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2014 (9) TMI 452 - HC - VAT and Sales TaxConstitutional validity of section 4(2)(c)(i) of the Kerala Tax on Luxuries Act, 1976 - Held that:- The petitioner has admitted that the auditorium has fetched per day rental value of ₹ 4,000 as revealed from exhibit P2 receipts bearing Nos. 10146 dated April 18, 2005 and 11167 dated March 14, 2006. As it stands so, the liability to satisfy tax cannot be sought to be eschewed under any circumstance. That apart, there is a specific averment in paragraph 4 of the counter-affidavit filed by the first and second respondents that the second respondent conducted an enquiry on November 20, 2008 by contacting the person in charge of the auditorium, under the guise of advance booking of the auditorium, when it was let known that the daily rent of the auditorium was ₹ 8,500 per day, excluding the dining hall and if the dining hall was also required, it was being separately charged for ₹ 6,000 per day, thus making a total of ₹ 14,500 to be remitted in advance for booking the hall and that the Intelligence Bureau had forwarded the file along with the enquiry report to the first respondent for taking necessary steps for the assessment proceedings under the Act. It is added in paragraph 5 of the counter-affidavit that the petitioner has not produced any bills for verification before the second respondent at any point of time even though notice was issued to produce all the documents as part of the enquiry. The above specific averments have not been rebutted by the petitioner by filing any reply affidavit. case projected by the petitioner that the petitioner is not liable to effect any tax under the Kerala Tax on Luxuries Act, 1976 and that section 4(2)(c)(i) of the Act is ultra vires to the Constitution, is devoid of any merit. Whether the petitioner is entitled to have the benefit of the proviso to section 4(1), which says that the instance of levy under sub-section (1) of section 4 shall not apply to halls and auditorium located within the premises of "place of worship" owned by religious institutions - Held that:- property was lying as a continuous and contiguous block earlier and that the Chittur Road cutting through the property was surrendered by the petitioner, which made the "temple premises" on one side of the road and the "temple ground" on the other side. True, devaswom office and store are situated on the eastern side of the road in the temple ground, comprised in Sy. Nos. 43/4 and 44/7 of the Ernakulam Village. The auditorium is situated towards the north-eastern direction of the said ground, that too, on the other side of "Ayyappankavu East Extension Road", lying in between. Even the petitioner himself has conceded in paragraph 13 of the writ petition that the auditorium is not in any way far away from the temple, but is only hundred metres away from the temple. This by itself shows that the auditorium is not situated within the premises of the place of worship owned by the institution and the fact that the temple feast or "annadanam" is being performed in the auditorium, admittedly situated at least 100 metres away or that the entire income from the auditorium is being utilised for the temple management cannot bring it back to be situated as within the place of worship. The factual position as revealed from the records also does not come to the rescue of the petitioner and the claim for benefit of the proviso to section 4(1) of the Act is thoroughly wrong and misconceived. Whether first respondent is not vested with any power to impose penalty - Held that:- authorities who have been administering the different functions under the KGST Act have been appointed as the respective authorities under section 3 of the KVAT Act, vide SRO No. 318/05 dated March 31, 2005 issued by the Government. It is further pointed out that, pursuant to Notification No. 1/05 dated April 1, 2005, the officers including the assessing authority in the present case are granted functional jurisdiction to carry out all the functions of an assessing authority under the KVAT Act, in addition to the existing functions under various other Acts, which includes the Kerala Tax on Luxuries Act, 1976 as well. As such, the challenge raised in this regard has necessarily to fail. Whether there was any conscious effort on the part of the assessee to defraud the Revenue, so as to sustain the penalty - Held that:- it cannot but be found that there is absolutely no discussion as to why, the penalty as proposed in exhibits P8 to P10 notices was liable to be imposed or as to why the "explanation" given in exhibit P11 was not acceptable to the concerned authority. Though the finding as to the liability to take out registration and to satisfy the tax is beyond challenge, the penalty can be justified only on the basis of a "finding" as to the violation/evasion, which is conspicuously absent. question of penalty requires to be re-considered by the first respondent - Decided partly in favour of assessee.
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