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TMI Blog2016 (2) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned counsel for the petitioner to substantiate that the State legislature was not empowered to define the expression 'luxury in the banquet hall' under Section 2(k) in the statute. The definitions of various expressions under Section 2 of the Act and other substantive provisions of the Act are within the legislative competence and have not been shown to be contrary to any constitutional mandate. The services provided by the petitioner do fall under the said definition so as to be liable to levy of tax. Once there exists legislative competence in the State legislature to enact a provision, in the absence of the learned counsel for the petitioners to demonstrate that the same is arbitrary, discriminatory or violative of Article 14 of the Constitution of India, it cannot be declared to be unconstitutional. Thus the provisions of Explanation to Section 2(k) of the Act and also the other provisions of the Act to which an attempt has been made to assail as ultra vires, cannot be held to be beyond the legislative competence of the Haryana State Legislature or that they had exceeded its law making power or contravened any of the provisions of the Constitution of India on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the petitioner are no doubt banquet hall in terms of the definition under Section 2(c) of the Act still the same does not provide luxury in terms of Section 2(j) of the Act. The activity of the petitioner does not come under the purview of the Act and the service of letting out the space in any manner does not constitute 'luxury' under the Act. As long as the petitioner is letting out its space for marriages without providing any facility like air conditioning, air cooling, chairs, tables, utensils etc. for a consideration below ₹ 20,000/- per function, its subject activity cannot be termed as luxury. As far as provision for amenities is concerned, it is the option of the organizer to arrange of its own. The charges for amenities are bound to vary from function to function depending upon the type of arrangement and cannot be defined on uniform basis. According to the petitioner, in the present times, arranging marriage functions in a banquet hall is no more a luxury. Providing facility of performing a marriage in a marriage hall is a necessity. The services rendered by the petitioner are subject to service tax limited to the value of consideration received. One s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, live telecast or other amenities for a consideration below ₹ 20,000/- per function. 6. It was also contended that so far as the provision for amenities is concerned, it is exclusively the option of function organizer to arrange of his own. The charges for amenities keep on varying depending upon the type of arrangement and there cannot be any uniform basis for assessing it. The petitioner only enters into contract with the function organizer and does not exercise any control over the charges incurred by the other party for the amenities. The actual expenses incurred by the third party cannot be included in the threshold limit of ₹ 20,000/- for calculating luxury tax. As the third party is under no obligation to disclose the expenses incurred to the petitioner, therefore, no tax liability can be fastened on the petitioner for acts and omission of others which is unsustainable. 7. Continuing with his submissions, the Act was also assailed on the ground that the taxable event is when the services are offered and consideration is received. Under the Explanation to Section 2(k) of the Act, the charges incurred by the function organizer for the amenities gathered/arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) charges for banquet hall include charges for air cooling, air conditioning, chairs, tables, utensils and vessels, shamiana, tent, electricity, water, fuel, interior or exterior decoration, music systems, orchestra, live telecast, and the like and any amount received by way of donation or charity or by whatever name called in relation to letting out the banquet hall but do not include any charges for food and drinks; Explanation.- If any question arises whether any charges are charges for banquet hall, such question shall be referred to the State Government and decision of the State Government shall be final; (j) luxuries means services ministering to enjoyment, comfort or pleasure extraordinary to necessities of life ; (k) luxury provided in a banquet hall means accommodation or space provided in a banquet hall, the rate of charges for which (including charges for air cooling, air conditioning, chairs, tables, utensils and vessels, shamiana, tent, pavilion, electricity, water, fuel, interior or exterior decoration, music, orchestra, live telecast, or other amenities but do not include any charges for food and drinks) is twenty thousands rupees or more per occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished shall be maintained in full until the registration is cancelled. (6) Where a proprietor has more than one place of business, the registration shall cover all such places of business. The assessing authority shall issue, free of cost, copies of the registration certificates to the proprietor for exhibition at each of his places of business. (7) A proprietor registered under sub-section (1) shall be entitled to have his registration cancelled if he is able to prove to the satisfaction of the assessing authority that he has discontinued, transferred or otherwise disposed off his business. . (8) The assessing authority shall have power, for good and sufficient reasons, to cancel, modify or amend any registration certificate issued by it. (9) A registration certificate shall be personal to the proprietor to whom it is granted and shall not be transferable. Declaration of charges. 12. Every proprietor liable to pay tax shall declare the normal rate fixed for luxury provided by him in such manner and within such period as may be prescribed. 12. A perusal of the above provisions shows that luxury in a banquet hall means accommodation or space provided fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exhausted by these cases, illustrative of the 'concept'. The entry encompasses all the manifestations or emanations, the notion of 'luxuries' can fairly and reasonably be said to comprehend. The element of extravagance or indulgence that differentiates 'luxury' from 'necessity' can not be confined to goods and articles. There can be elements of extravagance or indulgence in the quality of services and activities. 15. In the light of earlier judgment of the Supreme Court in Western India Theatres Limited vs. Cantonment Board, Poona Cantonment, 1959(2) Supp. SCR 63 which was interpreting Entry 50 in Schedule VII of the Government of India Act, 1935 which was identical i.e. taxes on luxuries including taxes on entertainments, amusements, betting and gambling , it was observed in Express Hotels Private Limited's case (supra) as under:- In the Western India Theatres Ltd. v. The Cantonment Board, Poona Cantonment, [1959] 2 Supp. SCR 63, this court was dealing with the scope of the power of the Provincial Legislature under Sec. 100 of the Govt. of India Act, 1935, with respect to Entry 50 in Schedule VII of the said Act, to make laws with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duces enjoyment over and above the necessaries of life. It denotes something which is superfluous and not indispensable and to which we take with a view to enjoy, amuse 'or entertain ourselves. An expenditure on something which is in excess of what is required for economic and personal well-being would be expenditure on luxury although the expenditure may be of a nature which is incurred by a large number of people, including those not economically well-off .... It was also noticed that as to what constitutes article of 'luxury' cannot be static and keeps on changing based on citizens of one country or nationals of another country for precious living in a different climate. The relevant observations read thus:- There is nothing static about what constitutes an article of luxury. The luxuries of yesterday could well become the necessities of today. Likewise, what constitutes necessity for citizens of one country or for those living in a particular climate may well be looked upon as an items of luxury for the nationals of another country or for those living in a different climate. A number of factors may have to be taken into account in adjudging the commodity as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia, it cannot be declared to be unconstitutional. 19. It is well settled law that a statute enacted by Parliament or legislature can only be struck down by courts on two counts which are viz; (a) lack of legislative competence; and (b) violation of any of the fundamental rights granted in Part III of the Constitution of India or any other Constitutional provision. It is equally well recognized that no enactment can be struck down by merely saying that it is arbitrary, unreasonable or unjust. It was pronounced by the Apex Court in State of Andhra Pradesh vs. McDowell Co. AIR 1996 SC 1627 as under:- No Court in the United Kingdom can strike down an Act made by the Parliament on any ground. As against this, the United States of America has a Federal Constitution where the power of the Congress and the State Legislatures to make laws is limited in two ways, viz., the division of legislative powers between the States and the federal government and the fundamental rights (Bill of Rights) incorporated in the Constitution. In India, the position is similar to the United States of America. The power of the Parliament or for that matter, the State Legislatures is restricted in two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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