TMI Blog2011 (1) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... erewith.There can be no rigidity that an exhibition-cum-sale hall ex hypothesi be considered to fall within the meaning of section 2(5B) of the Act. The question in each case should be, whether in the light of the cumulative facts, as established, an exhibition-cum-sale hall is a building or a part of the building where accommodation is provided for marriage or reception or matters related therewith, whether functions are conducted in such halls regularly or not? the amendment as also the decision in Godfrey Phillips India Ltd.’s case [2005 (1) TMI 391 - SUPREME COURT OF INDIA]. In the result, the petitions are allowed. The proceedings initiated by the respondents, culminating in the notices, annexures G, G1 and L, impugned, are quashed. - Writ Petition Nos. 27454, 27455, 27456 of 2009 - - - Dated:- 22-1-2011 - SREENIVASE GOWDA B., J. ORDER:- The order of the court was made by RAM MOHAN REDDY J. A learned single judge by order dated February 8, 2010, referred these petitions to the Division Bench to be heard along with W.P.No. 623 of 20021, since the questions raised therein are identical to the questions that arise for decision making in these petitions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request for extension of 30 days time was on the premise that an appointment was sought with the Commissioner of Commercial Taxes to appraise him of the matter. This was followed by a letter dated October 24, 2008, annexure E, addressed to the Government of Karnataka setting out particulars of the activities carried on by the petitioner the notices issued; the efforts of the petitioner to bring in huge revenues for the State and hence sought intervention by exempting tax liability under the Act. Similar letters dated November 6, 2008 and November 10, 2008, annexures F and F1, were addressed to the Principal Secretary and Commissioner of Commercial Taxes, respectively. While things stood thus and there being no response from the State and its functionaries, the fifth respondent issued revised notices dated December 1, 2008, annexures G and G1, to the petitioner invoking sections 4A, 6(3) and 7 of the Act reiterating its earlier demand and proposing to levy Rs. 7,43,55,940 as tax and Rs. 5,90,000 as penalty for the years 2007-08 and 2008-09, with a threat to pass orders of confirmation, if not paid within three days. The petitioner once again responded to the notice by reply dated D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be put to use for marriage, reception and matters related therewith in order to attract the levy of luxury tax. More so, in view of the substitution of the words and includes seminar, convention, banquets, meeting or exhibition-cum-sale hall or such other hall as specified by the Commissioner , by Act No. 44 of 1999, with effect from April 1, 1999. The intention of the Legislature, it is stated, was to bring within the tax fold, such of those halls, the buildings of which provide accommodation for marriages, reception and matter relating therewith. Reliance is placed upon paragraphs 31, 32 and 33 of the decision of the apex court in Commissioner of Central Excise, Pondicherry v. Acer India Ltd. [2004] 137 STC 596 (SC). It is the further contention of the petitioner that levy of tax can only be on services ministering to the enjoyment, comfort or pleasure extraordinary to necessities of life in context of marriage hall or reception hall connected with marriage or reception held in the hall, while there can be no levy on the income earned from letting out BIEC for holding exhibitions to promote industrial machine tools and hence the notices are beyond the scope of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urious and conducive accommodation which is a service provided to seat the visitors in comfortable chairs for the purposes of watching the proceedings and participating in the proceedings constitutes luxury and therefore, the said services would not be exempt from payment of tax, by placing reliance upon the decision in Express Hotels Private Ltd. v. State of Gujarat [1989] 74 STC 157 (SC), more appropriately to the finding that to identify the luxury on the basis of hire charges payable for accommodation is rational and not ultra vires . So also reliance is placed upon the decision of this court in Sri Ramaseva Mandali Trust (R), Bangalore v. Assistant Commissioner of Commercial Taxes [2003] 133 STC 574 (Karn) and Magaji Mhavarsa Kamakshi Bai Kalyana Soudha Samudaya Bhavan, Nanjangud v. Assistant Commissioner of Commercial Taxes [2006] 146 STC 473 (Karn), observing that levy of tax on marriage hall charging not less than Rs. 5,000 is reasonable classification, and that section 3C of the Act is intra vires. It is next stated that in Godfrey Phillips India Ltd. s case [2005] 139 STC 537 (SC), the apex court while affirming the decision in Express Hotel s case [1989] 74 STC 