9911796707
TMI Blog2022 (12) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, facts are being taken up from W.P.No.4303 of 2008 and the parties are referred to by their original nomenclature as found in these petitions. 3. It was submitted by the Petitioner / Hotelier that they are into hotel business for several years and for the assessment year 1995-1996, a total taxable sales turnover of Rs.52,39,203/- and Rs.12,064/- by way of returns in Form A1 was shown in respect of Tirupur Sree Annapoorna Hotel and Sree Annapoorna Sweets as per Section 3(1) of the TNGST Act, 1959. However, the 3rd Respondent had rejected such calculation on the ground that the Registration Certificate, which was applied for Sri Annapoorna Sweets, a sister concern of Tirupur Sree Annapoorna Hotel was not accepted for registration and therefore, the 3rd Respondent reworked the taxable income and determined as Rs.66,60,363/- and Rs.14,35,123/- respectively towards the turnover for the year. 3.1. It was further submitted that aggrieved by the assessment of the 3rd Respondent, the Petitioner preferred an appeal under Section 31 of the TNGST Act, 1959 before the 2nd Respondent in A.P.No.362 of 1999 and in the grounds of appeal of the petitioner, it was stated thus: i) the 3rd Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue filed an appeal before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore / 1st Respondent herein. The Appellate Tribunal, without appreciating the materials placed before it and on the basis of mere surmises and conjecturs, passed an order in Coimbatore Tribunal Appeal No.127/2002 dated 31.10.2006, thereby restoring the order of the Assessing Authority. The order of the 1st respondent was assailed on the same grounds raised before the 2nd Respondent by the Writ Petitioner and on the following additional grounds: i) that functioning of another firm in the same premises is not a criterion for refusal to treat as a separate unit and there was no discussion on the observation made by the 2nd Respondent with regard to the rejection of application dated 16.05.1991 and 25.01.1999, wherein it was recorded that the partner of Sri Annapoorna Sweets had claimed to have maintained separate accounts and she had requested to assess the above firm separately and to issue Registration Certificate; ii) that the observation of the 1st Respondent that the Hotel including the sweet stall can be considered as a single entity only when exemption was granted by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the 1st Respondent has lost sight of the fact that there was a separate books of accounts being maintained in the name of Sri Annapoorna Sweet Stall and hence, the observation made by the 1st Respondent that a fictitious firm was created in order to evade payment of taxes has no legs to stand. When the petitioner had agreed for clubbing of the turnover of Sri Annapoorna Sweet Stall for the assessment year 1997- 1998, it was highly ridiculous on the part of the Assessing Authority to demand such clubbing of turnover from 1992-1993 itself. It was also vehemently argued that no clinching materials were produced on the side of the 3rd respondent to establish that both Tirupur Sree Annapoorna Hotel and Sree Annapoorna Sweets are one and the same and mere citing of revenue loss without supporting documents cannot be accepted in general. 9. Learned Government Advocate appearing for R2 and R3 has strenuously contended that the 1st Respondent / Tribunal rightly came to the conclusion that Tirupur Sree Annapoorna Hotel and Sree Annapoorna Sweets are single entity on the reasoning that both firms are situated in the same premises and there cannot be two different rents for the same premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the petitioner, the total sales turnover for Tirupur Sree Annapoorna comes to Rs.52,39,203/- and Rs.12,064/- by way of returns in Form A1. The said turnover and return was disputed by the Assessing Authority, stating that there were no documents produced to justify that both Tirupur Sree Annapoorna Hotel and Sree Annapoorna Sweets are unassociated establishment, having no interconnection with the business activities of each other and therefore, determined the total and taxable turnover for the year 1992-1993 at Rs.58,81,948/- and Rs.66,60,363/- for 1995-1996. 12. Let us at the first blush analize as to what do the words "Sister Concern" denote in general term? The exact definition for the words "Sister Concern" indicate that Sister Concerns are two or more contrasting organization under the ownership of the same owners / Corporates. The minimum requirement to treat it as a sister concern is that the activities of sister concerns must not have any connection with the operations of each other's business. To be more specific, except for their common owners, legally or financially, they are not related to each other. Though it is permitted to have close affiliations wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the legislature. 15. The petitioner drew our attention to the deeming provisions of the Tamil Nadu General Sales Tax Rules, 1959 to defend that the deeming provision will automatically come into operation, if there was no response on the certificate of registration within thirty days from the date of application. In the present case on hand, the application for grant of registration certificate was rejected by the Commercial Tax Officer, Tiruppur as early as on 25.01.1999 and thereafter, the petitioner had preferred an appeal before the Deputy Commissioner (CT), Coimbatore Division, in which, the rejection order was set aside and remanded to the Original Authority for fresh consideration. It is not known whether the petitioner has either questioned the said order or contested before the Original Authority as per the remand order. 16. The Assessing Authority, in support of his assessment by clubbing both units as one, had stated that based on the divulgence of the petitioner that Sree Annapoorna Sweet Stall got merged with Tirupur Sree Annapoorna Hotel with effect from 01.04.1997, common assessment was made by branding them as a single unit. Even prior to that, the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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