Partly allowed

M/S. Hotel President v. Commercial Tax Officer and Others

Kerala HC29 Jan 2019WP(C)/31226/2009

Case brief

AI extract

What is this about?

The Kerala High Court rejected a writ petition challenging Circular No.44/2006 regarding compounded tax on bar hotels. The court held that purchase price calculations must deduct closing stock. It directed fresh orders for pending demands to reflect this deduction but rejected the challenge to the circular.

What did the court decide?

Circular No.44/2006 rejected but challenge upheld; fresh orders issued for pending demands deducting closing stock.

M/S. Hotel President Vs Commercial Tax Officer and Others — GST and Indirect Tax | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

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THE HONOURABLE MR. JUSTICE ASHOK MENON

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TUESDAY ,THE 29TH DAY OF JANUARY 2019 / 9TH MAGHA, 1940

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WP(C).No. 31226 of 2009

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PETITIONER/S:

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M/S. HOTEL PRESIDENT ANGAMALI, REPRESENTED BY E.K. MARIAMMA, MANAGING PARTNER.

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BY ADVS. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ

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RESPONDENT/S:

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1 COMMERCIAL TAX OFFICER, ANGAMALI.

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2 STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM.

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3 INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, MATTANCHERY.

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4 THE COMMISSIONER OF COMMERCIAL TAXES THIRUVANANTHAPURAM.

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BY SRI. V.K.SHAMSUDDIN, SR.GOVERNMENT PLEADER

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.31226/2009

JUDGMENT

Vinod Chandran, J.

The challenge in the above Writ Petition is against Circular No.44/2006 dated 25.11.2006. As on 2005-06, the provision for payment of compounded tax, applicable to bar hotels specified two categories; those coming

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within a municipal corporation, under a municipal council or a cantonment and those situated outside such areas. For the bar hotels coming within the Municipal Corporation, compounded tax was at 140% of the purchase price of such liquor and those situated in other places, it was 135%. The circular provided that in computing the purchase price, the opening stock also has to be added. The provision at Section 7 specifically provided for turnover tax at the rate specified “on the turnover of foreign liquor calculated at the following percentage of purchase price of such liquor”. This indicates that the purchase price is of the liquor sold in that particular year. To compute the actual purchase price of the actual sale made, one

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W.P.(C) No.31226/2009

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has to take the opening stock, add the purchases for

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the said year and deduct the closing stock. The

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challenge against the circular cannot be upheld and hence is rejected. The learned Counsel for the

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petitioner then submits that there was no deduction of the closing stock. Definitely, when the purchase price

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of liquor sold in a particular year is computed, the

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closing stock in that year has to be deducted from the

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total of the opening stock and purchase of the particular year. Such exercise shall be done and fresh orders issued, if there is any pending demand. The

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Writ Petition would stand rejected, but however with the above observations. No order as to costs.

Sd/-

K.VINOD CHANDRAN

JUDGE

Sd/-

ASHOK MENON

JUDGE

dkr

W.P.(C) No.31226/2009

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1	COPY OF THE COMPOUNDING ORDER ACCEPTING THE OPTION FOR COMPOUNDING IN FORM NO.21 UNDER SECTION 7(1) OF THE KGST ACT DATED 29/02/2008.
EXHIBIT P2	COPY OF THE NOTICE DATED 25/04/2009 UNDER SECTION 19(1) OF THE KGST ACT ISSUED BY THE FIRST RESPONDENT.
EXHIBIT P3	COPY OF THE OBJECTION DATED 28/08/2009 FILED BY THE FIRST RESPONDENT.
EXHIBIT P4	COPY OF THE REVISED ORDER FOR 2005-06 DATED 29/08/2009.
EXHIBIT P5	COPY OF DEMAND NOTICE FOR 2005-06 DEMANDING TAX DATED NIL.
EXHIBIT P6	COPY OF THE DEMAND NOTICE FOR INTEREST DATED 29/08/2009 FOR 2005-06.
EXHIBIT P7	COPY OF THE CIRCULAR NO.44/2006 DATED

M/S. Hotel President v. Commercial Tax Officer and Others

Case brief

What is this about?

What did the court decide?

M/S. Hotel President v. Commercial Tax Officer and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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