Disputed hotel-service tax rate turns on factual segregation of restaurant facilities, with assessment remitted for fresh determination.

The tax rate for a restaurant segment was disputed on the basis that it may have formed part of a classified hotel service, but the record did not conclusively show whether the restaurant, kitchen and dining facilities were independent of the hotel's lodging-related food service. Because the factual foundation was inadequate to decide the applicable higher rate in writ proceedings, the assessment could not be finally sustained on that record. The assessment orders were therefore set aside and the matter remitted for fresh consideration after obtaining relevant information and hearing the taxpayer.

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Issues: Whether the petitioner's restaurant turnover could be assessed at the higher rate applicable to one star hotel services under the Tamil Nadu Value Added Tax Act, 2006, and whether the impugned assessment orders were liable to be set aside and remitted for fresh consideration.

Analysis: The dispute turned on whether the restaurant and kitchen registered in 2008 formed part of the one star hotel service obtained in 2009, or whether they were independent verticals with separate facilities for restaurant service and lodging-related food service. The material before the Court did not conclusively establish whether there was a separate kitchen and dining area for the hotel guests, and the finding that the restaurant and bar services were interlinked remained unsubstantiated. In the absence of adequate factual discussion and supporting material, the Court held that a categorical finding on the applicable rate could not be recorded in writ proceedings.

Conclusion: The impugned assessment orders were set aside and the matter was remitted to the respondent for fresh orders after obtaining relevant information and giving the petitioner an opportunity of hearing.

Ratio Decidendi: Where the applicable tax rate depends on a disputed factual issue as to whether a business segment formed part of a classified hotel service, and the record is insufficient to answer that issue conclusively, the assessment may be set aside and remitted for fresh determination.

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