TaxTMI 
TaxTMI 
2026 (5) TMI 1081
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.... 15695, 15700, 15708, 15710, 16287, 16292, 16304, 16310, 16315, 16341, 16345, 16352, 16357, 16364, 16368, 16375, 16369, 16383, 16390, 16395, 16400, 16402, 16409, 16412, 16414, 16418, 16455, 16456, 16460, 16470, 16476, 16495, 16501, 16505, 16517, 16535, 16626, 16637, 16643, 16648, 16656, 16688, 16696, 16704, 16708, 16713, 16719, 16724, 16706, 16722, 16726, 16729, 16744, 16751, 16755, 16759, 16763, 16896, 16905, 17667, 17679, 17690, 17693, 17756, 17768, 17771, 17775, 17200, 17202, 17991, 18709, 18712, 21394, 26369, 26373, 27411, 27418, 27419, 27423 and 28870 of 2025 and W.M.P.Nos.4838, 4839, 4840, 7444, 7445, 7446, 7447, 7449, 7450, 7454, 7457, 7458, 7491, 7493, 7494, 7499, 7501, 7502, 7506, 7507, 7508, 4853, 4856, 4858, 4854, 4859, 4860, 5190, 5194, 7441, 7442, 7443, 7510, 7511, 7512, 21267, 21268, 21270 of 2024, 14706, 14707, 14729, 14730, 14732, 14733, 14735, 14736, 14738, 14739, 14741, 14742, 14744, 14746, 14987, 14988, 14994, 14995, 14998, 14999, 15003, 15004, 15007, 15009, 15014, 15016, 15021, 15025, 15023, 15024, 15028, 15029, 15033, 15034, 15039, 15040, 15152, 15153, 15157, 15158, 15166, 15167, 15181, 15182, 15193, 15197, 15198, 15200, 15203, 15204, 15209, 15210, 15216, 15219....
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.... of 2025, W.P.No.13513 of 2025, W.P.No.13520 of 2025, W.P.No.13530 of 2025, W.P.No.13543 of 2025, W.P.No.13545 of 2025, W.P.No.13550 of 2025, W.P.No.13557 of 2025, W.P.No.13562 of 2025, W.P.No.13568 of 2025, W.P.No.13847 of 2025, W.P.No.13853 of 2025, W.P.No.13858 of 2025, W.P.No.13863 of 2025, W.P.No.13901 of 2025, W.P.No.13907 of 2025, W.P.No.13917 of 2025, W.P.No.13921 of 2025, W.P.No.13922 of 2025, W.P.No.13924 of 2025, W.P.No.14382 of 2025, W.P.No.14388 of 2025, W.P.No.14390 of 2025, W.P.No.14395 of 2025, W.P.No.14396 of 2025, W.P.No.14413 of 2025, W.P.No.14415 of 2025, W.P.No.14418 of 2025, W.P.No.14422 of 2025, W.P.No.14425 of 2025, W.P.No.14652 of 2025, W.P.No.14657 of 2025, W.P.No.14661 of 2025, W.P.No.14668 of 2025, W.P.No.14673 of 2025, W.P.No.14952 of 2025, W.P.No.15701 of 2025, W.P.No.15713 of 2025, W.P.No.15718 of 2025, W.P.No.15723 of 2025, W.P.No.15726 of 2025, W.P.No.29205 of 2025, W.P.No.15172 of 2025, W.P.No.15174 of 2025, W.P.No.15179 of 2025, W.P.No.15192 of 2025, W.P.No.15196 of 2025, W.P.No.15359 of 2025, W.P.No.15364 of 2025, W.P.No.15371 of 2025, W.P.No.15375 of 2025, W.P.No.15404 of 2025, W.P.No.15415 of 2025, W.P.No.16078 of 2025, W.P.No.16107 of 2025, W.....
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....hezhian, Umapathi, Joseph Vincent, Elanchezhian, Rajaguru, Joseph Vincent, Alagar, N. Kokila, N. Murugan, Mohan, A.R. Prakash, Kamaraj, Baskar, Kannan, Moorthy, S.Babu, Antony Savarimuthu, Siriyadurai, P. Jegan, Sankar, S. Babu, Mohanraj, Gopinath, Kannan, Thirunavukkarasu, Balachandar, Udhayakumar, Sukumar, Radhakrishnan, Sampath Kumar, Narayanan, Vigneshwaran, Siva, Ravi, Dayalan, Babu, Vijesh, Selvaraj, Parthiban, Thondiraj, Pandiyan, Damodaran, Dhanasekar, Rajagopal, Jebaselvan, Sathishkumar, K.Ayyanar, Mugish Prem, Pradheep Kumar, Elumalai, Thomas, Vasudevan, Senthil, Yuvaraj, Yatheesh, Sathish Kumar, Rajagopal, Velu, K.Ayyanar, Saravanan, T. Suresh, Manikandan, Suresh, Velmurugan, Shanmuganandam, Ramanathan, Ayyanar, Baskar Raj, Balasubramanian, Dhanraj, Govindaraj, Raj Pakthasingh Asir, Arumugam, M. Johna, K.K. Gandhi, Parthiban, C. Dharmaraj, P. Danasekar and M. Vinothbabu Versus The Managing Director, Tamil Nadu State Marketing Corporation Limited, The District Manager, Tamil Nadu State Marketing Corporation Limited; S.Parthiban, P. Jegan, S.Parthiban, R.D. Veerasamy, J.Deenadhayalan, S.Ramesh Versus The State of Tamil Nadu and The Tamil Nadu State Marketing Corporation Li....
