2024 (2) TMI 1469 - HC - GST

Tax Reduction for Bar Attached Hotels Upheld, Review Petition Dismissed Under Existing Regulatory Framework for FL3 Licensees

STATE OF KERALA, DEPUTY COMMISSIONER-1 SPECIAL CIRCLE, JOINT COMMISSIONER (APPEALS) STATE GOODS AND SERVICE TAX, DEPUTY COMMISSIONER (RECOVERY) STATE GOODS AND SERVICE TAX ERNAKULAM Versus PERUMBAVOOR HOTELS AND RESORTS PVT. LTD

HC dismissed review petition challenging previous judgment on FL3 licensees' tax liability. Court found no error in original ruling regarding tax ... Review of Judgment and Order - error apparent on the face of the record or not - interest on delayed payment of turnover tax - HELD THAT:- Review jurisdiction is to be exercised in a very limited manner where there an is error apparent on the face of the record. This Court has considered each and every document and the submissions while rendering the Judgment HARBOUR HOTELS, MEENACHIL HOTELS AND RESORTS PVT. LTD., THE RIVER RETREAT - NILA RESORTS, MEADOWS INTERNATIONAL (A UNIT OF CHALAKUDY HOTELS PVT. LTD.), HOTEL ABAAM PEARL, PRANAMAM HOTELS AND RESORTS PVT. LTD., HOTEL HIGHWAY CASTLE, KMA RESORTS PVT. LTD, PUSHPAK GRANDE, M.K.R. ENTERPRISES, CORNICHE HOSPITALITY (P) LTD., M/S. HOTEL VIRAD, HOTEL SKY PARK, SPRINGDALE HOTELS PVT. LTD., M/S. J.K. RESIDENCY, SANTHOSH KUMAR N.P, JLT ENTERPRISES, HOTEL CINNAMON, VAZHAKKULAM HOTELS AND RESORTS PVT. LTD., PERUMBAVOOR HOTELS AND RESORTS PVT. LTD, JAIRAJ LODGE, HOTEL MERIYA VERSUS STATE OF KERALA, STATE TAX OFFICER-1, JOINT COMMISSIONER (APPEALS), DEPUTY COMMISSIONER OF STATE TAX, COMMISSIONER, KERALA STATE GST DEPARTMENT, ASSISTANT COMMISSIONER. (ARREAR RECOVERY) [2023 (11) TMI 1305 - KERALA HIGH COURT]. Furthermore, these documents were not part of the pleadings. Review does not mean rehearing or appeal. There has to be finality to a litigation. This Court, based on the submissions, documents and evidences, has rendered the Judgment sought to be reviewed. Therefore, there are no error apparent on the face of the record which warrants this Court to reconsider this Judgment under review. There is no substance in this review petition and the same is here by dismissed. Issues:Review of Judgment and Order dated 30.11.2023 in writ petitions, Liability of FL3 licensees for interest on delayed filing of returns and payment of turnover tax, Error apparent on the face of the record regarding reduction of tax from 10% to 5% for Bar attached Hotels, Interpretation of Cabinet decision on reduction of turnover tax, Exercise of review jurisdiction based on error apparent on the face of the record.Analysis:The High Court considered a review petition seeking review of the Judgment and Order dated 30.11.2023 passed in a batch of writ petitions, including W.P.(C) No. 42733 of 2022. The Court had previously held that FL3 licensees who filed returns by 31.03.2022 and cleared turnover tax by 30.04.2022 for specific periods during the financial years 2020-21 and 2021-22 would not be liable to pay interest for delayed filing and payment. The review petitioner, the Special Government Pleader, argued that there was an error on the record as the reduction of tax from 10% to 5% was not limited to sales during the Covid lockdown period but applied from 2014-15 to 2015-16 as per the Cabinet Note. The petitioner contended that Bar attached Hotels were required to pay 10% tax but could claim a refund of 5%, making them liable for interest on delayed payment. The petitioner relied on the Cabinet decision and relevant documents to support their argument.On the other hand, the respondent's counsel argued that the Cabinet decision and subsequent notification required Bar attached Hotels to pay 5% turnover tax, similar to retail outlets run by the Beverages Corporation. The respondents had remitted the tax within the extended time for filing returns and payment. The Court noted that all aspects were considered, and there was no error on the face of the record necessitating a review of the Judgment dated 30.11.2023. The Court emphasized the limited scope of review jurisdiction, stating that it does not entail rehearing or appeal but requires an error apparent on the record, which was not found in this case. The Court highlighted the need for finality in litigation and dismissed the review petition for lack of substance.In conclusion, the High Court dismissed the review petition seeking reconsideration of the Judgment and Order dated 30.11.2023. The Court found no error apparent on the face of the record regarding the reduction of tax from 10% to 5% for Bar attached Hotels during specific periods. The Court upheld its previous decision based on a thorough consideration of the submissions, documents, and evidence presented. The Court reiterated the limited scope of review jurisdiction and the importance of finality in litigation, emphasizing that a review is not meant for a rehearing or appeal but to rectify errors on the record, which were absent in this case.