TaxTMI 
TaxTMI 
2015 (12) TMI 1630
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....r only buys the provisions, cooks and supplies to the MFL employees on subsidise basis. The object of the said notification is not to tax canteens, which are subsidized as a welfare measure. On 22.03.2003, when the Enforcement Officers conducted an inspection, the books of accounts were not made available, though regularly maintained. On receipt of the proposals from the Enforcement Officers, the Respondent issued a notice dated 22.4.2004, proposing to levy purchase tax and penalty and subsequently, the taxes were paid for MFL coupon receipts. Thereafter, further notice dated 20.05.2004 was issued, proposing to levy penalty under Section 12(3)(a) of the TNGST Act, to which, the Petitioner filed their objections, dated 30.05.2004, stating that the purchases were only from the registered dealers and sales tax was not paid, because there was subsidised supply by MFL as a welfare measure and there was no sale to employees and that there was only a catering service. On 28.05.2004, a further reply was given. The Respondent, by another notice dated 07.06.2004, directed the Petitioner to produce the purchase details. The Petitioner appeared before the Respondent and produced all the docume....
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....the sales of food and drinks, etc. The petitioner had been served with pre-assessment notice proposing to levy tax and penalty and in response to that, the petitioner sent his objections. After giving opportunity to the Petitioner and considering the objections, the assessment was completed. The Petitioner has got alternative remedy to prefer a statutory appeal. In such circumstances, these Writ Petitions are liable to be dismissed. 4. The learned counsel for the Petitioner submitted that the impugned assessment was made, without examining the books of accounts and the evidence of MFL, as to the extent of supplies as per the certificate given dated 2.6.2005 and that the Respondent erred in ignoring the fact that the statutory canteens, run under obligation and subsidised by the employers, are completely exempted by Notification No.336 dated 17.09.1964. The learned counsel for the Petitioner further submitted that the assessment imposing penalty under section 12(3) of the TNGST Act is contrary to Explanation in section 12(3) of the TNGST Act and that the Petitioner is ready to pay the taxes as per the books of accounts and actuals under the provisions of the Tamil Nadu General Sale....
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....ees on cooperative basis on behalf of the employer. The further requirement to be satisfied, before the benefit of that notification can be claimed, is that running of such canteen must be under a statutory obligation without profit motive and the employer should subsidise at least 25% of the total expenses incurred in running the canteen. 11. The question herein is whether the petitioner is coming under the category of a canteen run on co-operative basis or not. Under similar circumstances, the Division Bench of this Court in 2003-132-STC-35 (Industrial Catering Services P Limited Vs. Commercial Tax Officer, Chennai), held as follows: "14. The notification does not refer to the particulars of the statute under which the employer may have been under an obligation to run the canteen. The terms of the statute, which creates an obligation, therefore, are not material for the purpose of testing the scope of the exemption. What is essential is that there must be an employer, who has employees for whose benefit a canteen is run, the running of such canteen being an obligation imposed on the employer by a statute and that canteen is run by the employer or by the employees on a co-operat....
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....employees, who run a canteen on co-operative basis for the benefit of their members, seek to make a profit at the cost of their members. In case the employer, who runs a canteen or the co-operative of the employees, who run it for the employer, run the canteen with a profit motive, they would be ineligible to claim the benefit of this notification." 12. Admittedly, in the case on hand, the Petitioner is an independent contractor and he is not running the canteen on cooperative basis. Therefore, the Petitioner is not entitled to claim exemption provided under the said notification dated 17.09.1964, as he did not satisfy the essential requirements laid down in the notification for claiming the benefit therefor. Further, since the Petitioner doing business has to produce the books of accounts, but the Petitioner did not maintain and produce the same, in the absence of original purchase bills, the Respondent assessed on the basis of the data available and passed the impugned order, the Petitioner is liable to pay tax. 13. Insofar as the imposition of penalty is concerned, in the impugned assessment orders, penalty has been levied at the rate of 150% which is the maximum. The assessin....