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....pecial Government Pleader For the R3 in W.P.No.14952 of 2025: Mr. S. Gurumoorthy Senior Standing Counsel For R3 in W.P.Nos.15723 and 15726 of 2025: Mr. Sai Srujan Tayi Senior Standing Counsel For R3 in W.P.No.15701 of 2025 : Mr. A. P. Srinivas Senior Standing Counsel COMMON ORDER In these batch of Writ Petitions, the Petitioners, who are licensees to operate Bars attached to TASMAC retail Shops under Rule 9B of the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 [formerly 9(A)] have challenged the respective impugned Notices passed by the 2nd Respondent, the District Manager, Tamil Nadu State Marketing Corporation [hereinafter referred to as TASMAC]. 2. Details of the respective impugned Notices issued to the respective Petitioners by the District Manager, TASMAC are tabulated below in Table-1:- Table-1 Sl. No. Writ Petition Date of the impugned Notice 1 4486 of 2024 07.02.2024 2 13407 of 2025 08.03.2025 3 13404 of 2025 18.03.2025 4 13398 of 2025 17.03.2025 5 13401 of 2025 17.03.2025 6 13397 of 2025 17.03.2025 7 13392 of 2025 17.03.2025 8 13388 of 2025 17.03.2025 ....
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....25 74 15371 of 2025 17.03.2025 75 15375 of 2025 17.03.2025 76 15404 of 2025 15.03.2025 77 15415 of 2025 17.03.2025 78 16107 of 2025 18.03.2025 79 16078 of 2025 18.03.2025 80 16126 of 2025 17.03.2025 81 15648 of 2025 18.03.2025 82 15695 of 2025 15.03.2025 83 15700 of 2025 15.03.2025 84 15708 of 2025 15.03.2025 85 15710 of 2025 15.03.2025 86 16341 of 2025 18.03.2025 87 16345 of 2025 15.03.2025 88 16352 of 2025 18.03.2025 89 16357 of 2025 06.07.2024 90 16364 of 2025 18.03.2025 91 16368 of 2025 18.03.2025 92 16375 of 2025 18.03.2025 93 16287 of 2025 18.03.2025 94 16292 of 2025 18.03.2025 95 16304 of 2025 06.07.2024 96 16310 of 2025 06.07.2024 97 16315 of 2025 06.07.2024 98 16369 of 2025 17.03.2025 99 16383 of 2025 18.03.2025 100 16390 of 2025 18.03.2025 101 16395 of 2025 18.03.2025 102 16400 of 2025 18.03.2025 103 16402 of 2025 08.03.2025 104 16409 of 2025 18.03.2025 105 16412 of 2025 18.03.2025 106 ....
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.... respective Bar Licences issued to them will be cancelled if they don't obtain GST registration under the provisions of the Central Goods and Service Tax Act, 2017 and Tamil Nadu Goods and Service Tax Act, 2017 (hereinafter referred to as the respective GST Enactments, 2017) by the due date specified in the respective impugned proceedings. 5. For the sake of clarity, text of the impugned Notice(s) issued by the District Manager, TASMAC is reproduced below:- "டாஸ்மாக் லிட் காஞ்சிபுரம் (வடக்கு) மாவட்டத்திற்குட்பட்ட மதுபான சில்லறை விற்பனை கடைகளுடன் இணைந்த மதுக்கூடங்களுக....
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....86;ிக்கப்படவில்லை எனில் இ-டெண்டர விதிகளின்படி தங் களுக்கான மதுக்கூடஉரிமம ரத்து செய்ய நேரிடும் என தெரிவிக்கப்படுகிறது." 6. These Bar licences were issued for a period of two years. In all of these cases, the licences would have already expired on 31.12.2025. Therefore, these Writ Petitions have become infructuous as on date of this Order. 7. In few other Writ Petitions in Table-2 below, the respective Petitioners have challenged the terms and conditions set forth in the respective Tender Notifications issued for the period from November 2023 to October 202....
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....will be reopened after payment of all pending dues with interest @ 12% P.A. and related GST also. 9. Since the licence period under the above Tender Notification(s) also would have already expired as on 31.12.2025, the Writ Petitions in Table-2 are liable to be dismissed as they have also become infructuous as on the date of this order. I see no point to render a separate verdict on the subject, as the issue is academic at this distant point of time. 10. Therefore, the Writ Petitions in Table-1 and Table-2 are liable to be dismissed and are accordingly dismissed. 11. In the following Writ Petitions in Table-4, the respective Petitioner(s) have challenged the Show Cause Notice(s) / respective Assessment Order(s) issued under Section 74 of the respective GST enactments by the Superintendent of GST & Central Excise for the Tax Periods from 2017-2018 to 2022-2023 as detailed below: Sl. No. Writ Petition Show Cause Notice No. / Date Reply to the Show Cause Notice Order-in-Original No. Date of the Assessment Order Tax demanded/ proposed 1. 14952 of 2025 29/2024-GST (SUPDT-HPU)/03.08 .2024 03.09.2024 06/2025-GST (SUPDT-R-II) 01.02.2025 17....
