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TMI Blog2016 (9) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the assessment to tax with reference to VAT and luxury tax for the years 2005-06, 2006-07 and 2007-08? - Held that: - As far as the assessment year 2005-06 is concerned, there is no dispute about the fact that the amendment to the Rules had come into effect only on 28.07.2006. Under such circumstances, there was no necessity to initiate any penalty proceedings against the petitioner for having not complied with the bifurcation so contemplated during the said assessment year - Tribunal not justified in imposing penalty on the petitioner as far as assessment year 2005-06 is concerned. There is deficiency on the part of the assessee in bifurcating the luxury tax as well as VAT, even after the Rule had been amended. However, it is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were filed by the petitioner in W.P.(C) No.20226 of 2011 and T.A.(VAT) Nos.386/2009, 387/2009 and 388/2009 were filed by the State of Kerala with respect to the very same issue. 2. The question that had arisen for consideration in the appeals, was regarding the bifurcation of luxury tax as far as the usage of Banquet Hall and Poolside area for serving food as well as conducting other services are concerned. By an amendment which had come into force on 28.7.2006, Rule 3 C had been incorporated in the Kerala Tax on Luxuries Rules, 1976. By virtue of the aforesaid provision, rough estimate had been made with respect to the services rendered while serving food, drink and other services in a hotel, hall, auditorium and other similar places, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside. Further it was found that there was no reason to impose penalty on the amount involved as far as the Poolside area is concerned whereas, the penalty imposed for not levying luxury tax in respect of the Banquet Hall was confirmed. Appeals were filed before the Tribunal by the State ie, T.A.Nos.387/2009 and 388/2009 were dismissed and appeal No.386/2009 in respect of penalty order for assessment years 2005-06 has been allowed and thereby imposing penalty on the petitioner for that assessment year as well. However, the penalty had been reduced to an amount equal to the tax due for the respective years. 5. The short issue to be considered in these writ petitions is whether there was any necessity to impose penalty on the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter initiation of proceedings, the petitioner had already corrected the same and presently, it is being done in accordance with the statutory format. 7. On the other hand, learned Government Pleader while supporting the Tribunal's stand with reference to imposition of penalty, submits that the penalty ought to have been imposed for usage of poolside area also which is the subject matter in W.P.(C) No.24497 of 2011. 8. A counter affidavit also is filed in W.P.(C) No.20226 of 2011, by which they supported the stand taken by the Tribunal, which is being challenged by the petitioner. Learned Government Pleader also placed reliance on the judgment of this Court in Tissan J. v. State of Kerala and others [2014 KHC 3123] and Brunton B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority to apply the components under Rule 3C of the Rules to arrive at a calculation for the purpose of luxury tax. Though, Rule 3C would not apply, its yardstick can be applied to arrive at a best judgment. Therefore, I do not find any infirmity with the calculation of the luxury tax. 6. The learned Senior Counsel for the petitioner submits that the petitioner has already paid 12.5% VAT on full value of the banquet sales, the same has to be given credit by bifurcating rent and food sale. I do find merit in this argument. Since the petitioner has already paid VAT on full value on banquet sales, excess VAT paid has to be set off against luxury tax payable. Accordingly, the impugned order is set aside. Fresh assessment shall be made afte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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