LI Network
Published on: December 04, 2023 at 13:19 IST
The Kerala High Court declared tax demands on petroleum products and Indian-made foreign liquor before March 26, 2022, invalid due to the absence of prescribed rates.
Justice Dinesh Kumar Singh observed that though parcel sales were permitted, the rates were not prescribed until the March 26, 2022 notification.
The petitioner, a bar-attached hotel, held FL3/FL11 licenses for Indian-made foreign liquor sales. The Kerala State Beverages Corporation (KSBC) monopolized sealed bottle sales from retail outlets. An annual return anomaly led to a tax demand of Rs. 22,49,821, contested by the petitioner.
The court emphasized that Section 5 of the Kerala General Sales Tax Act provides a tax regime for petroleum products and liquor.
The lack of prescribed rates during specific periods affected FL3/FL11 licensees, creating uncertainty about the applicable tax rate. The court ruled any uncertainty in the legislative scheme could invalidate the tax levy.
Case Title: Sreevalsam Residency v. State of Kerala, Case No.: WP(C) NO. 32408 OF 2023