Observing that private hotels and clubs cannot claim parity with state-owned TASMAC liquor retail outlets as they purchase Indian Made Foreign Liquor from them and sell it at much higher prices, Madras High Court has dismissed petitions by hotels and clubs in Virudhunagar and Karur districts against additional tax on them for sale.
Justices S Manikumar and V M Velumani said the petitioners could not equate themselves with TASMAC outlets and complain of being discriminated against as they purchase IMFL from THEM and sell it for much higher price. Hence, they are bound to pay the additional tax for selling it through their outlets.
They pointed out that a division of Madras High Court at Chennai, comprising Chief Justice Sanjay Kishan Kaul and M M Sundresh, had already given a decisive decision on the issue.
The judges noted that the petitioners' customers and those
at TASMAC were two different categories. The petitioners were also not prevented from doing business. So there was no violation of Article 19(1)(g) of the Constitution, which conferred the right to carry on any business, the judges said.
The judges pointed out that profits of TASMAC went to the state's coffers and are spent on welfare measures. The higher tax on hotels and clubs was not violative of Article 14 (equality before law), since a mere classification per se could not be termed as arbitrary.
"Revenue and economic considerations in taxing statute are permissible classifications," it added.
The judges agreed with the state government counsel that additional taxation was a policy decision taken by it to prevent revenue loss to the public exchequer.
