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TMI Blog1988 (10) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... interested in the trade in the various matters connected with the hotel industry and tourism with a view to place the hotel industry on a purposeful role in relation to the welfare of the public and to serve a useful purpose in society. (b) To take steps to sponsor, to create public opinion in favour of or against proposed legislative enactments consistent with trade conditions, business needs and public welfare. (c) To arrange supply of proper raw materials of quality for preparation of quality articles of food for supply to the members of the public at a cheap and uniform price, to arrange for procurement of raw materials through the Marketing Officers to the Government and co-operate with them and other authorities both public and private engaged in this direction and diffuse useful information and knowledge to the members in this respect. The members of the petitioner-Association, carry on the business of running hotels and restaurants within the State of Tamil Nadu. The members of the petitioner-Association were originally registered under the provisions of the Tamil Nadu General Sales Tax Act as "dealers" and were submitting regular returns of their turnover and were b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders dated 27th April, 1981 in G.O. Ms. Nos. 436 and 437 of 1981. The said Government Orders were issued by the Governor of Tamil Nadu in exercise of the powers conferred on him under section 17 of the Act. Under the first of the aforesaid Government Orders, the Government made it clear that with a view to give relief to hotels and restaurants which cater to the needs of the common man, the Government had exempted hotels with effect from 6th October, 1980 supplying food and drink to the public from liability to sales tax. It was further clarified that hotels which had not collected sales tax in respect of supply of food and drink were exempt from sales tax from 7th September, 1978 onwards. Thus the tax due in respect of the supply of food and drinks in hotels in the State of Tamil Nadu was waived by the Government from 7th September, 1978 onwards under the aforesaid two notifications. Further, by a Notification G.O. No. 1001 dated 6th October, 1980, issued by the first respondent, in exercise of the powers conferred under section 17 of the Act, exempted hotels from the liability to sales tax in respect of supply of food and drink for the period commencing from 6th October, 1980. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the members of the petitioner-Association are not liable to tax in respect of the value of the food and drink supplied nor in respect of the purchases under section 7-A in view of the decision of the Supreme Court aforesaid. It is only in pursuance of the decision of the Supreme Court that the first respondent waived the tax already levied on the petitioner irrespective of whether such levy had been challenged in appeal or not. By virtue of the original Government Order issued by the first respondent in G.O. Ms. Nos. 436 and 437 which was followed in later Government Orders, the members of the petitioner-Association carrying on the business of hotels and restaurants and effecting supplies of food and drink to the public are not liable to pay sales tax. The later G.O. Ms. No. 1187 dated 22nd October, 1982 restricting the scope of the earlier G.Os., in respect of the years are, therefore, without jurisdiction and cannot be invoked to deny the benefit of the waiver already granted under the earlier G.Os. In so far as the earlier G.Os., clearly holding that the tax would not be recovered without imposing any condition thereof, the first respondent erred in imposing additional cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he taxes have been waived a liability would be created for the payment of the said tax. It is further contended that the petitioner bona fide relied on the G.O. dated 27th April, 1981 and accordingly had not claimed the sales tax as a liability for the purpose of income-tax on the basis of waiver. The first respondent thus having made the petitioner rely on the said notification and not claimed the sales tax as a deduction in the income-tax assessments is now estopped from unilaterally changing the position and making the sales tax payable thus putting the members of the petitionerAssociation to double jeopardy. The first respondent is estopped under the principle of promissory estoppel from claiming the sales tax on the basis of the subsequent G.O. dated 22nd October, 1982 in supersession of the earlier G.O. dated 27th April, 1981. It is also contended by Mr. Ramachandran, learned counsel for the petitioner, that the said G.O. has been issued in pursuance of the Supreme Court decision, that under the aforesaid decision of the Supreme Court, the respondents cannot claim to assess the transactions of the petitioner and that therefore the attempt of the first respondent to seek t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m to onerous responsibilities under the provisions of the Act. In so far as there are a large number of members who face this harassment of being forced to pay the tax which has been waived and have been asked to register themselves are in law not bound to do so, the petitioner which is a registered society has sought to file the present writ petition in its representative capacity. Under these circumstances, the petitioner submits that G.O. Ms. No. 1187 dated 22nd October, 1982 is liable to be struck down in so far as it imposes additional conditions in respect of the waiver of sales tax as contemplated in G.O. Ms. Nos. 436 and 437 dated 27th April, 1981. In the counter-affidavit filed on behalf of the respondents, sworn to by the Deputy Commissioner (Legal) in the Office of the Commissioner of Commercial Taxes, Madras-5, it is, inter alia, contended thus: The contention raised on behalf of the petitioner that all the members of the petitioner-Association are not liable to tax, is not acceptable, since the dominant object of the running of the hotel has to be assessed in each and every case separately. There is no blanket ban or bar in assessing hotels in view of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in regard to this subject. So it is submitted on behalf of the respondents that the G.O. Ms. No. 1187 dated 22nd October, 1982 is valid and it does not deserve to be struck down. An objection was raised on behalf of the respondents by Mr. R. Lokapriya, that the petitioner herein is not a dealer and as such the President of the Tamil Nadu Hotels Association, Madras, cannot file the writ petition and as such this writ petition is not maintainable. He further submits that it is only the dealers who are competent to file a writ petition with respect to the prayer made in the writ petition. Mr. V. Ramachandran, learned counsel for the petitioner relied on the decision in AIR 1981 SC 298 at page 317 (Akhil Bharatiya Soshit Karamchari Sangh (Railway) v. Union of India), AIR 1981 SC 344 (Fertilizer Corporation Kamagar Union (Regd.), Sindri v. Union of India), AIR 1982 SC 149 (Gupta v. President of India) and [1985] 153 ITR 172 (Mad.) (Coimbatore Club v. Wealth-tax Officer) for his contention that the petitioner can file a writ petition in his representative capacity as the President of the Tamil Nadu Hotels Association, the members of which are only hotel owners. Mr. Loka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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