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....e charge mechanism for the period July 2017 to March 2023 as per the regulations stated in the bar license notice that the taxpayer has to make 99% of the monthly license payment to the State Government and 1% to TASMAC. Since, the taxpayer is paying 99% of the bar license amount to the State Government (SBI Treasury Branch), the taxpayer is liable to pay GST under RCM for the receipt of license service from the State Government. 1% of the monthly license amount to the TASMAC will not attract GST under RCM because TASMAC is neither Central Government, State Government, Union Territory or Local Authority. 12. As per Notification No.25/2019-CT dated 30.09.2019 effective from 01.10.2019 issued under 7(2) of the CGST Act, 2017, the activity undertaken by State Government by way of services of grant of alcoholic liquor license shall be treated neither as supply of goods nor as supply of services. But the above taxpayer has paid license fee for allotment of bar to the State Government to run the bar operation which is primarily sale of eatables and used bottles and has no connection with the grant of alcoholic liquor license. Hence, it appear that the taxpayer is liable....
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....ls available on record. On perusal of the documents submitted by M/s.TASMAC vide their letter dated 12.03.2024, I find that the taxpayer Shri S.Ramesh has made the payments to the State Government and TASMAC during the period 2018-19 to 2022-23. As per the bar license notice, the taxpayer has to make 99% of the monthly license payment to the State Government (SBI Treasury Branch) and 1% of the monthly license payment to TASMAC. Accordingly, the payments made by Shri S. Ramesh to the State Government and TASMAC during the period 2018-19 to 2022-23 is tabulated below:- Shop No.4079 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Total Taxable Value 69,498 - 752341 171350 523873 542025 2059087 GST (CGST + GST) 12,510 - 135421 30843 94297 97565 370635 17. Hence, I hold that the submission made by the taxpayer with respect to differential turnover as per Income Tax Returns cannot be accepted as the statutory body (TASMAC) for distributing licenses for running bar and selling snacks etc., had furnished the data that during the period of 2017-18 to 2022-23. M/s. S. Ramesh has paid the above-mentio....
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....ith interest payable thereon under Section 50 and a penalty equivalent to fifty per cent of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded". 14. The discussion in the respective impugned Assessment Orders of some of the Writ Petitions are in slight variance with the discussion extracted above. However, the reasonings are same. 15. The GST liability has been confirmed against some of the Petitioners, where the observations that these Writ Petitioners have not responded to the summons issued to furnish the turnover details in order to determine the eligibility of registration threshold turnover of the tax payer, and therefore to protect the revenue, on best judgment, the taxpayer's aggregate turnover is treated as more than Rs. 20,00,000/- in all the financial years, and hence the taxpayer is liable to pay GST under Reverse Charge Mechanism (RCM) for the services received from the State Government of Tamil Nadu. SUBMISSIONS ON BEHALF OF THE PETITIONERS: 16. The learned Counsel for the Petitioners would submit that TASMAC is a body corporate under the provisions of the Companies Act, ....
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....ivilege of running bars, the appellant has not authorized private parties to vend liquor in the shops, which are annexed to the retail vending shops. It is no doubt true that the Retail Vending Rules empower the appellant to vend liquor not only in the shops established by them, but also in the bars. But, the factual scenario in the State of Tamil Nadu is that in the retail vending shops, vending along is permissible and in the bars attached to the retail vending shops, a facility is provided for consumption of liquor thereby the liquor purchased in the retail 4 vending shops is taken by the customer to be consumed inside the premises and this is with a view to prevent the customer to consume liquor in the open area causing nuisance to the general public. 16. Therefore, the use of the expression 'running bars' in Rule 9A of the Retail Vending Shops, in our considered view, is a misnomer. This is so because the Retail Vending Rules also permit the licenses to be used by certain categories of establishments where they are permitted to vend liquor and allow the persons to consume the liquor within the same premises. Some examples are certain categories of hotels, resorts, etc....
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....arried out only in terms of Section 619(3)(b) of the Companies Act, 1956. 19. Therefore, the Tribunal was right in concluding that the activities assigned and performed for the period in dispute can never be treated as a sovereign function or a statutory right or an activity performed by a Public Authority under the authority of law. The Tribunal also took note of the circulars issued by the Central Board of Excise and Customs dated 23.08.2007 and 18.12.2006, which clarified that if a Sovereign/Public Authority provides a service, which is not in the nature of a statutory activity and if the same is undertaken for a consideration, which is not a statutory fee, then, in such cases, service tax would be leviable as long as the activity undertaken falls within the scope of taxable service as defined. Even when a Governmental Authority performs a service, which is not in the nature of a statutory activity, the same has to be held leviable to service tax and this view is supported by the decision of the Karnataka High Court in the case of Karnataka Government Insurance Department Vs. ACCE, Bangalore [reported in (2012) 26 STR 521]. This decision has been followed by a learned S....
