Madras High Court
The Kodaikanal Golf Club vs The Government Of Tamil Nadu on 5 July, 2021
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam, S.Ananthi
W.P.(MD).No.3080 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 05.07.2021
CORAM:
The Hon'ble Mr.JUSTICE T.S.SIVAGNANAM
AND
The Hon'ble Mrs.JUSTICE S.ANANTHI
W.P.(MD).No.3080 of 2021
The Kodaikanal Golf Club,
Represented by
G.S.Mani, Secretary,
Pambarpuram, Observatory P.O.,
Kodaikanal – 624 103,
Dindigul
District. ...Petitioner
Vs.
1. The Government of Tamil Nadu,
Rep. by its Principal Secretary,
Department of Commercial Taxes,
Fort St.George,
Chennai – 600 009.
2. The Commissioner of Commercial Taxes,
Commercial Taxes Department,
Ezhilagam, Chepauk,
Chennai – 600 005.
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W.P.(MD).No.3080 of 2021
3. The State Tax Officer,
Commercial Taxes Department,
Kodaikanal Assessment Circle,
Kodaikanal.
4. The Commissioner of
Prohibition and Excise Department,
Ezhilagam, Chennai. ....Respondents
PRAYER: Writ Petition is filed under Article 226 of the Constitution
of India, declaring that the definition in Sec.2(15)(ix) to Explanation I
and Sec.2(33)(vi) to Explanation I of Tamil Nadu Value Added Tax
Act, 2006 are void, unconstitutional, inoperative and unenforceable,
and the recoveries pursuant there to are without authority of law and
infringe Article 19(g) and 265 of the Constitution of India.
For Petitioner : Mr.P.M.Vishnuvarthanan
For Respondents : Mr.A.K.Manickam,
Standing Counsel for Govt.
For R1, R2 & R4.
Mr.R.S.Mohammed Mohideen,
For R3
ORDER
[Order of the Court was delivered by T.S.SIVAGNANAM,J.] The prayer sought for by the petitioner is that, to declare that the definition in Sec.2(15)(ix) to Explanation I and Sec.2(33)(vi) to 2/10 https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021 Explanation I of Tamil Nadu Value Added Tax Act, 2006 are void, unconstitutional, inoperative and unenforceable, and the recoveries pursuant there to are without authority of law and infringe Article 19(g) and 265 of the Constitution of India.
2. Heard the learned counsel for the petitioner and the learned counsel for the respondent.
3. An Identical issue was considered by the Hon'ble Supreme Court in the case of State of West Bengal and Others vs Calcutta Club Limited Civil Appeal No.4184 of 2009, etc., dated 03.10.2019, following which, a batch of cases was disposed of by this Court in W.P(MD).Nos.23012 & 23030 of 2019 etc., dated 01.11.2019.
4. The operative portion of the order reads as follows:
“3.These writ petitions have been filed with an identical prayer for a writ of declaration to declare the definition of Sec.2(15)(ix) to Explanation I and Sec.2(33)
(vi) to Explanation I of Tamil Nadu Value Added Tax Act, 3/10 https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021 2006, as null and void, unconstitutional, inoperative and unenforceable and the recoveries pursuant thereto are without authority of law and infringe Article 19(g) and 265 of the Constitution of India.
4.We need not go to decide the prayer sought for in the writ, as very recently the Hon'ble Supreme Court has settled the issue in the case of STATE OF WEST BENGAL & ORS. VS. CALCUTTA CLUB LIMITED, in Civil Appeal No.4184 of 2009, dated 03.10.2019. The issue before the Hon'ble Supreme Court was whether the judgment and order passed by the Division Bench of the Hon'ble Calcutta High Court affirming the view expressed by the West Bengal Taxation Tribunal and disposing of the appeal preferred by the dealer along with other connected appeals holding, inter alia, that the assessee, the Calcutta Club Limited, was not liable for payment of sales tax under the provision of the West Bengal Sales Tax Act, 1994. The Hon'ble Supreme Court by judgment dated 04.05.2016, referred the matter to the Larger Bench framing the following questions for consideration:
i.Whether the doctrine of mutuality is still application to incorporated clubs or any club after the 46th amendment to Article 366 (29A) of the Constitution of India?4/10
https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021 ii.Whether the judgment of this Court in Young Men's Indian Association (supra) still holds the field even after the 46th amendment of the Constitution of India; and whether the decisions in Cosmopolitan Club (supra) and Fateh Maidan Club (supra) which remitted the matter applying the doctrine of mutuality after the constitutional amendment can be treated to be stating the correct principle of law?
iii.Whether the 46th amendment to the Constitution by deeming fiction provides that provision of food and beverages by the incorporated clubs to its permanent members constitute sale thereby holding the same to be liable to sales tax?”
