Hotel Opts to Pay Sales Tax Under Regular Provisions; SC Upholds Kerala HC Ruling

The Supreme Court upheld the Kerala High Court ruling allowing a hotel to pay sales tax under regular provisions instead of the compounded basis. The hotel had opted for standard assessment under the state VAT laws, challenging departmental efforts to impose tax on a compounded basis. The court confirmed that a taxpayer’s choice to follow regular provisions must be respected and that the department cannot arbitrarily shift the assessment method. The ruling reinforces taxpayer rights and clarifies that revenue authorities must adhere to statutory options available to businesses. This decision is significant for hospitality and other sectors where tax calculation methods can materially affect liability.