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2015 (5) TMI 831 - ANDHRA PRADESH HIGH COURT

2015 (5) TMI 831 - ANDHRA PRADESH HIGH COURT - [2015] 81 VST 454 (T&AP) - Imposition of tax on horseracing / betting - powers of Commercial Tax Department - Seizure of books of accounts - Scope of Hyderabad Horse Racing and betting Tax Regulation of 1358 F., (for short the Regulations which are framed in the erstwhile Hyderabad State in 1358 Fasli. - Held that:- The petitioner is a licensed book-maker, as defined under Regulation 12(c) of the Regulations. Regulation 16 clearly provides for payme .....

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and the Rules made thereunder, if any amounts are withheld by the licensed book-maker, or in the event of suppression of turnover, there is no provision for the assessment of tax recoverable from the book- maker. The Regulations provide that all the monies which a licensed book-maker is liable to make over to the prescribed officer under Section 17, shall be recovered from the licensed book-maker as public demand. But, such recovery can be made only for the demand of tax payable by the petition .....

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nment is empowered to inspect and take copies of such accounts or any other material from the place other than Race Course area also, when there are allegations of suppression of turnover or illegal retention of collected tax monies. - Decided against appellant. - Writ Petition Nos.17650, 17666, 17668 and 18431 of 2001 - Dated:- 1-4-2015 - SRI R. SUBHASH REDDY AND Dr. B. SIVA SANKARA RA, JJ. For the Appellant : Sri S.R. Ashok, Sr. Counsel for Sri A. Ravinder Reddy For the Respondent: Spl. G.P., .....

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f Prohibition: (i) interdicting the respondent from proceeding further in pursuance of the show cause notice dt.12.07.2001 issued in CCTs JC(CT)/Enft/CTO/VI/51/1999-2000, HRBT; (ii) declare the search made by the Enforcement Wing of the Commercial Tax Department of the residential premises of the deponent of the writ petition on 7-8-2000 as illegal and without jurisdiction and consequently direct the respondents to return the seized books of accounts and other records to the petitioner forthwith .....

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r forms of betting in connection therewith. Chapter I of the Regulations deal with tax on horse racing and Chapter II deals with taxes on certain forms of betting. 4. Petitioner is a licensed book-maker, as defined under Regulation 12 of the Regulations, in the Hyderabad Race Course. As per Regulation 12(c) of the Regulations, a licensed book-maker means any person who carries on the business or vocation of or acts as book-maker or turf commission agent under a license or permit issued by any ra .....

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powered by the Government, permit such officer or an officer authorised in writing by him in this behalf, to inspect and take copies of such account. Regulation 20 empowers to make Rules. Accordingly, Hyderabad Horse Racing and Betting Tax Rules, 1949 (for short the Rules) are framed. 5. Petitioner, one of the licensed book-makers at Hyderabad Racing Club, has filed monthly statements of tax due, during the years 1994-95 to 2000-01, along with tax demands thereon, with the Race Club and in turn .....

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nd thereby failed to maintain true and correct accounts, provisional show-cause notice dated 12.07.2001 vide CCTs JC (CT)/Enft/CTO-VI/51/1999-2000, HRBT, was issued determining balance tax payable at ₹ 34,01,307/-. In the aforesaid notice, objections were called for, for the proposed levy. On receipt of the show-cause notice, this Writ Petition is filed. 7. It is the case of the petitioner that, in absence of any provision for assessment, proceedings are initiated to recover the tax from t .....

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mon counter-affidavit on behalf of the respondent. In the counter-affidavit, while denying the various allegations made by the petitioner, it is stated that petitioner is a licensed book-maker, who used to carry on business within the premises of Hyderabad Race Club and such other locations as may be permitted by the appropriate authority. It is averred that an anonymous complaint has been received by the respondent, specifically stating that the petitioner has suppressed total monies collected .....

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is house; thereafter all the books were verified and compared with the returns filed by the petitioner and on the basis of comparison and verification of various books and bank passbooks, it was found that huge turnovers had been suppressed by the petitioner. In the counter-affidavit, it is further stated that whenever amount is collected as a bet, 12.5% of such amount shall be deemed to have been collected as betting tax on behalf of the Government; in the present case, petitioner had collected .....

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iction. Stating thus, respondent prayed for dismissal of the Writ Petition. 9. Heard Sri S.R. Ashok, learned senior counsel assisted by Sri A. Ravinder Reddy, for the petitioner and the Special Government Pleader for Commercial Taxes (Telangana) for the respondent and perused the material on record. 10. It is contended by the learned counsel for the petitioner, that under the scheme of the Regulations and the Rules framed thereunder, respondent-authority is not empowered to make any assessment a .....

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ubmitted by the learned Special Government Pleader for Taxes (Telangana) that, as per the scheme of the Regulations and the Rules, petitioner, being licensed book-maker, is liable to maintain true and correct accounts and file returns disclosing entire turnover, but, in the instant case, as the turnovers are suppressed, a search is conducted in the house of one of the partners of the petitioner and on recovery of accounts books etc., impugned proceedings are initiated. It is submitted that, bett .....

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earch even at the place other than the Race Course. 12. Having heard the learned counsel for the parties, we have perused the Hyderabad Horse Racing and betting Tax Regulation of 1358 Fasli and the Rules made thereunder. The said Regulations govern collection of tax on horseracing and other forms of betting in connection therewith. The petitioner is a licensed book-maker, as defined under Regulation 12(c) of the Regulations. Regulation 16 clearly provides for payment of tax at 12.5% towards bett .....

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onth in which a race meeting or race meetings are held, every licensed book-maker carrying on business at the race meeting shall forward to the Betting Tax Officer, through the manager of a race meeting or other authorised officer of the race meeting in Form E, setting forth the total amount of the monies paid or agreed to be paid by him in satisfaction of winning bets; and make over to the Betting Officer the amount of the tax due to the Government on such monies at the rate specified by the Go .....

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But, such recovery can be made only for the demand of tax payable by the petitioner. But, in the absence of any provision for assessment and determination of tax payable by the petitioner-book-maker, respondent does not have any authority or jurisdiction to initiate proceedings for recovery of tax from the petitioner. As the levy pertains to betting tax, unless there is specific and definite jurisdiction conferred on the respondent, it is not open to initiate such proceedings and make an assessm .....

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ty in the Regulations or the Rules, we are constrained to hold that the respondent is not having any jurisdiction or authority either to initiate proceedings or to pass any order assessing the tax payable by the petitioner on the allegation of suppressing the turnover or retention of tax collected by the petitioner-book-maker. 13. The learned counsel for the petitioner has relied on a judgment of a learned single Judge of this Court in K. Babji Rao v. State of A.P., wherein this Court, while con .....

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are of the considered view that in the absence of any provision to make a demand for payment of tax based on the suppressed turnover, respondent-authority is not empowered to initiate any proceedings either by issuing show-cause notice or proceed further. 14. At the same time, the submission made by the learned senior counsel for the petitioner, that power of inspection and search under the Regulation is confined only to the Race Course, is not convincing and acceptable. Under Regulation 9, any .....

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