2013 (11) TMI 1580 - HC - VAT and Sales Tax

Summary

Issues involved: The judgment deals with the scope of definition of "marriage hall" under the Karnataka Tax on Luxuries Act, 1979, and the validity of Section 3-C read with Section 2(5-B) of the Act in relation to luxury tax on industrial exhibitions held at Bangalore International Exhibition Centre.

Details of the Judgment:

Issue 1: Scope of Definition of "Marriage Hall"
The petitioner, an apex body of the machine tool industry, challenged the notices charging luxury tax on the facility at Bangalore International Exhibition Centre. The petitioner argued that the facility does not fall under the definition of "marriage hall" as per the Act and should not be liable for luxury tax. The petitioner also contended that the impugned notices were invalid and sought a declaration of non-liability under the Act.

Issue 2: Validity of Section 3-C and Definition of "Marriage Hall"
The Senior Counsel for the petitioner highlighted the charging section (Section 3-C) and the definitions of "marriage hall" and "luxuries" under the Act. The counsel argued that the authority issuing the notices had no basis to levy luxury tax on space rent, irrespective of the petitioner's status as a marriage hall. The Government Advocate, on the other hand, defended the legality of the endorsements and the constitutionality of the amendments to the definition of "marriage hall."

Judgment Summary:
The Court noted that the petitioner was aggrieved by the endorsements to register under the Act and pay luxury tax. It observed that an exemption was granted post-amendment for industrial exhibitions, but the period before the exemption raised questions on the petitioner's liability. The petitioner agreed to register under protest for the relevant period pending consideration of its replies to the notices.

The Court directed the competent authority to consider the petitioner's replies, including any additional submissions, in light of the amended definition of "marriage hall" and relevant circulars. The petitioner was given the opportunity to file additional replies within a specified timeframe. The judgment disposed of the writ petition with directions for registration under protest, reply consideration, and left the constitutional validity issues open for future determination.