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....wherein an issue arose as to whether Hindustan Steel Ltd. was a "Department of the Government for the purpose of Article 13 of the Constitution of India". There, the appellant had contended that since Hindustan Steel Ltd. was entirely financed by the Government and it's management was directly the responsibility of the President, the post was virtually under the Government of India. 27. Taking note of the English Case Laws, and that of the Hon'ble Supreme Court in other cases, the Hon'ble Supreme Court in Dr. S. L. Agarwal Vs. General Manager, Hindustan Steel Ltd. (referred to supra), after stating that the decision of the English Court in Tamlin Vs. Hennaford [(1950) 1 KBD 18] was relied in its earlier decisions in Ram Babu Rathaur Vs. Divisional Manager, Life Insurance Corporation of India [AIR 1961 All 502] and Damodar Valley Corporation Vs. Provat Roy [(1957) 1 LLJ 223], the Hon'ble Supreme Court observed as follows:- "In our judgment these differences rather accentuate than diminish the applicability of the principle laid down in the English case to our case. The existence of shareholders, of capital raised by the issuance of share, the lack of connection between t....
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....e same. They are required to obtain GST registration as a condition for complying with the terms and conditions of the Tender Notification and batch the express terms of the contract. It is submitted that it is in this background, the licence fees issued are proposed to be cancelled. 33. Specifically, the learned counsel for the TASMAC drew the attention to Condition No.4 of the tender document of the bar licence issued to the Petitioners. A reference was made to the same in the case of K. Tamilalagan Vs. The Managing Director and Another in W.P.No.4496 of 2021, which reads as follows:- 34. The learned counsel for the Central Revenue, on the other hand would submit that there is a difference between the operation of TASMAC as the wholesale dealer and retail dealer of liquor, which are brewed and distilled in the State of Tamil Nadu or those which are marketed and sold through the retail outlets of TASMAC. 35. It is submitted that by virtue of Rule 9B of the aforesaid Rules, the activity carried out by TASMAC was as an agent of the Government, and since 99% of the amount payable as per Rule 9B is directly paid by the licencees like Petitioners to the Government, the Petitio....
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....ein. The Notification is, therefore, held to be prospective. Secondly, the Notification can never be held to be retrospective or clarificatory because if at all a privilege is granted in favour of a private party, it can be only prospective and it is not the case of the assessee that the said Rule was inserted to validate past actions. Therefore, to term that Rule 9A is clarificatory in nature is an argument, which is stated to be rejected and we do not agree with the submission made by the learned counsel for the appellant that the benefit granted by the Tribunal for the period from April 2013 to till date by making the appellant/assessee liable to pay service tax on 1% of the revenue retained by them as agency commission can be extended for the period from July 2012 to March 2013. For the above reasons, the third substantial question of law is answered against the assessee." 38. It is submitted that in the context of Finance Act, 1974, TASMAC was made liable to pay tax on the 1% of the Commission retailed. It is submitted that the Petitioners who are recipients of such service are not liable to pay tax on reverse charge basis. A reference was made to the decision of the Divisi....
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....s and Railways; (c) services in relation to an aircraft or vessel; and (d) transport of goods and passengers. 46. It is submitted that the activity in question does not fall within any of the aforesaid excluded categories. 47. It is further submitted that the activity covered under the Rule 9B of the aforesaid Rules, is purely commercial in nature and is carried out by the State Government through its agency, namely the Respondents TASMAC. Hence, the same is liable to GST. 48. It is submitted that Rule 9B of the aforesaid Rules itself unequivocally establishes the agency relationship between the Petitioners and Respondents, by providing for an agency commission of 1% to the Respondents TASMAC, while the remaining 99% of the licence fee is retained by the State Government. This clearly demonstrates that the licence is issued by the Government through its agent for consideration. 49. It is further submitted that the licence under Rule 9B of the aforesaid Rules cannot be equated with a licence for vending alcoholic liquor. The licensee is neither permitted to sell liquor nor conferred with any statutory or sovereign right. The licence is confined to comme....
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....ht; and 43. The GST Council and the Government have clearly demarcated the scope of exemption by restricting it only to regulatory liquor licences granted by the State, and not to commercial privileges, as clarified in Notification No. 25/2019-CT (Rate) dated 30.09.2019 read with Circular No. 121/40/2019-GST. 54. The Petitioners assertion that no GST is leviable on TASMAC bar licence fee is wholly unsustainable. The impugned Order-in-Original has correctly held that the licence fee constitutes consideration for a taxable supply. The Petitioners cannot seek to invalidate the assessment by relying on inapplicable precedents from the pre-GST or distinguishable contexts. 55. It is further submitted that the request for interim relief or stay is devoid of merit. The assessment has been completed in accordance with law, after issuance of Show Cause Notice and affording sufficient opportunity to the Petitioners. The Petitioners, having failed to participate in the adjudication proceedings, cannot now seek equitable relief before this Court. No prima facie case, balance of convenience, or irreparable injury has been established to warrant grant of interim relief. 56. It i....
