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2015 (9) TMI 1213 - HC - VAT and Sales TaxConstitutional validity of Levy of Cess on every wedding and connected celebrations conducted in hotels, having classification of "Three Star" and above and in auditoriums which have a seating capacity, including that of dining halls, above 500 - legislative power to levy cess - object of raising the required revenue to form a "matrimony fund" for girls, from economically weaker sections. - The petitioners also bring to focus the fact of the specific activity being covered under the Finance Act, 1994 and the Kerala Tax on Luxuries Act, 1976 [for brevity "Act of 1976"], which levies tax in the nature of "tax on luxuries". Held that:- The levy is only on the event of renting out a Three Star hotel or an auditorium; that too, only when it is rented out specifically for weddings or connected ceremonies. Unless the (taxing) event of renting for wedding occurs, there is no levy and that cannot be sustained as a levy on the "building" as such. The correlation to Entry 62 List II also cannot be sustained, since there is already a levy by virtue of the Act of 1976, on the activities for which the Three Star hotels or auditoriums, covered under the impugned enactment are taxed. Any amenity or service provided in a hotel, auditorium or kalyanamantapam where the rate of charges for such amenity or service is above a specified limit; are deemed to be luxury and is taxed under Entry 62. The tax levied is on the aspect of luxury enjoyed. The fees now sought to be levied, tracing the power to Entry 66 List II and correlating it with Entry 62, cannot be sustained in view of the specific intention professed for providing marriage assistance to the under-privileged. This is not to say that good intentions of the Government alone could sustain the levy. Taxing the 'haves' to enrich the 'have-nots' though an extolled virtue; it has certain restrictions when applied to a system built on rule of law. While exercising powers of taxation under a constitutional framework, State can ill afford to put on the mantle of a Robin Hood. The primary object and the essential purpose of the levy as also the ultimate result is the constitution of a fund; 'Mangalya Nidhi', to assist the under-privileged women, in getting married. There is absolutely no service offered and no regulatory measure employed. The levy definitely is not a fee and can only be treated as a tax; for which the source is unavailable under any of the fields of legislation enumerated in the Seventh Schedule to the Constitution of India. The State Legislature has to be found to be incompetent to enact the impugned legislation under Article 246 of the Constitution of India. The impugned legislation in so far as it relates to Section 11 of the Kerala Finance Act, 2013 and Rules framed thereunder, is ultra vires the powers of the State Legislature as conferred by the Constitution of India and the State is restrained from levying and collecting the cess in accordance with such enactment. - Decided in favor of petitioners.
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