TMI Blog2015 (8) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in favour of Assesse. Luxury Services – Taxability – Appellant seeking declaration that certain services rendered outside hotel were not liable to be taxed under Kerala Tax on Luxuries Act, 1976 – Held that:- It was not case of petitioner that their customers were availing services of outside agencies by themselves – "luxury" that customers of appellant received from various other agencies outside hotel were admittedly billed by appellant – Therefore, it was luxury which was provided by appellant to its customers, though it was outside premises of hotel – Therefore while interpreting section 2(ee), 2(f) and 4(1), "in the hotel" as appearing in said provision has to be read as "by the hotel" as well – Incidence of luxury tax was for luxury that was provided by hotel and limiting levy of tax to services provided inside hotel will be giving very narrow meaning to language used in statute – Appeal dismissed. - W. A. Nos. 4 and 520 of 2013 - - - Dated:- 26-2-2014 - Manjula Chellur and A.M. Shaffique, JJ. Lal K. Joseph, A.A. Ziyad Rahman and V.S. Shiraz Bava for the Petitioner Dr. Sebastian Chempapillil, Special Govt. Pleader and Bobby John Pulickaparambil, Govt. Ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercising the power of suo motu revision. The learned counsel also placed reliance on the judgment of a Division Bench of this court in Suppan Chettiar v. CAIT[1958] KHC 374. In that case, the question to be considered was whether the revisional authority under section 34 of the Kerala Agricultural Income-tax Act, 1950 (TC) can exercise the power of revision beyond the period of limitation specified for reopening an assessment as provided under section 35 of the Act. It was held that though no specific period of limitation was prescribed for exercising the suo motu power of revision under section 34 of the Act, and when an assessment becomes final within a specified period, the revisional authority cannot direct the assessing officer to do anything which the latter is not competent to do so on account of the statutory limitation provided under the Act. On the other hand, the learned Special Government Pleader relies upon section 8(1) of the Act to indicate that when there is no statutory period of limitation prescribed for exercising the suo motu power of revision, the revisional authority can at any point of time direct reopening of the assessment and the reassessment can be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teps under section 35; and (iii) since the Commissioner cannot direct the Agricultural Income-tax Officer to do anything which the latter is not competent to do and since the Agricultural Income-tax Officer is competent to reopen an assessment and make a reassessment under section 35 only after issuing the notice under that section, which has to be issued within three years of the financial year for which the concerned assessment had been made, the Commissioner is not competent to exercise his revisional power for giving a direction to the Agricultural Income-tax Officer to reopen an assessment and make a reassessment after the lapse of the period prescribed for issuing the notice under that section. Having gone through Suppan Chettiar's case[1958] KHC 374, we are of the view that almost similar provisions like that of section 6(5) and section 8 has been considered with reference to the Agricultural Income-tax Act, 1950. The Division Bench opined that if the assessing officer cannot make a reassessment beyond the period of limitation prescribed thereunder, the revisional authority cannot exercise the suo motu revisional power beyond the said period, in the absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned single judge, relied upon the judgment of the Division Bench of this court in' Casino Hotel v. State of Kerala[2008] 14 VST 122 (Ker);[2007] 15 KTR 485 and held that such services though outside the hotel attract luxury tax. It is contended by the learned Special Government Pleader that the issue in the present case is covered by the judgment in Brunton Boatyard v. State of Kerala[2013] 66 VST 533 (Ker);[2013] 4 KLT 37, whereas the learned counsel for the appellant would submit that the Division Bench did not exactly consider the issue involved in the matter and therefore the said judgment cannot be an authority for the proposition suggested by the petitioner. The main argument of the learned counsel for the appellant is that when the incidence of tax is on the luxury provided in the hotel and the luxury enjoyed by the tourists by way of boat-riding, trekking, sightseeing, etc., are outside the hotel, the Division Bench while deciding Brunton Boatyard's case[2013] 66 VST 533 (Ker);[2013] 4 KLT 37 did not have occasion to consider the incidence of tax. Therefore it is contended that when the tax is levied on the luxury provided, in so far as the hotel does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for residence and is not such amenity or service as is intricately connected with the accommodation for residence. The statutory provision in hand does not attempt any such restrictive construction. The term 'luxury provided in a hotel' is defined to mean accommodation for residence and other amenities and services provided in a hotel excluding items mentioned in section 2(f). The use of the conjunction 'and' after the phrase 'accommodation for residence' clearly spells out the legislative intent that the amenities which fall into the net of that provision are not those merely confined to providing attendant services in connection with the requirement of an occupant of the hotel for residence. Again, the use of the conjunction 'and' between the words 'amenities and services' amplifies to bring within its ambit all commodities or services that minister comfort or pleasure. Therefore, all amenities and services provided in a hotel as well as accommodation for residence amount to luxury for the purpose of section 2(ee) and would fall within the term 'luxury provided in a hotel' as defined in section 2(f) of the Act. Still further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that the said proviso is in the form of a clarification. We do not think so. The proviso had been incorporated to clearly exclude such items from the service that were being provided by the hotel. The incidence of luxury tax is for the luxury that is provided by the hotel and limiting the levy of tax to services provided inside the hotel will be giving a very narrow meaning to the language used in the statute. The scheme of the Act has to be looked into as a whole and when the levy of luxury tax is on the luxury provided in the form of services, necessarily all services rendered by the hotel comes within the definition of luxury which is chargeable under the Act, unless it is specifically excluded, as indicated above by the proviso incorporated by way of amendment. Hence, we do not think that the appellant has made out any good ground for interfering with the judgment of the learned single judge. In the result:- (i) W. A. No. 4 of 2013 is allowed setting aside the judgment of the learned single judge. Exhibit P2 and all further proceedings pursuant to the same are hereby quashed. (ii) W. A. No. 520 of 2013 is dismissed. - - TaxTMI - TMITax - CST, VAT & Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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