1. M/s. Marriott Hotels lndia Limited v. 1. The Assistant Commissioner (CT)

of the Writ Petition as otherwise the petitioner will be pu: to severe loss and hardship. l.A. NO: 'l OF 2012(WPMP NO: 5728 OF 20121 Petition under Section 151 CPC praying that in the circ tmslances stated in the affidavit filed in support of the petition, the High Cour nay be pteased to amend the prayer in the Writ Petition as under, in the inte est of justice: lt is prayed that the Hon'ble Court may be pleased to issue a Writ f lVandamus or any other appropriate writ or order or direction - (a) declare the order Cated '16-'1 '1-2008 passed by the 1st R,r pondent as without authority of law and jurisidiction in the absense of aulhorizz t rn bv the territorial l J Deputy Commissioner for conducting audit as well as assessment in terms of Rule 59 of the APVAT Rules as held by this Hon'ble Court in Sri Balaji Flour Mills case (40 vST 1s0); (b) to call for the records in proceedings dated 16.11.2008 passed by the 'lst respondent for the period 2006-07 to 2008-09 (upto July 2008) holding that the '1st Petitioner is liable to pay tax on supply of food and beverages in the hotel as illegal, arbitrary and contrary to the provisions of the Andhra Pradesh Value Added Tax Act, 2005; (c) alternatively, to direct the 2nd Respondent to transfer the amount of tax of Rs.2,23,16,3211- paid by 2nd Petitioner to 2nd Respondent for the period 2006-07 to 2008-09 (upto July 2008) to 1st Respondent to be given credit to 1st Petitioner as tax payment; (d) declaring Section 67 (4) to mean that Advance Ruling Authority decrsion is binding on the concerned assessee only; l.A. NO: 2 OF 2012(WPMP. NO: 5729 OF 20121 Petition under Section'151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to permit the Petitioner to raise the additional ground referred in Para 5 herein above, in the interest of justice. l.A. NO: 1 OF 2009(WVMP. NO: 2885 OF 2009) Between '1 . The Assistant Commissioner (CT), VAT Management Unit ll, Secunderabad Division, Hyderabad.

2. The Commercial Tax Officer, Gandhinagar Circle, Hyderabad. 4

3. The Government of Andhra Pradesh, rep. by its Ser;r :tary, Revenue-CT-ll Department, A.P. Secretariat, Hyderabad. ...PETITIOh I RS/RESPONDENTS AND

1. N4/s. l\,4arriott Hotels lndia Limited, Unil 2-4, Dynast ', Business Park A, Andheri Kurla Road, Andheri (East), Mumbai - 400 05( Rep. by its Director l\,4r.Rajeev Menon.

2. tr,4/s. Viceroy Hotels Limited, Door No. 1-3-10361311, I ccality Gandhinagar, District Hyderabad, Street Lower Tank Bund Rr,: d, Town and City Hyderabad-500 080, Rep. by rts Company Secretary N/r. i.Srinivas l\.4urthy. ...RESPONDENTIi, A/RIT PETITIONERS Petition under Section 151 CPC praying that in the ci' umstances stated in the affidavit filed in suppo( of the petition, the High Court n i y be pleased vacate the interim stay dt. 29 12 2OOg granted in W.P.[V.P.No. 3-t".32|2OOB in W.P.No. 28414 of 2008. Counsel for the Petitioner: SRI A. VENKATESH, SENIOR C( UNSEL REPRESENTING SRI VADDENDF.I . JOSHI Counsel forthe Respondents: SRI SWAROOP OORILLA, SPECIAL GOVERNMENT PLEADER FO i STATE TAX The Court made the following: ORDER :, //' IN THE HIGH COURT FORTHE STATE OF TELANGANA AT HYDERABAD THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICB SUDDALA CHALAPATHI RAO Writ Petition No.28414 of 2008 Dated: 30.12.2025 Between: M/s.Marriott Hotels India Limited, UnitZ-4, Dyr:asty Business Park A, Andheri Kurla Road, Andheri (East), Mumbai - 400 059. Rep by its Director Mr.Rajeev Menon and another . . . Petitioners AND 'fhe Assistant Commissioner (CT), VAf Management Unit II, Secunderabad Division, Hyderabad and others. . . . Respondents OR-DER, (per Hon'ble Sri Justice P.Sam Koshy) Heard Mr.A.Venkatesh, learned senior counsel representing Mr.Vaddendra Joshi and Mr.Swaroop Oorilla, learned Special Government Pleader for State Tax. Perused the record. r 2 _ t: ::.

