High Court · 2025

W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 07.04.2025CORAMTHE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMYW.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024& W.M.P.Nos.37736, 37841, 37617, 37619 & 37624 of 2024 Tvl.Beauty Star Social Welfare Club,Rep by its Secretary, Arun Vijay,Regd No.122/2008, S.F.No.503/1,Palayanji Palayam, Pirivu Dharapuram Road,Tiruppur 641 608.... Petitioner in all petitions Vs. 1.The State Tax Officer, Pongalur Assessment Circle, Tirupur I, No.16, Emberar Building, Indira Nagar, Avinashi Salai, Tiruppur 641 0032.The Joint Commissioner (State Tax), Intelligence CT Annexe Building, 160/161, Meenakshi Sundaranar Road, Erode 638 0013.District Manager, Tamil Nadu State Marketing Corporation Ltd., Having Office at Tamil Nadu Ware Housing Corporation, Angeripalayam, Tiruppur 641 602... Respondents in all petitions1/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024Common Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records pertaining to the impugned proceedings of the 1st respondent i) in TIN No.33222396404/2017-18 dated 22.10.2024 annexed with a Notice of Assessment and Demand in TIN No.33222396404 (AY 2017-18) for a sum of Rs.26,74,639/- & a notice of Assessment and Demand in TIN No.33222396404 (AY 2017-18) for a sum of Rs.47,57,194/- towards interest & a notice of Penalty in TIN No.33222396404 (AY 2017-18) for a sum of Rs.40,11,959/- ii) in TIN .No. 33222396404/2018-2019 dated 22.10.2024 annexed with a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2018-2019) for a sum of Rs. 54,31,458/-, a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2018-2019) for a sum of Rs. 83,57,005/- towards interest, a Notice of Penalty in TIN. No. 33222396404(Assessment Year 2018-2019) for a sum of Rs. 81,47,157/-, a Notice of Compounding Fees in TIN. No. 33222396404(Assessment Year 2018-2019) for a sum of Rs. 18,000/- iii) in TIN .No. 33222396404/2021-2022 dated 23.10.2024 annexed with a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2021-2/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 20242022) for a sum of Rs. 1,17,12,371/-, a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2021-2022) for a sum of Rs. 95,80,399/- towards interest, a Notice of Penalty in TIN. No. 33222396404(Assessment Year 2021-2022) for a sum of Rs. 1,75,68,557/-, a Notice of Compounding Fees in TIN. No. 33222396404(Assessment Year 2021-2022) for a sum of Rs. 24,000/-iv) in TIN .No. 33222396404/2020-2021 dated 22.10.2024 annexed with a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2020-2021) for a sum of Rs. 65,06,560/-, a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2020-2021) for a sum of Rs. 68,83,762/- towards interest, a Notice of Penalty in TIN. No. 33222396404(Assessment Year 2020-2021) for a sum of Rs. 97,59,840/-, a Notice of Compounding Fees in TIN. No. 33222396404(Assessment Year 2020-2021) for a sum of Rs. 24,000/- v) in TIN .No. 33222396404/2019-2020 dated 22.10.2024 annexed with a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2019-2020) for a sum of Rs. 55,31,051/-, a Notice of Assessment and Demand in TIN. No. 33222396404(Assessment Year 2019-2020) for a sum of Rs. 71,82,790/- towards interest, a 3/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024Notice of Penalty in TIN. No. 33222396404(Assessment Year 2019-2020) for a sum of Rs. 82,96,577/-, a Notice of Compounding Fees in TIN. No. 33222396404(Assessment Year 2019-2020) for a sum of Rs. 24,000/- and quash the same as illegal and consequently, direct the 3rd respondent to resume the supply of alcoholic liquor to the petitioner club.For Petitionerin all petitions : Mr.M.Sricharan Rangarajan, Sr.counsel, for Mr.N.S.Amogh SimhaFor Respondentin all petitions : Mr.C.Harsha Raj, Special Govt.Pleader for R1&2 Mr.M.Sekar, Standing counsel for R3COMMON ORDERThese writ petitions have been filed challenging the four impugned orders dated 22.10.2024 and one impugned order dated 23.10.2024 passed by the respondent.4/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 20242. The learned Senior counsel appearing for the petitioner would submit that in these cases, the petitioner, being a club, is exempted from payment of tax for the sale of liquors to its members. Due to some suspicion, the respondents had conducted a surprise inspection at the petitioner's premises on 18.07.2023 and subsequently, the show cause notice was issued by the respondent by alleging that the petitioner has sold the liquors to the outsiders, who are other than its members. However, the respondent had not produced any oral or documentary evidences to substantiate the said allegation. For the said show cause notice, a reply was filed by the petitioner, wherein it has been stated that the petitioner had obtained FL-2 license to serve liquor to its members, for which they are exempted from the payment of tax and accordingly, they had sold the liquors only to its members and not to the outsiders. However, without considering the same, the impugned orders came to be passed by the respondent.3. Further, he had also referred to the judgement of the Hon'ble 5/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024Supreme Court in State of West Bengal vs. Kolkata Club reported in (2019) 19 SCC 107, wherein it has been held that the social