2012 (12) TMI 1174 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of the Kerala Tax on Luxuries Act, 1976 u/s 17A, constitutionality of the Act, applicability of the Act to a society owning an auditorium, imposition of penalty orders.

Interpretation of the Kerala Tax on Luxuries Act, 1976 u/s 17A:
The petitioner, a society owning an auditorium, challenged the imposition of penalty orders u/s 17A of the Act, contending that the Act is inapplicable to them. The Act mandates the levy of luxury tax on any luxury provided in places like auditoriums used for conducting functions, with a rate of charges exceeding Rs. 150 per day. The court held that the petitioner's provision of amenities like electricity and water supply for various functions constitutes a luxury as defined under the Act, attracting the provisions of section 4(1)(i) of the Act.

Constitutionality of the Act:
The petitioner also sought a declaration that the Act is unconstitutional and beyond the legislative competence of the State. However, the court noted that a previous judgment had upheld the constitutionality of the Act, rendering this issue non-res integra.

Applicability of the Act to a society owning an auditorium:
The petitioner argued that the Act does not apply to them as they do not provide accommodation for residence. The court interpreted the Act's provisions, emphasizing that the term "accommodation" is not limited to residence alone but includes any provision meeting a need. As the petitioner rents out their auditorium for various functions and provides amenities, they fall within the definition of luxury under the Act, making them liable for luxury tax.

Imposition of penalty orders:
While dismissing the writ petitions challenging penalty orders, the court granted the petitioner an opportunity to pursue the statutory remedy under section 7 of the Act. The court directed the petitioner to file appeals against the penalty orders within one month, allowing them to present their factual contentions before the appellate authority.

Separate Judgement:
In a separate judgment, W. P. (C) No. 28685 of 2009 was dismissed as the petitioner had already availed of the appellate remedy against the penalty order. In W. P. (C) No. 32917 of 2009, the petitioner was permitted to pursue the appellate remedy against penalty orders, similar to the leading case, within a specified timeframe.