2020 (4) TMI 136 - HC - VAT and Sales Tax

Vires of definition of dealer - validity of Section 2(15)(ix) and explanation 1 of Section 2 (33(vi)) of Tamil Nadu Value Added Tax Act 2006 - According to the petitioner, the club does not fall within the definition of dealer under Section 2(15)(ix) of the TNVAT 2006, as there is no sale of any goods in the form of food, refreshments and drinks by the petitioner to its members - HELD THAT - By the virtue of the powers conferred under Article 246A, the Parliament brought in the Central Goods and Service Tax Act, 2017 and the Integrated Goods and Services Tax Act,2017. By the introduction of the Central Goods and Service Tax Act, 2017 and the Integrated Goods and Services Tax Act,2017, the Tamil Nadu Value Added Tax 2006, has been repealed. Section 174 of the Central Goods and Service Tax Act, is the repeal and saving clause - Mere apprehension of the petitioner does not persuade us to go into vires of the Section 2(15)(ix) and explanation 1 of Section 2 (33(vi), of Tamil Nadu Value Added Tax Act, 2006, which stands repealed. This exercise at this juncture would be only academic in nature. If and when action is taken against the petitioner, it is also open to the petitioner to take appropriate steps in accordance with law. Petition dismissed.

Summary

Issues:
Challenge to definition of dealer under TNVAT Act 2006 for a registered club under Societies Registration Act.

Analysis:
The petitioner, a registered club under the Societies Registration Act, challenged the definition of "dealer" under Section 2(15)(ix) and explanation 1 of Section 2(33)(vi) of the Tamil Nadu Value Added Tax Act 2006. The petitioner argued that as a club providing services, it does not fall within the definition of a dealer as there is no sale of goods to its members. The club's primary activities include organizing games, providing refreshments, and serving liquor with a valid license from the Commissioner of Prohibition & Excise Department.

The Commissioner of Prohibition & Excise Department granted a license to the club for serving liquor, which led to the petitioner's apprehension of facing proceedings under the TNVAT Act. The petitioner contended that the introduction of Article 246A by the Constitution (One Hundred and First Amendment) Act, 2016, empowered Parliament to enact laws related to goods and services tax, resulting in the repeal of the TNVAT Act 2006 by the Central Goods and Service Tax Act, 2017.

The court noted that the TNVAT Act 2006 had been repealed and replaced by the Central Goods and Service Tax Act, 2017. The court declined to examine the validity of the TNVAT Act provisions as the repeal had already taken place. The court stated that any challenge to the previous law would be academic, and the petitioner could take appropriate legal steps if faced with any action under the new legislation. Consequently, the writ petition was dismissed with no costs, and connected miscellaneous petitions were closed.