clubs are not liable to pay any tax for the sale of liquors to its members. Hence, he requests this Court to set aside the impugned orders passed by the respondent.4. On the other hand, the learned Special Government Pleader and the learned Standing counsel appearing for the respondents had strongly opposed the submissions made by the petitioner and would submit that there is no dispute on the aspect that the petitioner is exempted from the payment of tax for the sale of liquors to its members. However, in this case, the liquors were sold by the petitioner not only to its members but also to the outsiders, who are other than members. The said aspect came to the knowledge of the respondent at the time of inspection conducted by them at petitioner's premises on 18.07.2023. Subsequently, the show cause notice came to be issued by the respondent, for which the reply was filed by the petitioner. However, in the said reply, they had not denied the allegations made by the respondent. Under these 6/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024circumstances, the impugned order came to be passed on 22.10.2024.5. In reply, the learned Senior counsel appearing for the petitioner would submit that the allegations made by the respondents were not supported by any oral or documentary evidences and hence, the petitioner was unable to file any detailed reply for those bald allegations. Further, he would contend that in absence of any evidences, the respondents were not supposed to pass the impugned order. Hence, he requests this Court to set aside the said impugned order.6. Heard the learned counsel for the petitioner and the learned Special Government Pleader and the learned Standing counsel appearing for the respondents and also perused the materials available on record.7. In these cases, there is no dispute on the aspect that the petitioner, being a social club, had obtained FL-2 licence for selling liquors to its members, for which they are exempted from payment of tax. The said aspect was fairly admitted by both the parties.7/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 20248. Though the petitioner is exempted from payment of tax for sale of liquor to its members, it does not mean that the respondent will not have any power to make inspection at the petitioner's premises to verify as to whether the liquors are sold only to the members or not. If there is any suspicion with regard to the sale of liquors to the outsiders, certainly, the respondent is empowered inspect the petitioner's premises. Accordingly, the inspection was conducted on 18.07.2023, whereby the respondents had come across and obtained some evidences to show that the petitioner has sold the liquors to the outsiders, who are other than its members. 9. However, while issuing the show cause notice, the respondent had not produced any of the evidences, either documentary or oral, to substantiate their allegations against the petitioner. Normally, an allegation has to be supported by any documentary or oral evidences. Any allegation, without such evidences, will only be considered as bald allegations. In these cases, no evidences or proofs have been produced 8/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024by the respondent to substantiate their allegations and hence, in the absence of such evidences or proofs, the petitioner was unable to file a suitable reply for the show cause notice issued by the respondents. Under these circumstances, the impugned order came to be passed by the respondent. Hence, it is clear that the said impugned order has been passed by the respondents, in non-application of mind, without any basis.10. Therefore, this Court is of the considered view that the said impugned order is liable to be set aside. Accordingly, this Court passes the following order: i) The impugned orders dated 22.10.2024 & 23.10.2024 are set aside and the matters are remanded back to the 1st respondent for fresh consideration.ii) The petitioner is directed to file their reply along with all the relevant documents, within a period of 4 weeks from the date of receipt of a copy of this order.iii) Thereafter, the respondent is directed to consider the reply filed by the petitioner and pass fresh orders, after providing sufficient opportunity to the 9/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024petitioner, as expeditiously as possible.11. With the above directions, these writ petitions are disposed of. No costs. Consequently, the connected miscellaneous petitions are also closed.07.04.2025Speaking/Non-speaking orderIndex : Yes / NoNeutral Citation : Yes / NonsaTo1.The State Tax Officer, Pongalur Assessment Circle, Tirupur I, No.16, Emberar Building, Indira Nagar, Avinashi Salai, Tiruppur 641 0032.The Joint Commissioner (State Tax), Intelligence CT Annexe Building, 160/161, Meenakshi Sundaranar Road, Erode 638 0013.District Manager, Tamil Nadu State Marketing Corporation Ltd., Having Office at Tamil Nadu Ware Housing Corporation,10/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024 Angeripalayam, Tiruppur 641 60211/12 https://www.mhc.tn.gov.in/judis W.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024KRISHNAN RAMASAMY.J.,nsaW.P.Nos.34897, 34901, 34682, 34686 & 34690 of 2024and W.M.P.Nos.37736, 37841, 37617, 37619 & 37624 of 2024 07.04.2025(2/2)12/12