Counter Sales Permission Of Alcoholic Liquor Was Concession Given To Bar Attached Hotel Owners For Carrying On Business During Covid-19: Kerala High Court

The Kerala High Court has held that the permission to effect over-the-counter sales of alcoholic liquor was a concession given to bar-attached hotel owners to permit them to carry on business and tide over the COVID lockdown period. The assessee cannot now contend that the tax on such transactions should not be levied on him because he did not originally have permission to effect such sales.

The bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has observed that the appellant, having opted to pay tax on a compound basis in lieu of the regular basis of assessment, cannot turn around and contend that the formula provided for payment of tax on a compound basis does not apply to him.

The petitioner/assessee is the appellant aggrieved by the judgment of a single judge. The Writ Petition was filed challenging orders issued by the respondent or department under the provisions of Section 7 of the Kerala General Sales Tax Act for the assessment years 2022-2023 and 2023-2024, finalizing the assessment of the petitioner on a compounded basis as contemplated under Section 7 of the KGST Act.

The appellant had opted to pay tax on a compound basis. The only issue urged by the appellant in the Writ Petition was with regard to the manner in which the tax at the compounded rate was computed.

The appellant contended that during the previous years when the COVID-induced lockdown was in force, the appellant was permitted to effect over-the-counter sales despite having been issued a license only for operating a bar-attached hotel. Since over-the-counter sales were not permitted for bar-attached hotels, the turnover pertaining to over-the-counter sales could not be reckoned for the purposes of computing the total turnover of the previous years relevant for computing the tax on a compound basis for the assessment years in question. The computation of compounded tax under Section 7 of the KGST Act was an erroneous one and ought to have been interfered with by the Single Judge.

“We are also not persuaded to accept the argument of the learned counsel that the over-the-counter sale figures could not have been taken into consideration for computing the turnover of the bar attached hotel for the purposes of computing the tax liability under Section 7 of the KGST Act,” the court said while upholding the decision of the Single Bench.

Citation: 2024 LiveLaw (Ker) 241

Counsel For Petitioner: R. Sreejith; K. Krishna

Counsel For Respondent: Sr. Govt. Pleader V.K.Shamsudheen

Case Title: Lukose. K.C. Versus Deputy Commissioner

Case No.: WA NO. 498 OF 2024

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