5.Subsequently, the matter was placed before the Larger Bench of the Hon'ble Supreme Court, by judgment, which by order dated 03.10.2019 held as follows:
“49.In light of the view that we have taken, it is unnecessary to advert to Shri Dwivedi's arguments that the explanation (1) to Section 2(10) of the West Bengal Sales Tax Act is a stand-alone provision and not an explanation in the classical sense. We, therefore, answer the three questions 5/10 https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021 posed by the Division Bench in State of West Bengal v. Calcutta Club Limited (supra) as follows:
(1)The doctrine of mutuality continues to be applicable to incorporated and unincorporated members' clubs after the 46th Amendment adding Article 366(29-A) to the Constitution of India.
(2)Young Men's Indian Association (supra) and other judgments which applied this doctrine continue to hold the field even after the 46th Amendment.
(3)Sub-clause (f) of Article 266(29-A) has no application to members' club.
50.Having gone through the judgment and order of the West Bengal Taxation Tribunal dated 3rd July, 2006 and the impugned Calcutta High Court judgment dated 1st February, 2008, and in view of the answers to the three questions referred to the present Three Judge Bench (as listed hereinabove). We are of the view that no interference is called for in the findings of fact or declaration of law in this case. Accordingly, C.A.No. 4184 of 2009 stands dismissed.” 6/10 https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021
6.In the light of the decision of the Larger Bench upholding the view of the Hon'ble High Court in the Calcutta Club case, the doctrine of mutuality will continue to apply to incorporated and unincorporated members' clubs after the 46th Amendment adding Article 366(29-A) to the Constitution of India.
7.In the light of the recent decision of the Larger Bench of the Hon'ble Supreme Court, we have to necessarily interfere with the show cause notice issued by the Assessing Officers proposing to levy tax on the writ petitioners. However, we are convinced of the fact that there may be other issues, which may require to be adjudicated by the Assessing Officer and since the prayer sought for in these writ petitions are for declaratory relief, we dispose of these writ petitions by holding that the law laid down by the Hon'ble Supreme Court in the case of Calcutta Club Limited, dated 03.10.2019 holds good and it shall enure in favour of the petitioner's club.
8.Bearing the above legal principles in mind, we permit the petitioners to give suitable reply to the notice issued by the Assistant Commissioner and in the light of the decision of the Hon'ble Supreme Court, the theory of mutuality will apply to both incorporated and unincorporated clubs and this issue should be taken into consideration by the respective Assessing Authorities.
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9.With the above observations, these Writ Petitions are disposed of. No costs. Consequently, the connected miscellaneous petitions are closed.”
5. With the above observations, this Writ Petition stands disposed of. No costs.
(T.S.S.,J.) (S.A.I.,J.)
05.07.2021
Index : Yes/No
Internet : Yes/No
kmm
Note : In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned.
8/10https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021 To
1. The Principal Secretary, Government of Tamil Nadu, Department of Commercial Taxes, Fort St.George, Chennai – 600 009.
2. The Commissioner of Commercial Taxes, Commercial Taxes Department, Ezhilagam, Chepauk, Chennai – 600 005.
3. The State Tax Officer, Commercial Taxes Department, Kodaikanal Assessment Circle, Kodaikanal.
4. The Commissioner of Prohibition and Excise Department, Ezhilagam, Chennai.
9/10https://www.mhc.tn.gov.in/judis/ W.P.(MD).No.3080 of 2021 T.S.SIVAGNANAM, J.
and S.ANANTHI, J.
kmm Order made in W.P.(MD).No.3080 of 2021 Dated:
05.07.2021 10/10 https://www.mhc.tn.gov.in/judis/