2001 (9) TMI 1082 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Prematurity of the writ petition.
2. Availability of alternate remedy.
3. Definition and applicability of "business" under the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981.
4. Consistency in the application of the Act to different Devasthanams.

Summary:

1. Prematurity of the Writ Petition:
The learned single Judge dismissed the writ petition on the ground that it was premature. However, the High Court found that the assessment orders clearly indicated a final decision to impose tax and penalty, thus the writ was not premature.

2. Availability of Alternate Remedy:
The single Judge also dismissed the writ petition citing the availability of an alternate remedy u/s 10 of the Act. The High Court clarified that the dismissal on this ground should occur at the admission stage, not at the final disposal stage. The writ petitions were filed in 1991 and dismissed in 1998, making the alternate remedy argument inapplicable at this stage.

3. Definition and Applicability of "Business":
The appellant argued that it is a religious institution without profit-motive, thus not a "business" u/s 2(f) of the Act. The respondent contended that profit-motive is irrelevant for tax liability under the Act. The High Court noted that the term "business" is not defined in the Act and should not be interpreted using the definition from the Tamil Nadu General Sales Tax Act, 1959. The Supreme Court's definition of "business" requiring a profit-motive was applied, leading to the conclusion that the appellant's activities did not constitute a business.

4. Consistency in Application of the Act:
The appellant highlighted that similar Devasthanams like Rameswaram and Tiruttani were not subjected to the Act. The High Court criticized the respondent's inconsistent application of the Act and suggested a uniform policy. The court noted that the appellant's Devasthanam, being an ancient temple managed under the Hindu Religious and Charitable Endowments Act, 1959, should be treated similarly to other exempted Devasthanams.

Conclusion:
The High Court allowed the appeals, set aside the single Judge's order, quashed the assessment orders, and directed the respondent to forbear from invoking the provisions of the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981 against the appellant. Appeals allowed.