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TMI Blog2021 (4) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government but also on the restaurant attached to such star hotel. The expression attach has been defined in Black's Law Dictionary as to annex, bind or fasten. If something is part of another, it is said to be attached (Oxford Advanced Learner's Dictionary, New 9th Edition). Attached to connotes something different from mere ownership - If the petitioner has been carrying on its business at a place distinct from that of the Star Hotel, then, Section 7(1)(a) of the Act cannot be invoked at all. But the petitioner restaurant is in the very same building owned by the Star Hotel, namely, Rathna Residency. Therefore, the assessing authority was justified in holding that the petitioner is a restaurant attached to a Star Hotel and therefore would fall within the sweep of Section 7(1)(a) of the Act. The respondent is not justified in levying interest from the original assessment year - the star hotel itself was selling the items mentioned in Section 7(1)(a) of the Act. But in the case on hand, Rathna Residency is not the petitioner before this Court. It is only Rainbow Restaurant that is the petitioner before this Court. Rainbow Restaurant is contending that it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue Added Tax Act, 2006, while it should have paid at higher rate under 7(1)(a) of the Act. According to the petitioner's counsel, the petitioner would come under Section 7(1)(a), only if it is a star restaurant by itself. In the case on hand, it is only Rathna Residency that was recognized as a star hotel and the petitioner at no point of time was recognized as star hotel. Therefore, the respondent erred in treating the petitioner as a star restaurant and bringing the petitioner under the purview of Section 7(1)(a) of the Act. (b) His second contention is that the higher rate of tax prescribed in Section 7(1)(a) of the Act can be levied only on the items mentioned in the said provision ie., food articles, non alcoholic drinks and beverages. In the case on hand, the assessing officer had levied the higher rate tax on the entire turn over of the petitioner. This was clearly wrong and suffers from non-application of mind. (c) The respondent is a quasi judicial authority and he ought to have independently decided the issue. Instead the respondent had chosen to go by what transpired during the inspection conducted by the Enforcement Wing Officials. According to the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or catered indoors or outdoors by hotels, restaurants, sweets-talls, clubs, caterers and any other eating houses, at the rate of 4[five] per cent of the taxable turnover. Explanation I.- For the purpose of computing the total turnover under this sub-section, the purchase turnover liable to tax under section 12 of this Act, shall be added to the sales turnover. Explanation II.- For the purpose of computing the total turnover under this sub-section, the sales turnover of all business units in a common premises sharing the common kitchen or common employees shall be added to the sales turnover of the business unit having higher turnover. (2) The dealer, who pays tax under clause (a) of sub-section (1) shall be entitled to input tax credit on the goods specified in the First Schedule purchased by him in the State. 8.Section 7(1)(a) of the Act will apply on sale of the items mentioned therein, if they have been served in or catered indoors or outdoors by star hotels recognized as such by Tourism Department of the State Government or Government of India and restaurants attached to such hotels. The assessing officer would point out that Rathna Residency is ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on the sale of ready to eat un-branded foods including sweets, savouries, un-branded non-alcoholic drinks and beverages served in or catered indoors or outdoors by hotels, restaurants, sweet-stalls, clubs, caterers and any other eating houses, at the rate of 4[five] per cent of the taxable turnover. Explanation I.- For the purpose of computing the total turnover under this sub-section, the purchase turnover liable to tax under section 12 of this Act, shall be added to the sales turnover. Explanation II.- For the purpose of computing the total turnover under this sub-section, the sales turnover of all business units in a common premises sharing the common kitchen or common employees shall be added to the sales turnover of the business unit having higher turnover. (2) The dealer, who pays tax under clause (a) of sub-section (1) shall be entitled to input tax credit on the goods specified in the First Schedule purchased by him in the State. As per section 7(1)(a), sale of ready to eat unbranded foods including sweets, savouries, unbranded non-alcoholic drinks and beverages served in or catered indoors or outdoors by star hotels recognized as such by Tour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not classified as a star hotel. 10.The assessing officer would point out that in the said advance ruling, the entity in question was running its business at a place away from the star hotel and it remained as a separate premise at Panaiyur. In the case on hand, Rainbow Restaurant is not being run at any separate premises; it is being run in the very same premises as that of Rathna Residency. On the said ground, the assessing officer would seek to distinguish the order dated 08.06.2018 made in W.P.Nos.26512 to 26514 of 2014 (M/s.Sakthi Hotels (Restaurant) Vs. The Commercial Tax Officer, Pollachi (West), Coimbatore District). In the said case also, the restaurant in question was carrying on its business at a place that was distinct. I concur with the said submission advanced by the assessing officer. Since Rainbow Restaurant is carrying on its business in the very same premises, the assessing authority rightly held that it is a restaurant attached to a star hotel and therefore, Section 7(1)(a) of the Act will apply. Section 7(1)(a) of the Act states that the higher rate of tax will be levied not only on the star hotel recognized by the Government but also on the restauran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not liable to pay tax at a higher rate. Therefore, as per Section 42 of the Act, only from the date on which the petitioner's liability is quantified, the question of paying tax would arise. 13.That apart as rightly pointed out by the learned counsel for the petitioner, the respondent appears to have been totally swayed by the report of the Enforcement Wing Officials. The respondent appears to have forgotten that the respondent is an independent quasi judicial authority. The learned counsel for the petitioner draws my attention to the order dated 02.03.2007 made in W.P.Nos.7784 and 7785 of 2007 (M/s.Amutha Metals Vs. The Commercial Tax Officer, Mannady (East) Assessment Circle, Chennai). While allowing the said writ petition, a learned Judge of this Court held as follows:- If the reasoning stated by the enforcement officials is taken as correct reason, there is no need for the assessing officer to be there to frame the assessment. The Enforcement Wing officials themselves would have framed the assessment. Under the statutory provisions, it is expected from the assessing officer to consider the objections and either accept or reject the same by giving valid rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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