9911796707
TMI Blog2021 (4) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tamil Nadu Value Added Tax Act. The petitioner's returns had also been finalized on deemed assessment basis. Whileso, there was an inspection of the petitioner's business premises by the Enforcement Wing Officials on 17.04.2015 and 21.04.2015. Certain discrepancies were noticed. Based on the same, the respondent issued pre-revision notices on 14.10.2015. The petitioner offered their objections in response thereto on 14.11.2015. Thereafter, personal hearing was conducted. The respondent rejected the stand of the petitioner and passed the impugned orders levying tax and interest for the assessment years 2007-08 upto 2013-14 for the assessment year 2014-15, apart from levying tax and interest, penalty was also imposed. Questioning the same, these writ petitions came to be filed. 3.The learned counsel for the writ petitioner raised four fold contentions:- (a) The case of the respondent is that the petitioner had wrongly filed its monthly returns in Form L and paid tax at 2% under Section 7(1)(b) of the Tamil Nadu Value Added Tax Act, 2006, while it should have paid at higher rate under 7(1)(a) of the Act. According to the petitioner's counsel, the petitioner would c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re complied with in the instant case. 7.The next question that arises for consideration is whether the respondent erred in applying Section 7(1)(a) of the Act. Section 7(1) of the Act reads as follows:- "7. Levy of taxes on food and drinks - (1) Notwithstanding anything contained in this Act, but subject to the provisions of this Act,- (a) every dealer shall pay tax on the sale of ready to eat unbranded foods including sweets, savouries, unbranded non-alcoholic drinks and beverages served in or catered indoors or outdoors by star hotels recognized as such by Tourism Department of the State Government or Government of India and restaurants attached to such hotels at the rate of 2[fourteen] and half per cent of the taxable turnover; and (b) every dealer other than those mentioned in clause (a) 3[whose total turnover is not less than rupees ten lakhs for a year], shall pay tax on the sale of ready to eat un-branded foods including sweets, savouries, un-branded non-alcoholic drinks and beverages served in or catered indoors or outdoors by hotels, restaurants, sweets-talls, clubs, caterers and any other eating houses, at the rate of 4[five] per cent of the taxable turnover. Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Parts A and B of First Schedule to the Act. Section 7 provides for levy, collection and payment of tax on the sale of unbranded foods and drinks including sweets and savouries in Hotels, Restaurants and Sweets stalls including outdoor catering. Section 7 reads as extracted belos: 7. Levy of taxes on food and drinks - (1) Notwithstanding anything contained in this Act, but subject to the provisions of this Act,- (a) every dealer shall pay tax on the sale of ready to eat unbranded foods including sweets, savouries, unbranded non-alcoholic drinks and beverages served in or catered indoors or outdoors by star hotels recognized as such by Tourism Department of the State Government or Government of India and restaurants attached to such hotels at the rate of 2[fourteen] and half per cent of the taxable turnover; and (b) every dealer other than those mentioned in clause (a) 3[whose total turnover is not less than rupees ten lakhs for a year], shall pay tax on the sale of ready to eat un-branded foods including sweets, savouries, un-branded non-alcoholic drinks and beverages served in or catered indoors or outdoors by hotels, restaurants, sweet-stalls, clubs, caterers and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and non-alcoholic beverages would attract tax only at the rate reduced rate of 2% as per notifications in G.O.Ms. No. 12, CT & R (B2) Department dated 01.01.2007 and G.O.Ms.No.32, CT & R (B2) Department dated 10.03.2012 as aforesaid. With this legal backdrop, the request of applicant-dealer for clarification regarding rate of tax on sale of ready to eat unbranded foods and drinks, including sweets, savouries including non-alcoholic beverages may be considered and accordingly clarified as below: Sale of "Ready to eat Unbranded Foods and Drinks, including sweets, savouries and non-alcoholic beverages" at Farm House restaurant on ECR road, Panaiyur village is taxable at the reduced rate of 2% under Section 7(1)(b) of the TNVAT Act, read with Notification No.II(1)CTR/(a-14)2007 in G.O.Ms. No. 12, CT & R (B2) Department dated 01.01.2007 and Notification No.II(1)CTR/(a-2)2012 in G.O.Ms.No.32, CT & R (B2) Department dated 10.03.2012, as long if it is not classified as a star hotel." 10.The assessing officer would point out that in the said advance ruling, the entity in question was running its business at a place away from the star hotel and it remained as a separate premise at Panaiy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect. The learned counsel for the petitioner would point out that there are charging provisions which clearly mention that the entire turn over is liable to be taxed at a certain rate. Section 7(1)(a) of the Act on the other hand states that higher tax rate will be paid only on the items mentioned therein. 12.Likewise, the respondent is not justified in levying interest from the original assessment year. The assessing officer would call upon me to follow the order dated 18.01.2021 made in W.P.(MD)Nos.12995 to 12999 of 2012. There, the star hotel itself was selling the items mentioned in Section 7(1)(a) of the Act. But in the case on hand, Rathna Residency is not the petitioner before this Court. It is only Rainbow Restaurant that is the petitioner before this Court. Rainbow Restaurant is contending that it cannot be considered as "a restaurant attached to a star hotel". Thus the petitioner was under a bonefide impression that they are not liable to pay tax at a higher rate. Therefore, as per Section 42 of the Act, only from the date on which the petitioner's liability is quantified, the question of paying tax would arise. 13.That apart as rightly pointed out by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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