9911796707
TMI Blog2015 (12) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... der a statutory obligation without profit motive and the employer should subsidise at least 25% of the total expenses incurred in running the canteen. Whether the petitioner is coming under the category of a canteen run on co-operative basis or not? - Held that: - the Petitioner is an independent contractor and he is not running the canteen on cooperative basis. Therefore, the Petitioner is not entitled to claim exemption provided under the said notification dated 17.09.1964, as he did not satisfy the essential requirements laid down in the notification for claiming the benefit therefor. Since the Petitioner doing business has to produce the books of accounts, but the Petitioner did not maintain and produce the same, in the absence of original purchase bills, the Respondent assessed on the basis of the data available and passed the impugned order, the Petitioner is liable to pay tax. Relying upon the decision of the case of Industrial Catering Services P Limited Vs. Commercial Tax Officer, Chennai [2003 (3) TMI 675 - MADRAS HIGH COURT], penalty set aside. Petition disposed off - direction to the Respondents to re-examine the question of penalty - decided partly against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 31.05.2005, requesting to give one more week time for MFL to furnish the break-up details. On 13.06.2005, a peremptory letter was received, in response to which, the Petitioner requested that free issue sales may be taken as coupon sales and the MFL data was adequate to complete a proper assessment. However, the impugned assessment order dated 24.03.2006, calling upon the Petitioner to pay the purchase tax and penalty for the said assessment years. Hence, these Writ Petitions have been filed for the reliefs as stated above. 3. This Court, by order dated 21.6.2006 in the above miscellaneous petitions, granted an order of interim of stay on condition that the Petitioner shall deposit a sum of ₹ 30,00,000/- (Rupees Thirty Lakhs Only). Thereafter, the Respondent filed the above miscellaneous petitions to vacate the said interim order and also filed a common counter affidavit, contending as follows:- a. In and by the impugned orders, the Petitioner was directed to pay the purchase tax and penalty under Section 7-A of the Tamil Nadu General Sales Tax Act, 1959. Since, on verification, it was found that the dealer did not maintain any books of accounts, the taxable purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned orders, by contending that even as per the notification relied on by the Petitioner, the canteen was not run by the employer or on cooperative basis and run by an independent contractor, the Petitioner herein and hence, he is not entitled to be exempted from tax and penalty. 6. This Court heard and considered the submissions made by the learned counsel on either side and also perused the materials placed on record. 7. The admitted facts are that the Petitioner, as an independent contractor, is running a canteen on behalf of MFL, in the premises of MFL. After conducting inspection on 22.03.2003, the Respondent issued a notice dated 22.4.2004, proposing to levy purchase tax and penalty for the assessment years from 1997-98 to 2002-2003 and subsequently, the taxes were paid for MFL coupon receipts for the said assessment years. Thereafter, further notice dated 20.05.2004 was issued, to which the Petitioner filed objections, dated 30.05.2004 and a further reply dated 28.05.2004. On further notice dated 07.06.2004, the Petitioner produced all the documents. However, the Respondent , by letter by dated 18.01.2005, called upon MFL to give break-up data of coupon sales and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... canteen. ********** ********** 17. The notification issued by the State under the provisions of the Sales Tax Act has provided the exemption only for the sales effected in canteens 'run' by an employer or is run by the employees on a co-operative basis on behalf of the employer. These are the only two situations in which the benefit of the exemption can be claimed. The running of the canteen by an independent contractor, even though can be regarded as running of the canteen on behalf of the employer, would not meet the requirements of this notification as the running of the canteen on behalf of the employer would be relevant for the purposes of this notification, only if such running of the canteen is by the employees on a co-operative basis. The two situations contemplated under the notifications are, therefore, the running of the canteen by the employer directly or by the employees on a co-operative basis on behalf of the employer. 18. It is well settled that the benefit of the exemption notification is not to be extended unless the plain language employed in the notification reasonably requires its application to the situation which is brought before the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Act in the event of a dealer not filing a return, the levy of that penalty is discretionary and while exercising that discretion, the assessing officer is required to take note of the bona fides of the assessee. 14. The Division Bench in the above referred decision in 2003-132-STC-35 (Industrial Catering Services P Limited Vs. Commercial Tax Officer, Chennai), has further held as follows:- 28. So far as the imposition of penalty is concerned, though the penalty is leviable under the provisions of the Act in the event of a dealer not filing a return, the levy of that penalty is discretionary, and while exercising that discretion, the assessing officer is required to take note of the bona fides of the assessee. The assessing officer in this case, when he imposed the penalty, did not address himself to that factor. The appellate authority had set aside the levy of penalty while making the remand. As to whether the assessee should be subjected to a penalty should be examined afresh by the assessing officer having regard to the law laid down by this Court in the case of State of Madras vs. M/s. Fairmacs Trading Co. (35 (1975) S.T.C. 177) and other later decisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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