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TMI Blog2014 (7) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... is a charitable trust with philanthropic objects as set out in the trust deed dated December 29, 1970 and it is duly registered under the Madhya Pradesh Public Trust Act. The present petitioner has challenged the assessment and levy of the tax under the provisions of the aforesaid Act, first by respondent No. 1/the Commercial Tax Officer, Circle-15, Indore and then by the Deputy Commissioner of Commercial Tax Division-I, Indore, in revision passed by the impugned order dated July 12, 2005, confirming the assessment and levy of the tax under the provisions of the Luxury Tax Act, 1988. Counsel for the petitioner has vehemently urged the fact that levy and confirmation of the luxury tax under the said Act is illegal, bad in law and without jurisdiction since in the present charitable trust, running a Dharmashala is incidental to its main activity of running a hospital and by no stretch of imagination it can be said to be "business" as a "hotelier" within the meaning of the said Act. And hence, counsel submitted that the impugned order be set aside considering that sections 2(c) and (e) of the Luxury Tax Act, 1988 define: "2(c). Hotel includes a residential accommodation, a lodging h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng admission forms to the students does not amount to business within the meaning of section 2(e) of the U.P. VAT Act and the petitioner was beyond the purview of U.P. VAT Act. And the counsel urged that similar analogy would be applicable in the present case. The counsel relied on the matter of Commissioner of Sales Tax v. Sai Publication Fund [2002] 126 STC 288 (SC); [2002] 258 ITR 70 (SC), to state that the trust was created by devotees of Saibaba of Shiridi, with object of spreading the message of Saibaba and the apex court held that affirming the decision of the High Court (i) that a person would not be a "dealer" under section 2(11) in respect of the goods sold or purchased by him unless he carried on the business of buying and selling of such goods. Similarly in the matter of Sri Palani Dhandayuthabani Devasthanam v. Commercial Tax Officer, Palani Circle II, Palani [2001] 124 STC 553 (Mad) under the same heading of luxury tax the High Court of Madras held that definition of business in the Sales Tax Act cannot to be adopted for temple administrated by executive officer under the Religious Endowments Act and renting accommodation to devotees by the temple did not amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with sections 2(d) and 2(a), the charge or levy of tax is attracted only if an entertainment takes place in a specified place or locations and persons are admitted to the place on payment of a charge. And counsel submitted that in the present case also a hospital is distinct from hotel under the charging sections 2(c) and 2(e) was not chargeable or amenable to tax under the Luxury Act. Finally, counsel relied on the matter of State of Tamil Nadu v. Board of Trustees of the Port of Madras [1999] 114 STC 520 (SC) where the apex court was considering the term carrying on business of the port trust at Madras. The apex court held that it is not merely the act of selling or buying, etc., that constitutes a person a "dealer" but the "object" of the person who carries on the activity is important, it is not every activity or any repeated activity seriously undertaken which results in sale or supply of goods that would attract sales tax. If it was the intention of the Legislature of tax every sale or purchase irrespective of the object of the activities out of which the transactions arose, then it was unnecessary to state that the person must "carry on the business" of selling, buying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than sixty rupees Nil (b) is sixty rupees or more but does not exceed one hundred and fifty rupees 5% of the turnover (c) is more than one hundred and fifty rupees 10% of the turnover (2) Where, in addition to the charges for luxury provided in a hotel, service charges are levied and appropriated by the hotelier and not paid to the staff, then such charges shall be deemed to be the part of the charges for luxury provided in the hotel. (3) The tax shall be levied and collected at the rates specified in sub-section (1) on the charges actually paid to the hotelier for such luxury. (4) The tax shall be levied and payable in respect of the turnover for supply of food and drinks, where they are not separately charged for and on the sale of which the hotelier is liable to pay tax under the (Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995))." We have already, reproduced section 2(c) which defines a "hotel" and section 2(e) which defines "luxury" provided in a hotel. We fully agree with the contention put forth by the counsel for the petitioner that a hospital cannot be termed as hotel by any stretch of imagination. Moreover placing reliance on Malankara Orthodox [ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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