Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Krishnan Ramasamy, J.
Tvl.Green Star Recreation Club, Rep by its Secretary - Petitioner
Versus
The State Tax Officer, Anupparpalayam Assessment Circle and ors. - Respondents
W.P.Nos.34656, 34661, 34665, 34670, 34676 & 34679 of 2024 & W.M .P.Nos.37583, 37585, 37590, 37592, 37597, 37598, 37605, 37606, 37607, 37609, 37612 & 37613 of 2024
Decided On : 07-04-2025
| Table of Content |
|---|
| 1. challenge to inspection authority. (Para 1) |
| 2. authority of inspection and requirement of documentation. (Para 2 , 3) |
| 3. petitioner's readiness to comply and response to allegations. (Para 4 , 5) |
| 4. inspection powers vs. exemption from tax. (Para 6 , 7 , 8) |
| 5. remand for fresh consideration and submission of documentation. (Para 9) |
| 6. final order disposing the writ petitions. (Para 10) |
ORDER :
Krishnan Ramasamy, J.
These writ petitions have been filed challenging the impugned orders dated 23.09.2024 passed by the respondent.
2. The learned Senior counsel appearing for the petitioner would submit that in these cases, the respondent had conducted the inspection at the petitioner's premises on 21.06.2023. After the said inspection, a show cause notice was issued by the respondent, whereby they had called for the following documents:
| Item No. | Description | |
|---|---|---|
| i) | Income Tax returns filed for the | FY 2018-19 |
| ii) | Profit and Loss account and balance sheet for the | FY 2018-19 |
| iii) | Purchase and Sales details for the | FY 2018-19 |
| iv) | FL3 Register for the | FY 2018-19 |
| v) | Bank Statement for the | FY 2018-19 |
| vi) | Details of club members Registration details (old & new) |
3. Further, he would submit that except the calling for the aforesaid records, the respondent had not raised any other allegations, against the petitioner, with regard to the sale of liquors to the outsiders, who are other than its members. However, the petitioner had not filed any reply for the said show cause notice. Under these circumstances, the impugned order came to be passed by the respondent.
4. Per contra, the learned Special Government Pleader and the learned Standing counsel appearing for the respondents would submit that there is no dispute on the aspect that the petitioner is exempted from payment of tax for the sale of liquors to its members. However, it does not mean that the respondent has no power to inspect the petitioner's premises and verify as to whether any sale has been made to the outsiders, other than its members. Due to some suspicion, the respondent had conducted a surprise inspection at the petitioner's premises and thereafter, issued a show cause notice calling for the aforementioned documents. However, the said documents were not produced by the petitioner. Under these circumstances, the impugned order came to be passed. Hence, he requests this Court to pass appropriate orders.
5. In reply, the learned Senior counsel appearing for the petitioner would submit that now the petitioner is ready to furnish all the documents and hence, he requests this Court to set aside the impugned orders.
6. Heard the learned Senior counsel for the petitioner and the learned Special Government Pleader and the learned Standing counsel appearing for the respondents and also perused the materials available on record.
7. In the cases on hand, there is no dispute on the aspect that the petitioner, being a social club, is exempted from the payment of tax for the sale of liquor to its members. However, due to some suspicion, the respondent had conducted a surprise inspection at the petitioner's premises. After the said inspection, they issued a show cause notice to the petitioner calling for some documents as stated above. However, the petitioner had neither filed their reply nor produced the said documents. Under these circumstances, the impugned order came to be passed by the respondent.
8. As contended by the respondent, though the petitioner is an exempted entity, it does not mean that the respondent has no power to inspect the petitioner's premises. Hence, when the respondent sought for some documents, it is the duty of the petitioner to provide the same before the respondent for scrutiny. In the absence of those documents, the respondent will not be able to conclude the issue.
9. Further, it was submitted by the petitioner that now, they are intend to file all the documents, which were sought for by the respondents. Therefore, considering the submissions made by the petitioner and in the int
AI
Authorities can inspect and request documents from exempt entities if there's suspicion of non-compliance, and parties must be given a chance to respond to allegations.
Social clubs are exempt from tax on liquor sales to members, but any allegations against them must be substantiated by evidence.
A director's right to inspect company records is absolute and cannot be denied without clear evidence of improper intent or ulterior motives.
Procedural lapses in the constitution of inspection teams under the Himachal Pradesh Excise Act invalidate administrative actions, emphasizing the necessity for adherence to established legal framewo....
An inspection order under the Telangana Cooperative Societies Act must be founded on justifiable grounds within the order itself, not influenced by external parties.
Directors hold an absolute right to inspect company records under the Companies Act 2016, which cannot be impeded without clear proof of improper purpose.
Only a Joint Commissioner can authorize inspections under the GST Act, and there is no requirement to disclose the authorization details to the taxable person, though they must be informed of its exi....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