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....3. A reading of the Assessment Orders and the Show Cause Notices challenged in the respective Writ Petitions, as detailed in Table-4, indicates that they were passed in the absence of cooperation from the respective Petitioners. The Petitioners failed to furnish the requisite documents necessary for determining the turnover. Consequently, the Assessment Orders were passed, and the Show Cause Notices were issued against the respective Petitioners. 64. Under the provisions of the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003, the TASMAC is empowered to grant license to operators like the Petitioners to operate bars, to collect empty bottles and to sell eatables (short eats / snacks) in such licensed bars situated adjacent to the TASMAC shops. 65. Rule 9A (presently Rule 9B) was inserted to the Tamil Nadu Liquor Retail (in Shops and Bars) Rules, 2003 by virtue of G.O.Ms.No.20 of 2013, Home Prohibition and Excise (VI) Department dated 29.03.2013. 66. Rule 9B (formerly Rule 9A) as introduced by G.O.Ms.No.20 of 2013, Home Prohibition and Excise (VI) Department dated 29.03.2013, is a statutory mechanism to grant to privilege to run bars by the private parties t....
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....the Petitioners towards tender amount / licence fee is to be made in the mode prescribed under the Tender Conditions i.e., Condition No.7 of the respective Tender Conditions which are extracted as under:- TERMS AND CONDITIONS OF THE BAR TENDER (a) The monthly demand amount will be the highest amount quoted by the successful bidder in tender. The said monthly demand amount will be a fixed throughout the tender period. The fixed monthly demand will not change with quantum of sales or for any other reasons. (b) 99% of the monthly demand amount is to be paid to the account of the SBI treasury branch through online mode. GST and other applicable taxes will have to be paid by the bider on 99% of the monthly demand amount. The copy of the remitted challan should be submitted immediately to District Manager Officer, TASMAC Limited. (c) 1% of the monthly demand amount is to be paid to the account of the District Manager, TASMAC through online mode only. (d) The bidder upon issuance of license will have to make the payment towards the monthly demand amount in advance as indicated in clause 7, 7b and 7c, of this Agreement on or before 5th of the every month. Failure which lead ....
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....t of the tax: (***) (7) Without prejudice to the provisions of sub- section (6), if the person responsible for collecting tax does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple [interest- (a) at the rate of one per cent for every month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which such tax is collected; and (b) at the rate of one and one-half per cent for every month or part thereof on the amount of such tax from the date on which such tax was collected to the date on which such tax is actually paid, and such interest shall be paid] before furnishing the quarterly statement for each quarter in accordance with the provisions of sub- section (3): (***) Section 206CC- Requirement to furnish Permanent Account Number by collectee (1) Notwithstanding anything contained in any other provisions of this Act, any person paying any sum or amount, on which tax is collectible at source under Chapter XVII-BB (herein referred to as collectee) shall furnish his Permanent Account Number to the person responsible for col....
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....ar licenses are granted to licensees to sell eatables and for collection of empty bottles left by consumers. By the bar license, the bar licensees are entitled to monetise the left over bottles by consumers. Bar license is given as per Rule 9A of the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003. 23. The petitioner as an agency merely collects the tender amount from the successful tenderer and remits the same to the Government on or before 25th date of the following month while retaining 1% of the amount so collected as its agency commission. In this connection, relevant clauses of the terms and conditions of the licenses issued to the licensees are referred to the activities relating to collection of the empty bottles. They read as under:- "22. Whereas the license is granted only for the sale of eatables and collection of empty bottles in the Bar. Otherwise, the Bar will be under the full control of TASMAC. The staff appointed by the TASMAC will supervise the Bar and its activities. The key for the Bar shall be under the custody of TASMAC. 24. The contractor should collect only the empty bottles left behind by the customers of their ow....
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.... to the consumption of liquor in bars in the State of Tamil Nadu stands elaborately considered in S.Jagannathan Vs. The Managing Director, Tamil Nadu State Marketing Corporation Limited and another, W.P.Nos.27352 of 2021 etc., batch vide order dated 31.01.2022. 80. Paragraphs 40 and 41 of Jagannathan's Case (supra) recorded the submissions filed by the Respondents TASMAC, and the same are extracted below for the sake convenience:- "40. Appeaering on behalf of the respondents TASMAC, the learned Advocate General explained the business model of the respondents TASMAC and submitted that respondents TASMAC was merely outsourcing the work of clearing the used bottles by the consumers and facilitating the consumers to consume alcohol along with the short eats / side dish etc., to be sold in the premises next to the retails shops of TASMAC under Rule 4 of the Tamil Nadu Liquor Vending (in Shops and Bars) Rules, 2003. 41. It is submitted that the Tender conditions are stringent and are required to be complined by every successful bidder and that only the successful bidders are entitled to sell short eats and collect the empty / used bottles during period of the license." 81.....
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....ndustrial or such like purpose. Thus, consumption of liquor for intoxication is not falling under the exceptions. 88. It was later extended throughout the Madras Presidency in 1948. In 1949, an exception was given to members of armed force. A provision was also made to exempt British officials from the Prohibition restriction. A system to grant permits to individuals who consumed foreign liquor was given to allow the Britishers to consume liquor. 89. The Governor had given an order that all Europeans who apply for liquor licence be granted despite such restrictions, people could however travel to areas within the Presidency where the Prohibition was not in force for consumption of liquors. 90. A system was also invited to regulate licensed clubs for sale and consumption of wine for religious purposes in Churches and brandy in Hospital for Medical purposes. Licenses were also given for toddy tapping as it was accepted then. 91. A reading of the pre-amble of the Tamil Nadu Prohibition Act, 1937 makes it clear that the Act is in consonance with the Directive Principle of State Policy under Article 47 of the Constitution of India which enjoins State ....
