Strict construction of luxury tax law excludes members' club from hotel status when rooms and amenities are only incidental.

A charging provision imposing luxury tax on lodging accommodation must be strictly construed, and a members' club does not fall within the definition of a "hotel" merely because it incidentally provides rooms, food or allied amenities to members or reciprocal guests. The statutory scheme targeted commercial lodging accommodation provided by way of business for monetary consideration, not a club whose dominant function was social recreation and promotion of golf. On that construction, notices and assessment proceedings issued on the footing that the club was a hotel were unsustainable.

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Issues: Whether a members' club providing rooms, food and allied facilities to members and reciprocal guests can be treated as a "hotel" carrying on business so as to attract luxury tax under the Karnataka Tax on Luxuries (Hotels and Lodging Houses) Act, 1979, and whether notices and assessment proceedings issued on that basis were valid.

Analysis: The charging provision fastened liability only in respect of luxury provided in a hotel, and the statutory definition of hotel contemplated a building or part thereof where lodging accommodation was provided by way of business for monetary consideration. The definitions of "hotel" and "luxury provided in a hotel", read with the charging and machinery provisions, showed that the Legislature intended to tax lodging accommodation of a commercial hotel or lodging house, not every place where rooms were made available. The club's dominant activity remained promotion of the game of golf and social recreation; the provision of rooms and refreshments to members or reciprocal guests was merely incidental. In common and commercial parlance, a club of this kind was distinct from a hotel, and the charging provision could not be expanded by implication to cover a club merely because it supplied accommodation or amenities.

Conclusion: The club was not liable to be treated as a hotel under the Act, and the notices and assessment orders were unsustainable.

Final Conclusion: Luxury tax proceedings cannot be sustained against a members' club unless the club is shown to have assumed the character of a hotel or lodging business within the charging provision.

Ratio Decidendi: A charging provision imposing luxury tax on lodging accommodation in a hotel must be strictly construed, and a members' club does not fall within the definition of hotel merely because it incidentally provides rooms or related amenities to members or reciprocal guests.

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