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TMI Blog2022 (12) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... f Part-C of the I Schedule, was required to pay tax at the rate specified in Part-A of the IX Schedule. The petitioner is liable to pay tax only on foods and drinks in terms of Entry in Sl.No.20 of Part-C of the Fist Schedule to the TNGST Act, 1959 at 8%. Entry in Sl.No.20 of Part-C of the Fist Schedule to the TNGST Act, 1959 does not include goods specified elsewhere in the other Schedules as is evident from a reading of Entry in Sl.No.20 in Part- C of the Fist Schedule to the TNGST Act, 1959 as the expression used is other than those falling elsewhere under the Schedule . Therefore, if alcoholic liquor is liable to tax in any other Schedules, then the turnover of alcoholic liquor cannot be included in the turnover of food and drinks at 8% in terms of Entry in Sl.No.20 of Part-C of the First Schedule to the TNGST Act, 1959. The facts on record do not reveal that the petitioner has paid tax on alcoholic liquors sold in its return at 30% for the period between 17.07.1996 and 26.03.1998, at 40% for the period between 27.03.1998 and 11.11.1999 and at 50% for the period between 12.11.1999 and 31.11.2001 as specified in the Sixth Schedule to the TNGST Act, 1959 - Prima facie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner dated 29.10.2003 allowing the appeals of the petitioner. By the impugned common order dated 06.03.2006, the second respondent Tribunal has passed the following orders:- Table No.1 W.P.No. A.Y. C.T.S.A.No Remarks 39536/2006 1997-1998 161/2004 Allowed 39537/2006 1998-1999 171/2004 Allowed - 2000-2001 162/2004 Dismissed 4. By the impugned common order dated 06.03.2006, the second respondent Tribunal had accepted the case of the respondent and ordered inclusion of the turnover of liquor sold in the petitioner's hotel while computing taxable turnover for the purpose of Section 3-D of the Tamil Nadu General Sales Tax Act, 1959 [hereinafter referred to as TNGST Act, 1959 ]. The operative portion of the impugned common order dated 06.03.2006 of the second respondent Tribunal reads as under:- 7. We have considered the arguments of the both the sides and also verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of assessment made by the Assessing Authority for the years 1997-98 nand 1998-99. 9. As for the assessment year 2000-01, the respondents had contended that the liability to tax under section 3D of the Act arise only on the taxable sale of Food and Drinks and that the other turnover are not to be included, the claim was not admitted by the Assessing Authority and the assessment made on the disputed turnover. The first appellate authority however, had contended the claim of the respondents. The appellant seeks for restoration of assessment stating that the order of the Assessing Authority was legally correct. But the stand taken by the appellant is found to be not correct. 10. Section 3-D was substituted with effect from 1.4.99 by Act 28/99 and the substituted section reads as follows:- Section 3-D - Payment of tax by hotels, restaurants and sweet stalls. (1) Notwithstanding anything contained in subsection (1) of Section 3, every dealer whose total turnover is not less than twenty five lakhs of rupees for the year on the first point of sale of food and drinks in hotels, restaurants, sweet stalls and any other eating houses other than those falling under ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore proceed to examine the issue. 8. Section 3-D of the TNGST Act as it stood during the relevant period reads as under:- Section 3-D. Payment of tax by hotels, restaurants and sweet stalls.- (1) Notwithstanding anything contained in sub-section (1) of section 3, every dealer whose total turnover is not less than twenty five lakhs of rupees for the year on the sale of food and drinks in hotels, restaurants, sweet stalls and any other eating houses other than those falling under item 20 of Part-C of the First Schedule, shall pay tax at the rate specified in Part-A of the Ninth Schedule. (2) A dealer liable to pay tax under subsection (1) shall not collect any amount by way of tax or purporting to be way of tax on the sale of food and drinks. 9. The specific case of the petitioner in these Writ Petitions is that there is no case made out for clubbing the turnover of alcoholic liquor sold from the licenced bar of the petitioner. It is submitted that the sales turnover of alcoholic liquor sold from the bar attached to the petitioner's hotel, for which, the petitioner was given a bar licence under the provisions of the Tamil Nadu Prohibition Act, 1937 read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hotel Ranjith Vs. Commercial Tax Officer, Valluvarkottam Assessment Circle, Chennai , [2001] 124 STC 571. 15. It is submitted that though the aforesaid decision was passed in the context of validity of Section 3-D / 3-E(1) and Part A or Part B of the IX Schedule to the TNGST Act, 1959, the Tamil Nadu Taxation Special Tribunal has categorically held that the taxable turnover for the purpose of Additional Sales Tax Act is taken as the turnover assessed under Section 3-D of the TNGST Act, 1959. 