TMI Blog1997 (9) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for those made by the Legislature. It is also equally wellsettled that the State does not have to tax everything in order to tax something and that its choice of picking up districts, batches, persons, methods and even rates for taxation if made reasonably ought to be respected by the courts. See (1) East India Tobacco Company v. State of Andhra Pradesh [1962] 13 STC 529 (SC), (2) P.M. Ashwathanarayana Setty v. State of Karnataka [1988] Supp 3 SCR 155, (3) Federation of Hotel Restaurant Association of India v. Union of India [1989] 74 STC 102 (SC), (4) Kerala Hotel Restaurant Association v. State of Kerala [1990] 77 STC 253 (SC), (5) Twyford Tea Co. Ltd. v. State of Kerala AIR 1970 SC 1133 and (6) Gannon Dunkerley Co. v. State of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withstanding anything contained in sub-sections (1) to (3), but subject to such conditions and in such circumstances as may be prescribed, the assessing authority of the area may, if a hotelier or a restaurateur (other than a hotelier or a restaurateur engaged in reselling of goods purchased by him in the course of inter-State trade or commerce or a dealer engaged in vending of liquor including beer), whose total turnover in a year is not exceeding fifty lakh rupees, so elects, accept in lieu of the amount of tax payable by him under this Act during any year, by way of composition, an amount at the rate of four per cent of his total turnover. 4.. In the present writ petition, the petitioner has called in question the validity of the amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of a hotelier or a restaurateur does not exceed Rs. 50 lakhs, brought about a hostile discrimination between hoteliers and restaurateurs with less than Rs. 50 lakhs turnover on one hand and those with turnovers exceeding the said figure. The petitioner s annual turnover being in excess of Rs. 50 lakhs it is in terms of the substituted provision not entitled to claim the benefit of composition, which on a plain reading of the provision is admissible only to hoteliers or restaurateurs with a turnover of less than Rs. 50 lakhs per annum. The question in other words is whether the classification made by the Legislature for purposes of granting the benefit of composition under section 17 of the Act between assessees whose income is more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generally cater to the middle and lower status of the society for the purpose of levy of a lower rate of tax by adoption of the composition method of payment cannot be said to be either artificial, illusory or irrational nor can the classification be dubbed as one without an intelligible differentia. 7.. Hotel and restaurants turning out business, in excess of Rs. 50 lakhs per annum, cannot equate themselves with the vast majority of humbler eating places, who are not so popular either because of lack of resources to boost sales or because of lack of facilities demanded by the discerning eaters. A classification based on the magnitude of the business turned out by the dealer cannot therefore be said to be per se discriminatory so as to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of their respective turnovers for the purpose of graded imposition so long as it is based on differential criteria relevant to the legislative object to be achieved is not unconstitutional. A classification depending upon the quantum of the turnover for the purpose of exemption from tax has been upheld in several decided cases. By parity of reasoning, it can be said that a legislative classification making the burden of the tax heavier in proportion to the increase in turnover would be reasonable. The basis is that just as in taxes upon income or upon transfers at death, so also in imposts upon business, the little man, by reason of inferior capacity to pay, should bear a lighter load of taxes, relatively as well as absolutely, than is bor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the court must defer to the legislative judgment. When the power to tax exists, the extent of the burden is a matter for the discretion of the law-makers. It is not the function of the court to consider the propriety or justness of the tax, or enter upon the realm of legislative policy. If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied. The equality clause in article 14 does not take from the State a power to classify a class of person who must bear the heavier burden of tax. The classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical ni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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