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TMI Blog2013 (8) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11A of the Karnataka Tax on Luxuries Act, 1979 (for short, "the Act") has called in question the order dated May 24, 2010 made in STA No. 350/2007 by the Karnataka Appellate Tribunal, Bangalore, whereby, an appeal filed by the petitioner-society under section 9 of the Act, arising from the order passed by the first appellate authority dated March 12, 2007, came to be dismissed. The first appellate authority had partly allowed the appeal filed against the order of assessment dated December 28, 2006, under section 6(1) of the Act read with rule 6(2) of the Karnataka Tax on Luxuries Rules, 1979 (for short, "the Rules") passed by the Assistant Commissioner of Commercial Tax (Transition) (for short, "Luxury Tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payment except the donations. The petitioner in response to the notice dated November 20, 2006, had filed their objections on December 26, 2006. They did not admit their liability to pay tax on the donations. Their claim in response to the notice, in brief, is as under:- 1. The taxable collection is at ₹ 3,90,000 and rest ₹ 33,561 are non-taxable. 2. Current charges collected over and above 3. Rental and spent for that purpose. 4. Sree Veerashiva Kshemabivrudi Nidhi fund collection voluntarily. 5. ₹ 27,500 collected exclusive as a contribution for community welfare fund and donation is again independent voluntarily payment. On the basis of materials placed on record, the Luxury Tax Officer, vide order dated D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the petitioner and the provisions of section 3C of the KTL Act, 1979 prescribing a levy of luxury tax on the charges collected for the luxury of a marriage hall read with section 2(1A) of the KTL Act, 1979, the Tribunal was right in holding that the petitioner was liable to pay tax under section 3C on voluntary contributions by members towards corpus of the society, collection of rent for certain functions which was below the taxable minimum of ₹ 5,000 and collection towards electricity charges at actual?" At the outset, we observe that the learned counsel appearing for the petitioner did not advance any submissions insofar as the collection towards electricity charges is concerned. The only contention urged by Mr. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted that the claim of the petitioner-society deserves to be rejected outright. Before we consider the merits of the contentions urged, it would be advantageous to reproduce the relevant provisions contained in sections 2(1A) and 3C of the Act, to the extent it is necessary, which read thus:- "(1A) 'Charges for marriage hall' include charges for air-conditioning, chairs, utensils and vessels, shamiana, electricity, water, fuel, interior or exterior decoration or any amount received by way of donation or charity or by whatever name called in relation to letting out the marriage hall but do not include any charges for food and drinks ; 3C. Levy and collection of tax on charges for marriage hall.- Subject to the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Though such submission was made, no material whatsoever was placed in support thereof at any point of time either before the authorities below or even before this court. On the other hand, it is clear from the record and on verification of books of accounts that the donors/the persons who booked and used the marriage hall were the same. It appears from the record that they paid donations after using the marriage hall instead of paying it before. Merely because it was shown by the petitioner-society that the donations were paid after use of the marriage hall, it cannot be stated that it was not in relation to letting it out. On the contrary, it is clear from the materials on record and as observed by the Luxury Tax Officer that the donors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marriage hall to any person is not charged at all, or is charged at a concessional rate, then the tax on such luxury, shall be levied and collected as if full charges for such luxury were paid to the proprietor of the marriage hall. Section 4AA was inserted by Act No. 5/2001 with effect from April 1, 2001. Insertion of this section in the Act has changed the complexion of section 3C of the Act. Under that provision, as it stood prior to April 1, 2001, no tax could be levied if the charges were less than ₹ 5,000 per day. In other words, the marriage halls which were charging less than ₹ 5,000 per day were not coming within the purview of the charging section. To overcome the mischief, the Legislature seems to have introduced sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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