16. It is further submitted that the Tamil Nadu Taxation Special Tribunal has rejected the arguments advanced by the petitioner therein with the following observations:- 12. The arguments based on the levy of tax being on the total turnover has to be rejected because the total turnover will not include export sales, import sales and inter-State sales as assumed by the petitioner. In Kannan Company v. State of Tamil Nadu [1975] 36 STC 300, the Madras High Court has held that the total turnover will not include the inter-State sale and this is being adopted by the Government. The second argument that the total turnover for the purpose of Section 3-D or Section 3-E takes into acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in C.T.S.A.No.162/2004 for the Assessment Year 2000-2001 which was dismissed by the second respondent Tribunal. Actually, the petitioner should have filed Writ Petition against the order passed by the second respondent Tribunal in C.T.S.A.No.171/2004 for the Assessment Year 1998-1999 along with Writ Petition in W.P.No.39536 of 2006 against the order passed in C.T.S.A.No.161/04 for the Assessment Year 1997-1998. 21. Be that as it may, we proceed to examine the issue in the light of the rate of tax under the First and Sixth Schedules to the TNGST Act, 1959. Section 3-D was inserted by Act 39/97 published in Gazette dated 19.05.1997 with effect from 01.04.1997. 22. A reading of Section 3-D of the TNGST Act, 1959 as it stood during the period in dispute makes it clear that it is an exception to Section 3(1) of the TNGST Act, 1959. As per Sub-Section (1) to Section 3-D of the TNGST Act, 1959, every dealer whose whose total turnover is not less than Rs.25,00,000/- for the year on the sale of food and drinks in Hotels, Restaurants, Sweet Stalls and any other eating houses other than those falling under item 20 of Part-C of the I Schedule, was required to pay tax at the rate spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Star hotels recognised as such by the Tourism department of the State Government or the Government of India and ii. Restaurants attached to such star hotels 28. As far as taxability of alcoholic liquors for human consumption of all kinds which are purchased / procured / brought from the outside the State of Tamil Nadu and foreign liquors is concerned, the levy of tax is under Section 3(2) of the TNGST Act, 1959. Section 3(2) is to be read in conjunction with Section 3(1) of the Act. Sections 3(1) and 3(2) as it stood then read as under:- Table No.3 Section 3(1) of the TNGST Act Section 3(2) of the TNGST Act Levy of taxes on sales or purchase of goods (1) Every dealer (other than a casual trader or agent of a nonresident dealer) whose total turnover for a year exceeds three lakhs of rupees and every casual trade or agent of a non-resident dealer, whatever be this turnover for the year, shall pay a tax for each year in accordance with provisions of the this Act. (2) Subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Tamil Nadu (other than foreign liquors falling under item 1 of Part-K, toddy and arrack) Item No.1 - All kinds of foreign liquors , that is to say, wines, spirits and beer imported into India from foreign countries and dealt with under the Indian Tariff Act, 1934 (Central Act XXXII of 1934) or under any other law for the time being in force relating to the duties of customs on goods imported into India. Note : However, the above entries were omitted by G.O.Ms.No.234, CT, dated 12.11.1999 with effect from 12.11.1999. 30. During the corresponding period, the sale of all kinds of alcoholic liquors for human consumption, other than one mentioned in the above Table, point of levy was both at the first and second sale in terms of the Sixth Schedule to the TNGST Act, 1959. Sixth Schedule to the TNGST Act, 1959 as it stood then reads as under:- Table No.5 Sixth Schedule [See Section 3(2-B)] Period Sl. No. Description of goods Point of levy Rate of tax (per cent) 12.03.1993 to 26.03.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es turnover of food and drinks under Section 3-D of the TNGST Act, 1959 read with Entry in Sl.No.20 in Part-C of the Fist Schedule to the TNGST Act, 1959. Alcoholic liquors specified in Part I J and in Part J K of the First Schedule to the TNGST Act, 1959 during the respective period were liable to be taxed only at the first point of sale. They cannot be taxed again. 34. However, for sale of alcoholic liquors purchased within the State, the petitioner would have been liable to pay tax at 30% between 17.07.1996 to 26.03.1998 and for the period starting from 27.03.1998 ending with 11.11.1999, the petitioner would have been liable to pay tax at 40% and thereafter, between 12.11.1999 and 31.11.2001, at 50% under the Sixth Schedule to the TNGST Act, 1959. In other words, if the petitioner had sold alcoholic liquor manufactured in the State, the petitioner would have been liable to tax on the second sale effected from its bar attached to its restaurant independently. 35. The facts on record do not reveal that the petitioner has paid tax on alcoholic liquors sold in its return at 30% for the period between 17.07.1996 and 26.03.1998, at 40% for the period between 27.03.1998 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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