.tn.gov.in/judis
W.P. (MD) No. 630 of 2023
“52.1 The doctrine of mutuality continues to be applicable to
incorporated and unincorporated members' clubs after the 46th
Amendment adding Article 366(29-A) to the Constitution of India.
52.2 CTO -vs- Young Men's Indian Assn. [(1970) 1 SCC 462]
and other judgments which applied this doctrine continue to hold
the field even after the 46th Amendment.
52.3 Sub-clause (f) of Article 366(29-A) has no application to
members' clubs.”
4. The consistent legal position has been reiterated by the Hon’ble Supreme
Court of India in Union of India -vs- Kunisetty Satyanarayana [(2006) 12
SCC 28] that a charge memo or show cause notice cannot be challenged before
the completion of enquiry and the proceedings cannot be interdicted till it
reaches its logical conclusion. It would be useful here to extract the relevant
passages from the said decision which read as follows:-
“13. It is well settled by a series of decisions of this Court that
ordinarily no writ lies against a charge sheet or show-cause
notice vide Executive Engineer, Bihar State Housing Board -vs-
Ramdesh Kumar Singh [JT 1995 (8) SC 331], Special Director -
vs- Mohd. Ghulam Ghouse (AIR 2004 SC 1467), Ulagappa -vs-
https://www.mhc.tn.gov.in/judis
W.P. (MD) No. 630 of 2023
Divisional Commissioner, Mysore [2001(10) SCC 639[, State of
U.P. -vs- Brahm Datt Sharma (AIR 1987 SC 943) etc.
14. The reason why ordinarily a writ petition should not be
entertained against a mere show-cause notice or charge-sheet is
that at that stage the writ petition may be held to be premature. A
mere charge-sheet or show-cause notice does not give rise to any
cause of action, because it does not amount to an adverse order
which affects the rights of any party unless the same has been
issued by a person having no jurisdiction to do so. It is quite
possible that after considering the reply to the show-cause notice
or after holding an enquiry the authority concerned may drop the
proceedings and/or hold that the charges are not established. It is
well settled that a writ lies when some right of any party is
infringed. A mere show-cause notice or charge-sheet does not
infringe the right of any one. It is only when a final order
imposing some punishment or otherwise adversely affecting a
party is passed, that the said party can be said to have any
grievance.
https://www.mhc.tn.gov.in/judis
W.P. (MD) No. 630 of 2023
15. Writ jurisdiction is discretionary jurisdiction and hence
such discretion under Article 226 should not ordinarily be
exercised by quashing a show-cause notice or charge sheet.
16. No doubt, in some very rare and exceptional cases the High
Court can quash a charge-sheet or show-cause notice if it is
found to be wholly without jurisdiction or for some other reason if
it is wholly illegal. However, ordinarily the High Court should
not interfere in such a matter.”
Having due regard to the aforesaid legal position, as there is nothing which
precludes the Petitioner from raising the contentions in this Writ Petition in the
reply to be submitted to the Respondent, who is bound to deal with the same
before coming to any ultimate conclusion, there is no necessity for the Court to
interfere at this pre-mature stage of the matter.
6. In such circumstances, without expressing any view on the merits of the
controversy involved in the matter, the Writ Petition is disposed on the
following terms:-
https://www.mhc.tn.gov.in/judis
W.P. (MD) No. 630 of 2023
(i) it shall be incumbent upon the Petitioner to submit its explanation to the
show cause notice, which is impugned in the Writ Petition, if not done
already, to the concerned authority by 28.02.2023;
(ii) in the event of not being satisfied with the explanation submitted by the
Petitioner, an enquiry shall be conducted following the prescribed
procedure after affording full opportunity of personal hearing to the
Petitioner to explain its position in that regard and a reasoned order shall
be passed dealing with each of the contentions raised on merits and in
accordance with law and the decision taken communicated under written
acknowledgment;
(iii) if any adverse decision is taken, the Petitioner may pursue legal remedies
in accordance with law;
(iv) consequently, the connected Miscellaneous Petition is closed; and
(v) there shall be no order as to costs.
10.01.2023
Sm
NCC: Yes/No
Index: Yes/No
Note: Issue order copy by 23.01.2023
https://www.mhc.tn.gov.in/judis
W.P. (MD) No. 630 of 2023
To
The State Tax Officer,
Kuzhithurai,
Kanniyakumari District.
Copy to
Tvl.Diana Manamagil Mandram,
No.18/20A1, Thakkalai Road,
Karungal,
Kanniyakumari District,
Rep. by its Secretary,
T.Chandra Sekar.
https://www.mhc.tn.gov.in/judis
W.P. (MD) No. 630 of 2023
P.D. AUDIKESAVALU, J.
Sm
W.P. (MD) No. 630 of 2023
10.01.2023
https://www.mhc.tn.gov.in/judis
