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TMI Blog1993 (2) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... er, Amusement Tax Section, Calcutta and an application for review of the order passed by the Commissioner of Agricultural Income-tax on January 6, 1992 in Appeal Case No. 28 A.T./90-91 was also rejected, thus confirming the original assessment order. 2.. The facts of the case are that Globe Theatres Pvt. Ltd. (petitioner No. 1) having its office at 7E, Nelly Sengupta Sarani, Calcutta 700 087, is a private limited company being the owner of the Globe Cinema and the petitioner No. 2 is its Cinema Manager and principal officer. The company had been making payment of luxury tax in respect of the two bars of its cinema from 1974, with arrears from 1972. Consequent upon amendment of the provisions of section 4 of the Act of 1972 in terms of the West Bengal Taxation Laws (Amendment) Act, 1985 indicating the rates of luxury tax payable in respect of restaurant and hotels, the company was notified of the same for compliance in May, 1985. Thereafter, the petitioners submitted a representation to the Agricultural Incometax Officer in April, 1987 seeking revision of the area to be covered by luxury tax since the air-conditioning of the second floor bar of the premises had been stopped. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ury tax and as such, the bars of Globe Cinema being bars of the same category have been wrongly subjected to luxury tax. This application for review was rejected by the Commissioner, Agricultural Income-tax, vide his order of June 2, 1992 and the earlier assessment and appellate orders were upheld. 3.. The applicants have in their present application prayed for a declaration that the imposition of luxury tax in respect of the two bars of the petitioner No. 1 is wholly illegal, unconstitutional and ultra vires the Act of 1972 and articles 14, 19(1)(g) and 265 of the Constitution of India and for setting aside the order of assessment dated May 4, 1990 as confirmed subsequently. The applicant's first objection is that under article 265 of the Constitution of India no tax can be levied and/or collected except by authority of law and in the instant case there is no provision for levy and/or collection of luxury tax in respect of the said two bars under the Act of 1972. Secondly, it is stated that similar bars in other cinema halls, namely, New Empire, Light House, Elite, etc., have not been assessed to such luxury tax at any point of time and hence the imposition of luxury tax only in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court judgment in the case of Express Hotels Private Ltd. v. State of Gujarat [1989] 74 STC 157. Nonetheless, Shri S.N. Bose, the learned Advocate for the respondents, drew our attention to the judgment in the case of Express Hotels Private Ltd. v. State of Gujarat reported in [1989] 74 STC 157 (SC) wherein the concept of a tax on "luxuries" in entry 62, List II of the Seventh Schedule was upheld as applicable to the imposition of a luxury tax on hotels and restaurants, while considering the constitutional validity of legislations of four different States, namely, Gujarat, Tamil Nadu, Karnataka and West Bengal imposing a tax on "luxuries" under entry 62 of List II of the Seventh Schedule to the Constitution which had been challenged. The Honourable Supreme Court had further held that in so far as section 4 of the West Bengal Act was concerned, the tax is envisaged on the mere existence of the provision for luxury and is leviable even if the luxury is not actually utilised, and that a luxury which can reasonably be said to be amenable to a potential consumption does provide the nexus. The argument that fundamental rights under article 19(1)(g) are violated by a levy on a mere p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof in respect of so much of the floor area of the restaurant which is provided with luxury; and (b) In the case of a hotel at such rate not exceeding 15 per centum on the daily charges of a room provided with luxury as may be notified by the State Government in the Official Gazette." From the above it would appear that for luxury tax to be leviable, in the first place there has to be a hotel or restaurant and secondly such hotel or restaurant has provision for luxury. That the bars of Globe Cinema do not come within the definition of "hotel" as defined in clause (ca) of section 2 of the Act of 1972 is not in dispute. What is, however, the subject of contention is whether these premises come within the definition of "restaurant" as defined in clause (h) of section 2 of the Act of 1972. 8.. Clause (h) of section 2 of the Act of 1972 reads as follows "'Restaurant' includes an eating house." Though the above definition can, by no means, be said to be lucid, it does make one thing obvious, namely, that whatever else may be understood by the term "restaurant", eating houses of all kinds would also be deemed to be restaurants for the purposes of the Act of 1972. The Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely, cinema goers with tickets or that no cooked food is served, as contended by the applicants, would not make any difference whatsoever. 10.. The further question that has to be examined is whether these premises are provided with luxury as contemplated in section 4 of the Act. Sub-clause (d) of section 2 of the Act of 1972 defines luxury as follows: "'Luxury' means provision for air-conditioning through air-conditioner or central air-conditioning or any other mechanical means provided in any of the rooms, or in any part of a building which constitutes a hotel or a restaurant." The applicants have admitted that air-conditioning was being used in the ground floor and second floor areas up to August 23, 1985 when it was discontinued following power rationing introduced as per Government orders. The impugned assessments relate to the period from July 25, 1972 to March 31, 1985. Such being the case, it has to be held that there was provision for air-conditioning during the relevant assessment period, being the subject-matter of this case. As for the period subsequent to March 31, 1985, this is a matter for the assessing authorities to consider and decide, taking into account t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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