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....s first introduced in the year 1989 under the Tamil Nadu Liquor (Retail Vending) Rules, 1989. It was allowed to facilitate consumption of liquor in the bars attached to private 'wine shops". These bars were run by private persons under a license by the Commissioner of Prohibition and Excise. 102. On 21.04.1992, by G.O.Ms.No.90, the Government ordered the auction of retails vending shops throughout the State. In 1992-1993, the Government of Tamil Nadu decided as a policy to give Bar licence to the retail shops in order to augment revenue from auctions of retails shops. 103. ..... 104. By G.O.Ms.No.99, Prohibition and Excise Department, dated 26th May, 1992, the Government of Tamil Nadu introduced the Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 for regulating the issue of license and the privilege of retail vending of liquor in the Bar. The Rules came into force on 1st June, 1992. 105. Under Rule 4(a) of the aforesaid Rules, a person holding a licence granted under Rules 13 of Retail Vending Rules, 1989 was allowed to file an application for grant of privilege and licence for retail vending of liquor in the Bar. These bars are different f....
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....ount and Refund) Rules, 1994 vide G.O.Ms.No.155, Prohibition and Excise (VI), dated 30.9.1994. 126. Under the aforesaid Rules, Bar Licence issued under Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 was deemed to have been renewed and privilege was granted for the period from 1st June, 1993 to 30th June, 1993. Where any licensee had paid an amount in excess of the privilege amount specified in Rule 4, such amount was to be refunded by the licensing authority to the licensee, after deducting the Government used if any, under the rescinded Rules. This was at the time when license and privileges were given to private persons to run wine shops & bars. 127. In Madras City Wine Merchants' Association Vs. State of Tamil Nadu, (1994) 5 SCC 509, the Hon'ble Supreme Court held that "When the State has received complaints that the consumption of liquor in bars resulted in law and order problems, woman folk being harassed, certainly, in public interest it could take a decision to repeal the grant of Bar licenses. There is nothing unreasonable." 128. In 2003, when Section 17-C (1-B) was introduced from the Tamil Nadu Prohibition Act, 1937 along and Section 22-D....
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....aging a person to consume alcohol in public space and violate the sanctions under the law. 161. The practice of respondents TASMAC to allow mushrooming of "Bar" within the meaning of Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 is contrary to the provisions of the Tamil Nadu Prohibition Act, 1937. 162. Till the law is amended, and proper rules are framed which are in tune and consistent with the provisions of the Tamil Nadu Prohibition Act, 1937, the respondents TASMAC shall refrain from granting licenses / permits to the petitioners and others to do the support service or the business in the sale of short eats or collecting used bottles. 163. The respondents TASMAC may therefore take suitable steps to recall the tender called for instead of encouraging violating of law by its consumers. Commercial expediency to garner profit cannot justify the continuance of the Bar. 164. The respondents TASMAC is therefore directed to take steps to close down the Bars attached to the TASMAC shops wherever licenses have been issued to a section of the bidders, within a period 6 months. 165. These Writ Petitions are dismissed with the....
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....Constitutional Court can issue a writ of mandamus to a legislature to enact a law on a particular subject in a particular manner. The Court may, at the highest, record its opinion or recommendation on the necessity of either amending the existing law or coming out with a new law. The law has been laid down in this behalf in several decisions including a decision of this Court in the case of Supreme Court Employees' Welfare Association -vs-Union of India [(1994) 4 SCC 189] and State of Jammu and Kashmir -vs-A.R.Zakki [(1992) Supp (1) SCC 548]. The only exception is where the Court finds that unless a rule making power is exercised, the legislation cannot be effectively implemented." Consequently, the impugned order insofar as it relates to the directions issued in para nos.155 to 165 are concerned, are alone set aside and it is made clear that no view has been expressed by this Court on those aspects of the matter, meaning thereby that the challenge to the policy of the State in granting the privilege of running bar is left open. Since the period of the impugned tender from 01.01.2022 to 31.12.2023 would lapse shortly, it may not be appropriate to proceed further with the i....
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....ing of liquor products in their retail shops under the provisions of the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003. 94. The sale of food items and collection of used and empty bottles are strictly not to be governed by the provisions of the Tamil Nadu Prohibition Act, 1937, although by virtue of amendment to Tamil Nadu Liquor Retail Vending (In Shops and Bars) Rules, 2003 vide G.O.Ms.No.20, Home Prohibition and Excise (VI) Department dated 29.03.2013, Rule 9A (presently Rule 9B) has been inserted. DISCUSSION ON NOTIFICATIONS 95. As per Notification No.25/2019-Central Tax (Rate) dated 30.09.2019, supply of service by way of grant of alcoholic liquor licence against consideration undertaken by a State Government in which the State Government is engaged as a public authority, is neither a "supply of goods" nor a "supply of service". For the sake of clarity, the text of the relevant portion of the aforesaid Notification is extracted as under:- G.S.R......(E).- In exercise of the powers conferred by sub-section (2) of section 7 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Coun....
