TMI Blog2002 (9) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... ndred and fifty rupees but less than two hundred rupees. (b) Where the charges for lodging per Ten per cent of such room per day are not less than two charges. hundred rupees but less than four hundred rupees. (c) Where the charges for lodging per Twelve and a half per room per day are not less than four cent of such charges: hundred rupees. Provided that where charges for lodging are payable otherwise than on a daily basis, then, for the purposes of determining the tax liability under this section, the charges shall be computed as for a day, based on the period of lodging for which the charges are payable: Provided further that where any charges for lodging are paid by any person who is a member of a Foreign Diplomatic Mission in India, then such person shall be exempt from the payment of tax,(1-A) Tax levied under sub-section (1) shall be paid by every proprietor. (1-B) Notwithstanding anything contained in sub-section (1), no tax shall be levied and collected from a hotelier to the extent of tax not collected by him during the period from the 1st day of August, 1985 to the 31st day of March, 1986. (3) In computing the amount of tax payable under this section, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding charges for food and drinks) is not less than one hundred and fifty rupees per room per day; (ii) provision in hotels, whether to resident or others of such facility as health club, beauty parlour, swimming pools, conference hall and the like for which charges are separately made." 7.. The challenge by the appellants is for the inclusion of outgoing telephone calls and laundry charges to luxury tax under the provisions of section 3(1) of the Act. That is under challenge in these writ appeals. Clause (5) substituted by Act No. 6 of 1995, w.e.f. April 1, 1995. Substituted for the words "one hundred and twenty-five" by Act No. 15 of 1996 and shall be deemed to have been substituted with effect from April 1, 1996. 8.. Before we deal with this matter any further it would be necessary to state that the Revenue in its circular had instructed the Commercial Tax Officers to the effect that telephone charges are not liable to luxury tax. This circular is dated February 15, 1983 and has been in force till it was quashed by the learned single Judge. 9.. It is also common ground that this circular was acted upon by the Revenue and no tax was levied in the past and no propositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n charges for telephone calls and laundry separately. Such an amendment is in line with the circular dated February 15, 1983 issued by the Commissioner. 16.. The learned single Judge was pleased to quash the circular without there being a prayer for quashing the same. 17.. Section 2-A of the Act reads as follows: '2-A. Instructions to subordinate authorities.-(1) The State Government or the Commissioner may, from time to time, issue such orders, instructions and directions to all officers and persons employed in the execution of this Act as they may deem fit for the administration of this Act, and all such officers and persons shall observe and follow such orders, instructions and directions of the State Government and the Commissioner: Provided that no such orders, instructions, or directions shall be issued so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions. (2) All officers and persons employed in the execution of this Act, shall observe and follow such administrative instructions as may be issued to them for their guidance by the Joint Commissioner within whose jurisdiction they perform their functions." 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en an amendment of the petition so as to give the respondents an opportunity to meet a case of alleged invalidity of the rule." 23.. The Supreme Court in AIR 1984 SC 186 (Krishna Priya Ganguly v. University of Lucknow) held as follows: "6. Before dealing with the individual cases of the appellants/ respondents, it may be necessary for us to adjudicate on the validity of the circulars passed by the Government and the rules and regulations framed by the Medical Council of India, to put the matter beyond controversy so that a consistent test may be applied to all candidates desiring admission and unless rules are adhered to, admissions would be denied in which case this Court will not interfere in the absence of a plea of prejudice or bias which would be naturally for the candidates to establish." 24.. The Supreme Court took a similar view in (1992) 1 SCC 695 (Dena Nath v. National Fertilisers Ltd.). The Supreme Court at paragraph 22 held that it is not for the High Court to inquire into the question and decide whether the employment of contract labour in any process, operation or in any other work in any establishment should be abolished or not. It is for the Government to deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g section. 31. The main crux of the argument of the learned counsel for the appellants is that section 2(1) read with sub-section (5) is a comprehensive section and has to be read in consonance with the charging section, viz., section 3. 32.. Section 3 would indicate that subject to the provisions of the Act there shall be a levy of luxury provided in a hotel in respect of every room known as luxury tax. Section 3 also provides for a slab. Where charges for lodging are not less than Rs. 150 but less than Rs. 200 the levy is 5 per cent of such charges. Similarly where charges for lodging are not less than Rs. 250 but less than Rs. 400 the levy is 10 per cent of such charges. Where charges are not less than Rs. 400 the levy is 12 per cent of such charges. The relevant words are "such charges". 33.. We shall deal with the definition of "luxury" provided in a hotel as contained in sub-section (5) of section 2. A careful reading of sub-section (5) of section 2 would indicate that the meaning of "luxury provided in a hotel" is accommodation for lodging provided in a hotel where the rate of charges is not less than Rs. 150 per room per day. What is very important is the words "in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (5) of section 2 provides for such contingency where a separate luxury tax is contemplated for those persons whether they are residents or not to use the facilities such as health club, beauty parlour, swimming pool, conference hall and the like for which charges are separately made. Clause (ii) of sub-section (5) of section 2 reads as follows: "Provision in hotels, whether to residents or others of such facilities as health club, beauty parlour, swimming pool, conference hall and the like for which charges are separately made;" 38.. This clause has to be read separately with the charging section which is not section 3(1), but section 3-B. Section 3-B reads as follows: "3-B. Tax on luxuries like health club, etc.-There shall be levied and collected a tax at the rate of twenty per cent on the charges collected for luxuries provided in a hotel for residents or others such as health club, beauty parlour, swimming pool, conference hall and the like when such charges are collected separately." 39.. There is a specific charging section where the tax is at 20 per cent on the charges levied for residents and non-residents who use the facilities of a hotel such as health club, bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tood section 3 not to include telephone charges as luxury tax. 45.. We are also of the view that charging section does not contemplate inclusion of laundry charges since it is not compulsorily payable by the client. Apart from this, laundry cannot be by any stretch of imagination be termed as a luxury. Luxury is defined in the Schedule to the Act and it includes items like tobacco, cigarettes, cigars, gutkha excluding beedies and snuff but does not include laundry charges. We have already held that the charging section only speaks of the rate card and the tax is on such charges. The words "such charges" must necessarily mean the charges on the basis of the rate card. No more and no less. 46.. It was finally submitted by the learned counsel for the appellants that an amendment came into force with effect from April 1, 2000 excluding telephone charges, laundry and other amenities from section 2(1). The amendment was by virtue of Karnataka Act No. 5 of 2000 with effect from April 1, 2000. Section 2(1) now excludes telephone calls, laundry and other amenities from the definition of "charges for lodging". Before the amendment only charges for food and drinks was excluded; after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the common law should be construed according to the common law. Those of the second class are to be construed as intended to lay down a rule for future cases and to act retrospectively. They closely resemble interpretation clauses, and their paramount purpose is to remove doubt as to the meaning of existing law, or to correct a construction considered erroneous by the Legislature. 53.. In an old English case which has the approval of the Supreme Court states the position rather clearly. Lord Sterndabe in Cape Brandy Syndicate v. Inland Revenue Commissioners reported in [1921] 2 KB 403 pronounced as follows: "I think, it is clearly established.......that subsequent legislation on the same subject may be looked into in order to see what is the proper construction to be put up on an earlier Act where that earlier Act is ambiguous...... If there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier." 54.. It is a well-recognised rule of interpretation that an amendment which is by way of a clarification of an earlier ambiguous provision can be a useful aid in construing the earlier prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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