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TMI Blog2015 (11) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... In the alternative, the petitioner has sought for declaring that section 3C read with section 2(5B) of the KTL Act as ultra vires entry 62 of List II of the Seventh Schedule to the Constitution or to read down to include only those halls that are used for the purpose of marriages, receptions or matter related thereto. The fifth respondent/Assistant Commissioner of Commercial Taxes (Luxury Tax 2) issued a notice under section 4A of the Karnataka Tax on Luxuries Act, 1979 calling upon the petitioner to register itself under the provisions of the Act and to pay taxes under the Act on the ground that all activities conducted by the petitioner in the BIEC fall within the purview of section 3C of the Act read with the definition of "marriage hall" as provided under section 2(5B) of the Act and the rental charged for the holding of the exhibition therein would amount to "charges for marriage hall" within the meaning of section 2(1A) of the Act. To the notice dated October 2, 2008, though the petitioner replied, the fifth respondent issued another notice stating that the petitioner's contentions were incorrect and petitioner was liable to get itself registered under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... November 15, 2013, petitioner filed additional reply. The fifth respondent examined the original reply dated October 25, 2013 and additional reply dated November 15, 2013 in detail with reference to the proposition notice and provisions of the Act. The fifth respondent even visited the premises of the petitioner on November 19, 2013 for further queries and verifications, heard the person-in-charge of the business premises and recorded the proceedings as per annexure R1. After detail examination of the reply-both the original as well as additional reply, as also the verification of the facts at the business premises of the petitioner, fifth respondent has come to the conclusion that the petitioner squarely falls under the purview of the definition of "marriage hall" in section 2(5B)(ii) and liable to luxury tax under section 3C of the Act and passed the assessment order under section 6(3) of the Act on December 5, 2013. Incidentally, the petitioner was also issued registration under the Act on November 22, 2013. It is also stated, some other similarly placed organizations and companies, viz., Karnataka Trade Promotion Organization have got themselves registered under the Act from Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y interpreting the said definition in a restrictive manner which cannot be accepted. As per the fifth respondent, exhibition halls fall under the definition of "marriage hall" as defined under section 2(5B) and the charges collected by the petitioners are charges collected for luxuries provided and such exhibition halls fall within section 2(1A) and section 3C thereby, the petitioner is liable to pay tax under the Act. By extending the definition of "marriage hall" the petitioner is liable to pay luxury tax as per the provisions of the Act for the period April 1, 2012 to November 26, 2012 and the order passed by the fifth respondent is justifiable. Accordingly, it is submitted, the petition is not maintainable. The specific argument of the senior counsel representing the petitioner is, the assessment of tax on BIEC falls within the definition of "marriage hall" as defined under section 2(5B) and the rental charged for holding exhibitions therein would amount to charges for marriage hall within the meaning of section 2(1A). Similar demand raised during 2009 has been challenged before this court in the earlier writ petition filed. The said writ petition was disposed of on January 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the judgment of the Division Bench of this court in W. P. No. 27454-56 of 2009 (Indian Machine Tool Manufacturers' Association v. State of Karnataka [2011] 42 VST 388 (Karn)) was rendered prior to the amendment and luxury tax is applicable for hotels, lodging houses, clubs and holiday resorts. The judgment rendered earlier in the case of Magaji Mhavarsa Kamakshi Bai v. Assistant Commissioner of Commercial Taxes [2006] 146 STC 473 (Karn) still holds the field with regard to charge of luxury tax on marriage hall charging rental of above Rs. 5,000 under section 3C, though the Division Bench judgment impliedly tried to overrule the judgment in Magaji's [2006] 146 STC 473 (Karn). Luxury tax is being charged not only on marriage halls but also on other similar activities wherein luxury is provided as in the case of clubs or hotel with a special feature of providing AC and other business convenience. It is stated, the accommodation provided by the petitioner is for organizing official, social or business function which are conducted in such place regularly or not. The amendment takes away the effect of judgment in W. P. No. 27454-56 of 2009 (Indian Machine Tool Manufacturers' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3C of the Act is only to attract charges on luxuries provided in marriage hall. Further, according to the petitioner's counsel, Magaji's [2006] 146 STC 473 (Karn) follows the judgment in Express Hotels' case [1989] 74 STC 157 (SC); [1989] 178 ITR 151 (SC); AIR 1989 SC 1949. However, Express Hotels' case [1989] 74 STC 157 (SC); [1989] 178 ITR 151 (SC); AIR 1989 SC 1949 was impliedly overruled by the subsequent judgment of the Supreme Court in Godfrey Phillips case [2005] 139 STC 537 (SC); [2005] 2 SCC 515. Also, in the case of the petitioner, the Division Bench of this court has held that Magaji's [2006] 146 STC 473 (Karn) and Express Hotels case [1989] 74 STC 157 (SC); [1989] 178 ITR 151 (SC); AIR 1989 SC 1949 are no longer good law. Further according to the counsel, the judgment in Magaji's [2006] 146 STC 473 (Karn) and Express Hotels' case [1989] 74 STC 157 (SC); [1989] 178 ITR 151 (SC); AIR 1989 SC 1949 are impliedly overruled by the judgment of this court on January 22, 2011 (Indian Machine Tool Manufacturers' Association v. State of Karnataka [2011] 42 VST 388 (Karn)) in the case of the very petitioner itself. There is no such extra comfort ..... X X X X Extracts X X X X X X X X Extracts X X X X
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