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2016 (6) TMI 704 - HC - Indian LawsLiability to pay luxury tax - manner of calculation - department contends that when the petitioner accepts consolidated payment basis, the tax is to be calculated on the basis of 50% of the occupancy as per the average declared tariffs and not on the basis of the actual occupied number of rooms. - Held that:- Accepting the petitioner's interpretation would render the expression “on the basis of” meaningless. Quite apart from the two expressions being used in the same provision, obviously for different effect, accepting interpretation of the petitioners would lead to plain absurdity as may be demonstrated presently. We may recall, under clause (a), on consolidated payment basis, the proprietor would pay 8 per cent of the 50 per cent occupancy. If this occupancy is understood as actual occupancy as suggested by the petitioners, the assessee would have tax burden of 8 per cent calculated on the basis of half of the actual tariff collected during the period under consideration. On the other hand, for a proprietor opting for clause (b), he would pay tax at 12.5 per cent on the basis of actual occupancy i.e. 12.5% of the total tariff. We are informed that now the rates prescribed for clauses (a) and (b) are 6 per cent and 12.5 per cent respectively. In plain term thus, proprietor governed by clause (b) would pay more than 4 times tax payable by one governed under clause (a). There is no earthly reason why the Legislature should provide for two options; one inviting tax four times, the other option. Petition dismissed - Decided against the assessee.
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