2. The instant is the writ petition which . as been t'iled assailing the order dated 10. I 1.2008 passed by resp: rdent No.l for the assessment year 2006-rJ7 to 2008-09.

3. Petitioner No.l - M/s.Marriott Hotel India -imited which is in the supply of lood and beverages, by virtue c I an operating agreement dated 02.01.2006 entered into with the letitioner No.2 i.e., NtUs.Viceroy Hotels Liniited started operat ng the hotel business. Horvever, the Department subsequently fc,r nd that all the bills that were raised in the process of operating ttr said business by petitioner No.l ivere issued in the name of petiti: rer No.1 itself and therefore entire tumover would get added to : e business of petitioner No.l fbr r.vhich the they would be tiable tt pay tax under the APVAT Act (as it then was). On the contrary, ttt contention of the petitioner No. I was that since they were onl,, operating the hotel which ultimately r.vas owned by petitio I :r No.2 i.e., N4/s.Viceroy Hotels Limited and the revenue that ras generated was been trar-rs f-erred to the petitioner No.2 and it vas petitioner No.2 who was paying the tax to the authorities undr.r the VAT Act and since petitioner No.2 rvas paying qxes, pctitiorr rr No.1 coulcl \ 3 not have been made to pay the tax again as was demanded by the authorities. It was this order passed by respondent No.l dated

10. I I .2008 which was under challenge in the present writ petition

4. One of the primary contentions raised by the petitioner was that the entire proceedings drawn by the respondents stands vitiated as the very audit and the subsequent inspections and assessment carried out were all without proper authorization as it is required. Leamed senior counsel for the petitioner relied upon the decision of this High Court itself in the case of M/s.Sri Balaii Flour Mills v. Commercial Tax Officer II, Chiuoor and othersl to canvas the arguments that the entire proceedings drawn by the respondents being vitiated for want ofproper authorization.

5. Taking into consideration the pleadings that have come on record, more particularly from the respondents, there does not seem to be any dispute so far as petitioner No.2 - M/s.Viceroy Hotels limited having paid tax of Rs.2,23 ,16,3211- to respondent No.2 for 12010 scc online AP 1187 4 the relevant assessment period. There also does not reem to be any drspute by either of the parties so far as the t<i al turnover is concemed. The only question that arouse w as whether the respondent authonties were justified in demandinr the tax from petitioner No. I i.e., M/s.Marriott Hotels India t.inr ted, when the petitioner No.2 had already paid the tax against sar< tumover said to have been received by the petitioner No. 1 - M/s i {arriott Hotel, though, leamed Special Goventrnent pleader rvoul,l r nly say that it is only Rs.2.23 lakhs of tax that has been paid b1. r :titioner No.2 against total tax liability of Rs.3,16,45,2021-. The t ;sue which is also raised by the petitioners was that the very aL r it which was conducted by the Department follor,i,ed by the r spection and assessment done were of without authorization at ii istages.'fhis aspect also is not in dispute so far as the stancl of r. ;pondents are concerned of the audit inspeotion and assessment r I being done without proper authorization.

6. In the given factual matrix, we would at th I stage like to refer to the operative part of the order passed L,\. the Division Bench of this Courl in the case ctf M/s.Balaji Flour t tiils (supra). 5 The relevant portion of the said judgment for convenience sake is being reproduced herein " Relief: (a) ln the resttlt, in the tmalysis and for the reesons as above, we reject the relief to declare Rule 59(1)(4)(itb) and (d1 of the VAT Rules as ultra vires. We also declare that sub sectiorts (3) and @) of Section l7 do not sulfer Jrom an), co stihttiottal inJirmity and are valid. We also reject all other pruyers for declaring the impugned rule and impugned assessment orders as ultra vires or invalid excapt to the extent indicated in (b) and (c) below; (b1 In vieu'of our holding that the authorisdtion to audit under Section 43 read wtth Rule 59(l)(7) by itseLf does not enable audit olficer to undertake assessment, we set aside all the assesstttent orders and consequential orders, if any under Section 53 of the VAT Act, in all the writ petitiotls; (c) All the impugned assessment orders shall stand remitted to the respective audit officers who shall submit audit reports as contemplated under Chapter VII of the VAT Audit Manual .fbr appropriate Post Audit Action. If the competent controlling ond/or supervising authority like Deputy Comniss ioner issues separate orders authorizing assessment, it shall be open to suclr authorizing olficer or ctuthority prescribed, as the case may be, to undertake assesst ent in accordance with law; 6 (d) ll/P.No.1704 of 2009 is disposed rt. aside the assessment order, dated 16.12.20Ar period from April, 2005 to Mctrch, 2006. This i: , t subject to the power ond juristliction oJ the tt authot ity under Section 32(11 ofthe I/AT Act; attt setti ng for rhe ot,ever, v i.; io nal (e) lle direct the pu'ties to bear their ottn , OStS,,,

