The Madras High Court Bench here has dismissed writ petitions filed by hotels and clubs in Virudhunagar and Karur districts against additional taxation imposed on them for sale of liquor compared to amount of tax levied on retail outlets of Tamil Nadu State Marketing Corporation (Tasmac).
A Division Bench of Justices S. Manikumar and V.M. Velumani refused to entertain the petitions in view of a decisive decision rendered on the same issue by the First Division Bench of Chief Justice Sanjay Kishan Kaul and Justice M.M. Sundresh in the Principal Seat of the High Court in Chennai on March 31.
The First Bench had held that hotels and clubs could not equate themselves with outlets of Tasmac and complain of being discriminated by the State since they purchase Indian Made Foreign Liquor (IMFL) from Tasmac and sell it at a much higher price compared to prices fixed for sale at Tasmac outlets.
“The customers of Tasmac and the petitioners form two different categories based upon their socio-economic status… Admittedly, the petitioners are not prevented from doing business. Therefore, there is no violation of Article 19(1)(g) of the Constitution which confers the right to carry on any business,” the judges said.
“The petitioners cannot claim parity after having purchased the liquor from Tasmac which is an instrumentality of the State and the sole authority for selling liquor to the petitioners. The profit earned by Tasmac goes to the coffers of the State and is meant to be used for welfare measures,” they added.
The Bench held that higher tax on hotels and clubs could not also be held to be in violation 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.
Further, agreeing with the State that additional taxation was a policy decision taken by it to prevent loss of revenue to the public exchequer, the judges said: “Such a decision is not required to be tested by a court of law with a suspicious and microscopic eye.”