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....supplier shall be liable to be registered under this Act in the State or Union Territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: 1. Every supplier making a taxable supply of goods or services or both in the State shall be liable to be registered under this Act if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided that where such person makes taxable supplies of goods or services or both from any of the Special Category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. Provided further that where such person makes taxable supplies of goods or services or both from a Special Category State in respect of which the Central Government has enhanced the aggregate turnover referred to in the first proviso, he shall be liable to be registered if his aggregate turnover in a financial year exceeds the amount equivalent to such enhanced turnover. Provided also that the Government may, on the recommendations of the council, enhance the aggregate turnover ....
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....the respective GST Enactments, inserted vide Finance (No.2) Act, 2019 (23 of 2019) dated 01.08.2019 with effect from 01.01.2020, the above threshold of Rupees Twenty Lakh could be enhanced to Rupees Forty Lakh per annum by the Government on the recommendation of the GST Council in case of a supplier who is "exclusively engaged in supply of goods", subject to such conditions and limitation, as may be notified. 102. Explanation to Section 22(1) of the respective GST Enactments further enumerates the categories of persons who shall be deemed to be engaged "exclusively in the supply of goods". 103. As per the above Explanation, even if a person is engaged in exempt supply of services by way of extending deposits, loans or advances insofar as the consideration is represented by way of interest or discount, the said person shall be considered to be engaged "exclusively in the supply of goods". 104. To implement the object of 3rd Proviso to Section 22(1) of the respective GST Enactments, Notification No.10 of 2019-Central Tax dated 07.03.2019 has been issued by the Central Government. The scheme of Notification No.10 of 2019-Central Tax dated 07.03.2019 can be summarised as under....
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....e tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table; (iii) persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand; and (iv) persons exercising option under the provisions of sub-section (3) of section 25, or such registered persons who intend to continue with their registration under the said Act. Table Sl. No. Tariff item, sub-heading, heading or Chapter Description (1) (2) (3) 1 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa 2 2106 90 20 Pan masala 3 24 All goods, i.e. Tobacco and manufactured tobacco substitutes 2. This notification shall come into force on the 1st day of April, 2019. 108. Prima facie, the respective Petitioners appear to be eligible for the above exemption from GST Registration under Notification No.10 of 2019-Central Tax dated 07.03.2019 and therefore they may be exempted from obtaining registration and consequenly from payment of GST. 109. However, ....
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....28.06.2017 is extracted as below:- G.S.R......(E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:- Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent) Condition (1) (2) (3) (4) (5) 7. Chapter 99 Services provided by the Central Government, State Government, Union Territory or Local Authority to a business entity with an aggregate turnover of up to twenty lakh rupees (ten lakh rupees in case ....
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..... 118. Under Notification No.13/2017-Central Tax (Rate) dated 28.06.2017, a "Business Entity" which are not exempt from obligatory registration under Section 22 of the Respective GST Enactments and who is not indirectly eligible for exemption from payment of tax under Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, is liable to pay under reverse Charge Mechanism as the recepient of service. and wherever, such service are provided to such a "Business Entity" by the Central Government, the State Government, the Union Territory and/or the Local Body. I shall deal with Notification No.13/2017-Central Tax (Rate) dated 28.06.2017 at some length later. 119. Under the above Notification, tax is payable by recepient on Reverse Charge Mechanism (RCM) for service provided by the Central Government, or the State Government, or the Union Territory or the Local Body, in a taxable territory to a "Business Entity". However, Respondent TASMAC cannot be equated on par with the State Government. I shall explain the position in the course of the discussion in this Order. 120. While, the expression "Business Entity" has been defined in Paragraph 2 Clause (n) to Notification No.12/....
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....the course or furtherance of his trade, profession or vocation; [(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and] (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities; 123. Thus, only supply of service by the "Central Government", the "State Government", the "Local Bodies" and the "Union Territory" to a "Business Entity" with an aggregate turnover of up to Rupees Twenty Lakhs in the preceding financial year alone has been exempted vide SI.No.7 to Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. 124. The above Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 has been issued to ensure that persons who are exempt from statutory GST registration under Section 22 of the respective GST Enactments are not burdened with tax, as incidence of GST like under any other indirect tax is not passed on to the recepient. 125. Similarly, under Notification No.13/2017-Central Tax (Rate) dated 28.06.2017 certain categories of services supplied by the "Central Gov....
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....53) of the respective GST Enactments. For the sake of clarity, the expression 'Government' as defined in Section 2(53) of the respective GST Enactments are reproduced below:- Definition Section 2(53) of the CGST Act, 2017 Section 2(53) of the TNGST Act, 2017 "Government" means the Central Government. "Government" means the Government of Tamil Nadu. 131. Thus, the expression "Government" means the "Central Government" and the "Government of Tamil Nadu" in the State of Tamil Nadu. The expression "Central Government" has not been defined under the respective GST Enactments. 132. Therefore, it will be useful to refer the definitions of 'Central Government' and 'State Government' in the General Clauses Act, 1897. The expression 'Central Government' and 'State Government' are defined in Section 3 of the General Clauses Act, 1897. 133. The expressions 'Central Government' and 'State Government' have been defined in Section 3(8) and Section 3(60) of the General Clauses Act, 1897. They are reproduced below:- Definition Section 3(8) of the General Clauses Act, 1897 Section 3(60) of the General Clauses Act, 1897 "Central Government" shall,- (a) in relati....
