TMI Blog2014 (7) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... was not intended to fall within the charging section. Title of the Act says that it is called the Luxury Tax Act of 1988 and was intended to levy tax on luxuries provided in hotels and lodging houses in the State of Madhya Pradesh and thus, the "business" of the present institution-Choithram Charitable Trust would not be amenable to luxury tax and was thus outside its purview. We have no hesitation in holding that both the impugned orders, as already stated above are contrary to the provisions of the Act and, therefore, they are hereby set aside - Decided in favour of assessee. - Writ petition No. 2768 of 2005 - - - Dated:- 20-9-2013 - JAISWAL P.K. AND WAGHMARE S.R. ,JJ. For the Appellant : P.M. Choudhary. For the Respondents: Sudhanshu Vyas, Penal Lawyer, ORDER:- The order of the court was made by MRS. S.R. WAGHMARE J.- By this writ petition under articles 226 and 227 of the Constitution of India, the petitioner, Choithram Charitable Trust has challenged the order dated July 12, 2005 passed by respondent No. 2, Deputy Commissioner, Commercial Tax, Indore in Revision Case No. 024/ Revision/2005, Luxury Tax, confirming the levy of tax under the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the patients and their attendants and relatives, who come from outside, the trust has constructed a Dharmashala in the hospital campus itself, whereby accommodation is provided strictly to the attendants and relatives of the patients on nominal charges. It is this Dharmashala, which is targeted by the respondents for fixation of the petitioner's liability under the provisions of the Luxury Tax Act, 1988, whereas counsel also countered that the Dharmashala is run by the petitioner on no profit and no loss basis and the alleged business and activity cannot be any terms be equated to running a hotel within the meaning of the said Act. However, respondent No. 1, Commercial Tax Officer, Indore initiated the proceedings on the basis of some complaint received by him, hence the petitioner has duly filed objections vide annexure P/2 which was not considered by the respondents. Counsel submitted that reply has also mentioned that the Dharmashala was outside the purview of the Act since the petitioner was neither a hotelier nor the Dharmashala could be said to be a hotel within the meaning of the said Act. The activity of Dharmashala was merely incidental and ancillary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it houses, etc., lodging accommodation is provided, but they cannot be called as hotel. In any case the terms hotel and club are not interchangeable and a distinction exists between them. Counsel stated that the High Court of Karnataka has categorically held that the main activity of a club is not that of a hotel and it is only incidental that the members or guests or the members of other clubs are provided the facility for stay and food on a reciprocal basis. The activity of renting charges cannot be considered to be its main activity so as to fall within the charging section. Counsel further relied on the judgment of Malankara Orthodox Syrian Church v. Sales Tax Officer, Ernakulam [2004] 135 STC 224 (Ker); [2004] STJ 694 (Ker). A short question arose whether hospital is a dealer and High Court of Kerala held that the transaction involved in the sale, when occasional and incidental, cannot be taxed. However when the sale by the hospitals which are supplying medicines of the value in excess of the turnover for which registration is required, i.e., ₹ 2 lakhs in an year, are liable to be registered under the Kerala General Sales Tax Act. Whereas in the case of Tata Sk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable in the petitioner's hospital and thus under section 2(e) of the Act, the facility provided was covered under this definition, moreover the balance sheet of amount under the head of Dharmashala where annexure R/2, the balance sheet indicates that they were making profit and definition of hospital indicates residential accommodation renting house and inn, etc., which would come within the four corners of the definition of hotel and such type of different rate levied as rent would be a business within the meaning of the Act. And hence the statement made by the counsel for the petitioner was not absolutely correct and it could not be said that the facility was being provided on a no profit no loss basis . Counsel prayed that both the orders impugned in the petition are in accordance with law and no ground for interference is made out and he prayed that the petition be dismissed. Considering the above submissions and the evidence on record and the annexures filed with the petition, we are of the considered opinion that petition needs to be allowed for simple reason that the hospital cannot be equated to term hotel to incur liability under the Luxury Tax Act, 1988. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uxury Tax Act and hence, we find that both respondent Nos. 1 and 2, Commercial Tax Officer and Deputy Commissioner, erred in holding that the petitioner would be under the purview of the charging sections 3 and 4 of the Luxury Tax Act, 1988. Moreover even the exact wording of the title of the Act is considered itself says it is a levy of tax on luxuries provided in a hotel and lodging house in the State of Madhya Pradesh. We are unable to agree with the contention put forth by the respondents/State that activity of the Dharmashala are collectively incidental and ancillary sales and so also has already stated above the incidence of tax would arise only when under sections 3 and 4 of the Act the charging or levy of tax is attracted. For the purpose of imposing the charge, the Parliament has enacted detailed provisions in order to compute the tax liability and deviating from the provisions is not permissible. The transaction to which the provisions of the Luxury Tax Act must be applied and encompassed for determining the charge this inference flows from the general arrangement of the provisions of the Act and that which is natural has to be concluded otherwise non-mention would mea ..... 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