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of <h1>Court allows Writ Petition, sets aside Assessment Order on infra lease. Emphasizes need for personal hearing and reasoned order.</h1> <h3>Manthan Educational Solutions Private Limited Versus Assistant Commissioner of State Tax</h3> Manthan Educational Solutions Private Limited Versus Assistant Commissioner of State Tax - TMI Issues:Assailing of Assessment Order under Telangana VAT Act, 2005 for specific services. Dispute over VAT levy on transportation, house-keeping, infra lease, and mess charges. Contention on VAT and Service Tax exclusivity. Challenge on VAT demand for mess charges. Lack of reasons in Assessment Order for VAT levy on infra lease and mess charges. Violation of principles of natural justice.Assessment Order Challenge:The petitioner challenged Assessment Order No.65175 dated 01.10.2020 under the Telangana VAT Act, 2005, focusing on VAT levy for services provided from March 2015 to June 2017. The petitioner, engaged in various services for a specific educational society, contended VAT payment on mess charges and service tax on rent were duly made as per relevant statutes until the introduction of the Goods and Services Tax Act, 2017.VAT Levy Dispute:The dispute arose when the 1st respondent issued a show-cause notice proposing a substantial VAT levy on transportation, house-keeping, infra lease, and mess charges. The petitioner objected to VAT imposition on transportation and house-keeping charges, arguing against VAT liability on lease rental amounts, having already paid service tax. The petitioner emphasized the mutual exclusivity of VAT and Service Tax, asserting VAT cannot be demanded if service tax is paid on the same item.VAT Demand on Mess Charges:Regarding mess charges, the petitioner contended VAT was correctly paid at 5% under Section 4(8) of the TS VAT Act, 2005, as its turnover on taxable sales was below the threshold. The petitioner argued that only consideration related to goods sales constituted taxable turnover, not the overall turnover mentioned in the Profit & Loss Account, which pertained to service provision.Lack of Reasons and Natural Justice:The petitioner challenged the Assessment Order's lack of reasoning for imposing VAT on infra lease and mess charges at a higher rate. The Court agreed that the 1st respondent, as a quasi-judicial authority, must provide reasons for decisions and cannot merely dismiss objections as unsatisfactory. This failure to provide reasons was deemed a violation of principles of natural justice.Judgment and Remittance:The Court partially allowed the Writ Petition, setting aside the Assessment Order concerning infra lease and mess charges. These aspects were remitted back to the 1st respondent for fresh consideration, emphasizing the need for a personal hearing for the petitioner and a reasoned order to be communicated. The Court highlighted the importance of providing reasons in decisions to uphold principles of natural justice, ultimately allowing the Writ Petition on these grounds.
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