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TMI Blog2024 (12) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... ooms. The petitioner points out that, it is also providing some "sophisticated medical beds" imported from abroad having multiple functions for providing optimum nursing care for expecting mothers. Petitioner points out that the afore medical facility is provided to the patients/expecting mothers who require special medical care, collecting a separate amount towards the use of the said bed. The petitioner points out that as regards the room rent collected, it is admittedly satisfying luxury tax under the statute. However, as regards the charges for the facility of "medical bed", as above, the petitioner had not declared the said receipts under the statute and was also not paying tax thereunder, taking the stand that the receipts for the use of the medical bed as above, are outside the purview of imposition of luxury tax under the Act. 3. It is seen that the Commercial Taxes Department has initiated proceedings under Section 17A of the Act for the years 2012-13, 2013-14 and 2014-15, culminating in the issue of Exts. P5 to P7 orders, passed by the 1st respondent in W.P.(C) No. 36848 of 2017. By the afore orders; penalty of Rs. 9,38,532/- for 2012-13, Rs. 11,52,690/- for 2013-14 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the provisions of the statute that the receipts against the medical beds as above, have not been exempted from taxation. (iii) He would also rely on the findings in the impugned orders to contend that the receipts towards the medical bed provided by the petitioner to the expecting mothers have to be assessed under the statute since what is provided by the petitioner is luxury. 8. I have considered the rival submissions as well as the connected records. 9. The following questions arise for consideration in these writ petitions: (i) Is the petitioner liable to tax with reference to the medical bed facility provided by it, under the statute? (ii) If the answer to the above question is in the affirmative, is the imposition of penalty under Section 17A of the Act justified? (iii) Is the completion of assessment by estimating the receipts for the purpose of assessment, justified? 10. As regards the first question, the admitted facts are already noticed. The Act provides for levy and collection of luxury tax under Section 4 thereto and as regards a hospital, the provision for taxation is as under: "4. Levy and collection of luxury tax.- (1) Subject to the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced by the petitioner. A reference to Ext. P20 catalog would show that certain specialized facilities are provided through the medical bed. Various features are also provided by the said medical bed. However, the fact that these are only certain devices that provide some additional facilities cannot be disputed. 11. In this connection, the judgment of the Apex Court in Godfrey Phillips India Ltd. v. State of U.P. and Others [(2005) 2 SCC 515] is to be referred to. That was a case wherein, the issue considered by the Apex Court was the challenge against the imposition of luxury tax by various states with reference to Entry 62 of List II, of the Constitution of India. The Apex Court has summarized the declaration of law as regards the definition of the term "luxury" as under: "85. Hence on an application of general principles of interpretation, we would hold that the word "luxuries" in entry 62 of List II means the activity of enjoyment of or indulgence in that which is costly or which is generally recognized as being beyond the necessary requirements of an average member of society and not articles of luxury." (underlining supplied) Thus, ultimately, what is to be looked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the amendments impugned in these appeals do not seek to tax any article of luxury per se but only the experience of the luxury relating to good accommodation and other amenities not linked directly to therapeutic, sanative or ameliorative constituents or components of the services given to a patient under its care by the hospitals. As we have already noticed above, the word 'luxury' has been defined in the Act itself and, therefore, that definition would prevail and it is competent on the part of the legislature to give it a wide meaning so as to take in all such experience which ministers comfort or pleasure. This is completely and wholly within the competence of the Legislature to enact upon under Entry 62 of the VII Schedule of the Constitution, the matter being intrinsically and irreparably related to 'luxuries' as obtaining in the said Entry." (underlining supplied) Thus, ultimately what is taxed under the statute is the experience of luxury as regards the accommodation/ amenities in the hospital. There cannot be any challenge against an assessment with reference to the afore activity. 13. Though the learned counsel for the petitioner pointed out paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mens rea is established, no penalty can be levied. There cannot be any contumacious conduct on account of the non-inclusion of the afore amounts in the return. 17. The Apex Court, in Hindustan Steel Ltd. v. State of Orissa [AIR 1970 SC 253] while considering the imposition of penalty in similar circumstances has held as under: "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from the bona fi ..... 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