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TMI Blog1994 (7) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Nos. 1071 of 1983, 8809 and 8810 of 1982 and 1142 of 1984. A.K. Tiwari, E.M.S. Anam and S.K. Bhattacharya, for the appellants in C.A. No. 3341 of 1988. R.P. Bhatt, Senior Advocate and Ashok Mathur, Advocate, for the respondents in C.A. Nos. 29 of 1982, 3069 and 3070 of 1981, 188 of 1982. Vimal Dave, for the appellant in C.A. No. 92 of 1983. H.N. Salve, Senior Advocate, for the appellant in C.A. Nos. 3069 and 3070 of 1981. JUDGMENT The judgment of the Court was delivered by KULDIP SINGH J.---The question for consideration is whether the Jammu and Kashmir State Legislature has the legislative competence to enact the Jammu and Kashmir Hotel (Amenities and Services) Tariff Taxation Act, 1980 (" the Act "). A Division Bench of the Jamm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. Rs. 201 to Rs. 300 a day ... 12 per cent. 4. Rs. 301 and above a day ... 15 per cent. B. Casual (non-resident) visitors Full amount of tariff ... 8 per cent." Section 13 of the Act which provides for collection of taxes by the assessee is as under : " 13. Collection of tax by the assessee.---(1) A registered hotel keeper is authorised to charge the tax due on tariff under the provisions of this Act. (2) Notwithstanding anything contained in sub-section (1) (a) if any person other than a registered hotel keeper collects any amount by way of tax leviable under this Act, or (b) if any registered hotel keeper collects tax in excess of the amount chargeable under this Act, such person or such registered hotel keeper, as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customers and their availing of the amenities and services envisaged under the Act. On appreciation of all these factors the High Court came to the conclusion that the levy, being on amenities and services provided by the "hotel keeper" to his customers, it was not a tax on income and as such was within the legislative competence of the State Legislature. It is not necessary for us to go into the merits of the controversy raised before the High Court because the matter is no longer res integra. The constitutional validity of the Gujarat Tax on Luxuries (Hotels and Lodging Houses) Act, 1977, Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981, the Karnataka Tax on Luxuries (Hotels and Lodging Houses) Act, 1979 and the Wes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te is a qualitative one. Distinction based purely on the quantitative difference in the price is not a rational criterion to identify 'luxuries'. The impost based on the mere criterion of price which has no relation to the concept of luxuries is ultra vires the State power under entry 62, List II. (d) The scheme of the Act in so far as it makes the price and not quality, the sole basis for identification of the subject of the tax, makes no distinction between the components of the services which include both necessities and comforts, as distinguishable from 'luxuries'. Levy on such composite subject-matter is bad." M. N. Venkatachaliah, J. (as the learned C. J. I. then was), speaking for the Constitution Bench, rejected the contentions on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-relationship. This cannot be held to suffer from the vice of irrationality." The provisions of the Act are similar to the legislations of the four States mentioned above and the scheme of the Act is also substantially the same. Therefore, for the reasons and the conclusions reached by the Constitution Bench of this court in Express Hotels' case [1989] 74 STC 157; [1989] 2 SCR 893, the challenge to the validity of the Act on the ground of legislative competence has to be rejected. We may briefly notice the constitutional provisions under which the Legislature of the State of Jammu and Kashmir has the competence to legislate the Act. Article 370 of the Constitution of India, to the extent relevant, is as under : " Temporary provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmu and Kashmir with respect to the matters enumerated in entries 1 to 96 of List I, Schedule VII. The residuary power was retained by the State of Jammu and Kashmir. It is thus obvious that except the legislation relating to entries 1 to 96 of List I the Legislature of Jammu and Kashmir can legislate on every other matter. Section 5 of the Jammu and Kashmir Constitution reads as under : " Extent of executive and legislative power of the State.---The executive and legislative power of the State extends to all matters except those with respect to which Parliament has power to make laws for the State under the provisions of the Constitution of India." The Jammu and Kashmir Legislature has, therefore, the legislative competence to enact laws ..... X X X X Extracts X X X X X X X X Extracts X X X X
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