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IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD

THE HONOURABLE SRI JUSTICE P.SAM KOSHY

AND

THE HONOURABLE SRI JUSTICE

SUDDALA CHALAPATHI RAO

Writ Petition No.28414 of 2008

Dated: 30.12.2025

Between:

M/s.Marriott Hotels India Limited,

Unit 2-4, Dynasty Business Park A,

Andheri Kurla Road, Andheri (East),

Mumbai – 400 059.

Rep by its Director Mr.Rajeev Menon and another.

…Petitioners

AND

The Assistant Commissioner (CT),

VAT Management Unit II,

Secunderabad Division, Hyderabad and others.

…Respondents

ORDER : (per Hon’ble Sri Justice P.Sam Koshy)

Heard Mr.A.Venkatesh, learned senior counsel representing

Mr.Vaddendra Joshi and Mr.Swaroop Oorilla, learned Special

Government Pleader for State Tax. Perused the record.

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2. The instant is the writ petition which has been filed

assailing the order dated 10.11.2008 passed by respondent No.1 for

the assessment year 2006-07 to 2008-09.

3. Petitioner No.1 - M/s.Marriott Hotel India Limited which

is in the supply of food and beverages, by virtue of an operating

agreement dated 02.01.2006 entered into with the petitioner No.2

i.e., M/s.Viceroy Hotels Limited started operating the hotel

business. However, the Department subsequently found that all the

bills that were raised in the process of operating the said business

by petitioner No.1 were issued in the name of petitioner No.1 itself

and therefore entire turnover would get added to the business of

petitioner No.1 for which the they would be liable to pay tax under

the APVAT Act (as it then was). On the contrary, the contention of

the petitioner No.1 was that since they were only operating the

hotel which ultimately was owned by petitioner No.2 i.e.,

M/s.Viceroy Hotels Limited and the revenue that was generated

was been transferred to the petitioner No.2 and it was petitioner

No.2 who was paying the tax to the authorities under the VAT Act

and since petitioner No.2 was paying taxes, petitioner No.1 could

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not have been made to pay the tax again as was demanded by the

authorities. It was this order passed by respondent No.1 dated

10.11.2008 which was under challenge in the present writ petition.

4. One of the primary contentions raised by the petitioner

was that the entire proceedings drawn by the respondents stands

vitiated as the very audit and the subsequent inspections and

assessment carried out were all without proper authorization as it is

required. Learned senior counsel for the petitioner relied upon the

decision of this High Court itself in the case of M/s.Sri Balaji

Flour Mills v. Commercial Tax Officer II, Chittoor and others, 2010 SCC OnLine AP 1187 to

canvas the arguments that the entire proceedings drawn by the

respondents being vitiated for want of proper authorization.

5. Taking into consideration the pleadings that have come on

record, more particularly from the respondents, there does not seem

to be any dispute so far as petitioner No.2 - M/s.Viceroy Hotels

limited having paid tax of Rs.2,23,16,321/- to respondent No.2 for

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the relevant assessment period. There also does not seem to be any

dispute by either of the parties so far as the total turnover is

concerned. The only question that arouse was whether the

respondent authorities were justified in demanding the tax from

petitioner No.1 i.e., M/s.Marriott Hotels India Limited, when the

petitioner No.2 had already paid the tax against said turnover said

to have been received by the petitioner No.1 - M/s.Marriott Hotel,

though, learned Special Government Pleader would only say that it

is only Rs.2.23 lakhs of tax that has been paid by petitioner No.2

against total tax liability of Rs.3,16,45,202/-. The issue which is

also raised by the petitioners was that the very audit which was

conducted by the Department followed by the inspection and

assessment done were of without authorization at all stages. This

aspect also is not in dispute so far as the stand of respondents are

concerned of the audit inspection and assessment of being done

without proper authorization.

6. In the given factual matrix, we