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hire BIEC is not services . (iii) According to the learned counsel the notices impugned levying tax on rental income from hiring BIEC and not services , the proceedings is ultra vires and without authority of law. (iv) Reliance is placed upon the following decisions: (a) Godfrey Phillips India Ltd. s case [2005] 139 STC 537 (SC), more appropriately paragraphs 31, 75, 85 and 96; (b) New India Sugar Mills Ltd. v. Commissioner of Sales Tax, Bihar [1963] 14 STC 316 (SC), at page 327; (c) Commissioner of Sales Tax, U.P. v. Modi Sugar Mills Ltd. [1961] 12 STC 182 (SC), at page 190. Per contra, learned counsel for the Revenue, while reiterating the averments in the statement of objections and notices impugned, maintains that the building BIEC though constructed as a concept for promoting sale of industrial products and as an exhibition-cum-sale hall, is included within the definition of the term marriage hall under section 2(5B) by Karnataka Act No. 4 of 1999. Elaborating on the said contention, learned counsel submits that the definition of the term marriage hall includes an exhibition-cum-sale hall amongst others, whether functions are conducted regularly or not. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing heard the learned counsel for the parties, perused the pleadings, examined the notices impugned and the provisions of the Act the following three questions arise for decision-making: (1) Whether BIEC, an exhibition-cum-sale hall is a building where accommodation is provided for marriage or reception or matters related therewith and functions are conducted in such halls regularly or not, is a marriage hall within the definition of the said term under section 2(5B) liable to be impost under section 3C of the Act? (2) Whether letting out BIEC on hire, for exhibition-cum-sale, is a luxury, meaning services ministering to enjoyment, comfort or pleasure extraordinary to necessities of life, within section 2(4B) attracting the impost under section 3C of the Act? (3) Whether, in the facts and circumstances, the luxury tax levied and demanded in the notices, annexures G, G1 and L, on the rental income from hiring BIEC and for services rendered therein are legal, valid and sustainable? The apex court in Express Hotel s case [1989] 74 STC 157 (SC), while upholding the constitutional validity of the Act in Gujarat, observed that entry 62, List II of the Seventh Schedule to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r exterior decoration or any amount received by way of donation or charity or by whatever name called in relation to letting out the marriage hall but do not include any charges for food and drinks. Explanation. If any question arises whether any charges are charged for marriage hall, such question shall be referred to the Commissioner and the decision of the Commissioner shall be final and shall not be called in question in any court. Section 3C provides for levy and collection of tax on charges for marriage hall, which reads thus: 3C. Levy and collection of tax on charges for marriage hall. Subject to the provisions of this Act, where charges for luxury provided in a marriage hall are not less than five thousand rupees per day there shall be levied and collected a tax at the rate of ten per cent of such charges. The Act defines luxury under section 2(4B) to mean, services ministering to enjoyment, comfort or pleasure extraordinary to necessities of life . In the matter of interpretation of taxing statutes, there is no more doubt that the power conferred on the Legislature to levy tax must be widely construed to include choice of articles, person, manner and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntertainments, amusements, and gambling . The word including must be given some meaning. In ordinary parlance it indicates that what follows the word including comprises or is contained in or is a part of the whole of the word preceding. The nature of the included items would not only partake of the character of the whole, but may be construed as clarificatory of the whole. That an inclusive definition is generally not exhaustive is a statement of the obvious. The meaning of marriage hall in section 2(5B) of the Act, is thus comprehended to include halls, building or part of the building where accommodation is provided for the purpose of marriage, reception or matters related therewith. The Amendment Act seeks to amplify the meaning by including exhibition-cum-sale hall, which, but for the building or part thereof where accommodation is provided for marriage or reception or matters related therewith, where functions are conducted regularly or not, could not be included in the definition of marriage hall in section 2(5B) of the Act. There can be no rigidity that an exhibition-cum-sale hall ex hypothesi be considered to fall within the meaning of section 2(5B) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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