7. From the aforesaid operative portion of th,r said judgment in the case of M/s.Balaji Flour Mi1ls, rt is apparenr- r rat for want of authorization as is required under the provisions c J APVAT Act, the entire proceedings initiated lrom the stage of ir dit r.vould get vitiated. We are therefore inclined to al[ow the writ letition on this ground alone that the entire proceedings, being vithout proper authorization being verified by the decision of thrs {igh Court in the case of lr4/s.Balaji Flour Mills (supra). The rr: ir issue to be considered would be in the light of the viti: t on of entire proceedings and the order dated 16.11.2008 passed )y respondent No.1. We are again inclined to lollow the order pas: t d by the High Court in the case of M/s.Balaj i Flour Mitls whr r :in also altcr setting aside the proceedings of the State authoriri:s u,hich was without authorization, the marters stood remitter I back to the concemed authorities from the stage of its vitiatioiL rvhich in the \ 7 instant case would be the stage ofaudit. The respondent authorities would be at liberty too if at all they want to initiate appropriate proceedings in accordance to the provisions of APVAT Act (as it then was) from the stage of audit after getting the due authorization is required lor conducting ol the audit and the subsequent authorization required for assessment and inspection if at al1

8. So far as the aspect whether it would be the petitioner No.l would be liable to pay the tax or would it be the petitioner No.2 i.e., M/s.Viceroy Hotels Limited, this aspect also is left open to be decided by the authorities after scrutinizing the contract agreement entered into between the petitioner No.1 and petitioner No.2 dated 02.01.2006. We leave it open for the authorities to proceed in accordance to the provisions of law after due scrutiny of the entire documents including the Books of Accounts which shall be produced by both the petitioners in respect of relevant I assessment years which would ultimately be taken into account for the purpose of requantihcation of the tax liability. Needless to mention that since petitioner No.2 has already paid tax of Rs.2,23,16,321l- to the Department, in addition the petitioner No.1 t \ 8 i.. ':'.' also at the time of the admission of the writ petiticr had. in terms of the order of the High Court, paid another Rs.1,{lr) 00,000/-. Any further clairn to be raised on either side would oir v be done on finalizat ion o f proceedings.

9. Accordingly, this writ petition is allorved ar d disposed of There shall be no order as to costs. Consequently, miscellaneous petitions pending . if any, shall stand closed. That the Rule Nisi has been made absolute as stated above Witness the HON'BLE THE CHIEF JUSTICE SRI APARES I KUMAR SINGH' on this Tuesday, the Thirtieth Day of December, Two Thousarr land Twenty Five' Sd/ P.C SULEKHADEVI ASIi STANT BE.GISTRAR ,- <::- //TRUE COPY// SECIJON OFFICER To 1 . The Assistant Commissioner (CT), VAT fvlanagement I nit ll, Secunderabad Division, Hyderabad.

2. The Commercial Tax Officer, Gandhinagar Circle, Hyder lbad' 3. The Secretary, Revenue Department, State of T: angana, Secretariat, Hyderabad.

4. One CC to SRI VADEENDRA JOSHI, Advocate [OPUC] 5. Two CCs to SRI SWAROOP OORILLA, Special Go' ernment Pleader for - State Tax, High Court for the State of Telangana at Hlzc r rabad' [OUT]

6. Two CD Copies MP PMK 6 HIGH COURT DA-l ED:3011212025 ORDER WP.N<, 28414 of 2008 oR IrlE Si4 \ ( 't ='. () L, t L, I 0 4 Fl:tt 2028 * PATC ALLOWING THE V! RlT PETITION & DISPOSING OF THE VI RIT PETITION WI'I'HOUT COSTS