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....rritory, the Central Government; and shall, in relation to functions entrusted under article 258A of the Constitution to the Government of India, include the Central Government acting within the scope of the authority given to it under that article; 134. Thus, the expression 'State Government' refers to the Governor in relation to a State, and to the Central Government in relation to a Union Territory. 135. Under Article 77 of Constitution of India, all the executive action of the Government shall be expressed to be taken in the name of the President. 136. Similarly, under Article 166 of the Constitution of India, all the executive action of the Government of a State shall be expressed to be taken in the name of the Governor. For the sake of clarity, Articles 77 and 166 of Constitution of India are reproduced below:- Article 77 Article 166 77. Conduct of business of the Government of India 166. Conduct of business of the Government of a State (1) All executive actions of the Government of India shall be expressed to be taken in the name of the President. (1) All executive action of the Government of a State shall be expressed to be ....
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....ipality Vs. Indian Tourism Development Corpn., reported in (1995) 5 SCC 251 (ii) Shrikant Vs. Vasantrao, reported in (2006) 2 SCC 682 (iii) Paschimanchal Vidyut Vitran Nigam Ltd. Vs. Raman Ispat (p)., reported in (2023) 10 SCC 60. 141. In Dum Dum Municipality Vs. Indian Tourism Development Corpn., reported in (1995) 5 SCC 251, the Hon'ble Supreme Court observed that, in the case of major public utilities, statutory corporations were created under different enactments, and further went on to illustrate specific instances as follows :- 21. ... With a view to enable these statutory corporations and companies to carry on the activity which was hitherto carried on by the Governments, the relevant properties, assets and liabilities were transferred to such new corporations. They were supposed to operate on business lines, pay taxes and justify their creation and constitution. These corporations, whether created under the statute or registered under the Companies Act are distinct juristic entities owning their own properties, having their own fund, capable of borrowing and lending monies and entering into contracts like any other corporation. In many cases, t....
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....he gratuity fund" under Section 36(4), which excludes these enumerated amounts from the liquidation, especially clarifies that not all dues owed under statute are treated as "government" dues. In other words, dues payable to statutory corporations which do not fall within the description "amounts due to the Central or State Government" such as for instance amounts payable to corporations created by statutes which have distinct juristic entity but whose dues do not constitute government dues payable or those payable into the respective Consolidated Funds stand on a different footing. Such corporations may be operational creditors or financial creditors or secured creditors depending on the nature of the transactions entered into by them with the corporate debtor. On the other hand, dues payable or requiring to be credited to the Treasury, such as tax, tariffs, etc. which broadly fall within the ambit of Article 265 of the Constitution are "government dues" and therefore covered by Section 53(1)(f) IBC. 51. PVVNL undoubtedly has government participation. However, that does not render it a government or a part of the "State Government". Its functions can be replicated by othe....
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....ct and appropriate any tax, duty, toll, cess or fee, by whatever name called; (b) "municipal fund" means any fund under the control or management of an authority of a local self-government established for discharging civic functions in relation to a Metropolitan area or Municipal area and vested by law with the powers to levy, collect and appropriate any tax, duty, toll, cess or fee, by whatever name called;] (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted under article 371 [and Article 371J] of the Constitution; or (g) a Regional Council constituted under Article 371A of the Constitution; 148. Since, this dispute is not concerned with the definitions of 'Local Authority' and 'Union Territory' in Sections 2(69) and 2(114) of the respective GST Enactments, no views are expressed. 149. In my view, the Respondents, Tamil Nadu State Marketing Corporation (TASMAC) is neither a Central Government nor a State Government or a Union territory or a Local Authority within the meaning of Sl.N....
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.... a 'Union territory' or a 'Local Authority', TASMAC supplied services to these Petitioners. 156. Since TASMAC is not a "Government" within the meaning of Section 2(53) of the respective GST Enactments (CGST Act, 2017 and TNGST Act, 2017), the demands confirmed by the impugned Orders in Sl.Nos.1 to 6 to Table-4, as well as the demand proposed by the Show Cause Notice in Sl.No.7 to Table-4, are unsustainable. 157. Therefore, the impugned Assessment Orders confirming the proposals in the Show Cause Notices that preceded the respective impugned Assessment Orders at Sl.Nos. 1 to 6 to the Table-4, and the impugned Show Cause Notice at Sl.No.7 to Table-4 seeking to levy tax on 99% of the License Fee directly paid by the respective Petitioners to the Government cannot sustain under the above Notification No.13/2017-Central Tax (Rate) dated 28.06.2017, as the supply of services by the Respondent TASMAC to the respective Petitioners is outside the purview of the above Notification as the Respondent TASMAC is not a State Government. 158. The Petitioners may have been eligible for exemption under Section 22 of the Respective GST Enactments read with No.10 of 2019-Central Tax dated 07.....