HOTEL BLUE NILE Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THE writ petition is for the issue of a writ of mandamus directing the respondents 2 and 3 to refund the amount of Rs. 37, 577 compulsorily collected by cheque No. 440192, dated September 3, 1992 drawn on Indian Bank, Teynampet Branch, and cash of Rs. 1, 000 compulsorily collected towards compounding fee on September 3, 1992.

(2.) THE petitioner, an assessee on the file of the Commercial Tax officer, Tambaram I Assessment Circle, has been assessed to sales tax under the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981, for the years 1988-89, 1989-90 and 1990-91. As per G.O.Ms. No. 111, dated March 6, 1982, the minimum turnover was fixed as Rs. 3, 00, 000 instead of Rs. 18, 00, 000 and 25 thousand per annum, for the purpose of taxation. It appears that the petitioner has submitted an application for classification as star hotel in 1989 and the same is pending with the respondents, In the meanwhile the petitioner had effected catering service ever since 1989, but the total and taxable turnover never reached the taxable minimum and hence the petitioner had not filed any return and paid any sales tax. THE effecting of catering service in the petitioner-hotel, cannot be held to be sales in accordance with the provisions of section2(n) of the Tamil Nadu General Sales Tax Act, 1959. While so, the petitioner's hotel premises was inspected on September 3, 1992 by the 2nd respondent and held that the petitioner had committed an offence of failure to maintain true and complete accounts for the year 1992-93 and found that no accounts were maintained in the business premises and the petitioner had not submitted monthly returns and paid the sales tax due. On the basis of the inspection conducted by the 2nd respondent, a compounding notice dated September 3, 1992 and a compounding order dated September 3, 1992 were issued to the petitioner insisting on the payment of Rs. 37, 577 by cheque and Rs. 1, 000 by cash. According to the petitioner, no proper opportunity was given to the petitioner to put forth his case and the collection of Rs. 37, 577 by the cheque and Rs. 1, 000 by cash is without authority of law and against the principles of natural justice. As against the said demand and collection, the petitioner made a representation on September 4, 1992, to the higher authorities. When the matter stood thus, the petitioner has filed the above writ petition with the said prayer.

(3.) IN this case, the tax liability of the petitioner has not yet been decided at all. With regard to the tax liability on the sale of food and drinks in restaurants, the matter is still pending in the Apex Court. IN such circumstances, the action of the 2nd respondent has to be condemned and it seems the attitude on the part of the 2nd respondent in this case is over-enthusiastic and to reach the target fixed by the department. This sort of attitude should be condemned and the Commissioner of Commercial Taxes should see that his subordinate officers are not indulging in such practice under the guise of collecting sales tax. Therefore I direct the respondents to refund the sum of Rs. 1, 000 collected from the petitioner as compounding fee and Rs. 37, 577 by way of cheque towards tax, on production of a copy of this order forthwith. It is open to them to take any proceeding according to law. I do hope that the officers of the respondents will behave better at least in future and therefore I am not awarding any costs in this case. The writ petition is ordered accordingly. No costs.