Convention centre collections linked to hotel operations were treated as part of the expenditure-tax base under a broad statutory reading.

Rent and other collections from a convention centre operated by a five-star hotel were treated as part of the expenditure-tax base because the definition of "hotel" in section 2(6), read with section 3(1) and its explanation, was construed broadly. The expression "otherwise" was read to include accommodation and facilities used for conferences, meetings and similar purposes. As the convention centre was owned and managed as part of the hotel business, separate accounts or separate facilities did not make it a distinct business. Applying substance over form, the convention centre was treated as an extension of the hotel and the collections were held exigible to expenditure tax.

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Issues: Whether rent or collections from a convention centre run by a five-star hotel form part of the chargeable expenditure under the Expenditure Tax Act, 1987.

Analysis: The statutory definition of hotel in section 2(6) was read with the charging provision in section 3(1) and its explanation. The expression "otherwise" in the charging provision was treated as broad enough to cover accommodation provided for conferences, meetings and similar uses. The convention centre was owned and managed by the assessee as part of the hotel business, and separate accounts or separate facilities did not, by themselves, establish a distinct business. Applying the substance over form principle, the convention centre was treated as an extension of the hotel rather than an independent unit outside the tax net.

Conclusion: Collections from the convention centre were held to be exigible to expenditure tax, and the assessee's appeal failed.

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