Luxury tax on clubs fails where the statutory inclusion of clubs within "hotel" has been invalidated.

Luxury tax under section 3B of the Karnataka Tax on Luxuries Act, 1979 could not be levied on a club for halls used for birthdays, anniversaries and get-togethers, because the charging provision applies only to luxuries provided in a hotel. Although the Act's definition of "hotel" had included a club, that inclusion had already been struck down in the governing precedent. Without a valid statutory basis treating a club as a hotel, the levy could not be extended to the assessee-club and was held invalid and unsustainable.

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Issues: Whether luxury tax under section 3B of the Karnataka Tax on Luxuries Act, 1979 could be levied on a club in respect of halls used for birthdays, anniversaries and get-togethers.

Analysis: Section 3B applies to luxuries provided in a hotel. The definition of "hotel" in section 2(4) includes a club, but that inclusion had already been struck down by the Division Bench in the governing precedent. In the absence of a valid inclusion of clubs within the expression "hotel", the charging provision could not be extended to the assessee-club. The levy, therefore, lacked legal support under the Act.

Conclusion: The levy of luxury tax under section 3B on the assessee-club was invalid and unsustainable, and the finding is in favour of the assessee.

Ratio Decidendi: A charging provision applicable only to hotels cannot be applied to a club when the statutory inclusion of clubs within the definition of hotel has been invalidated.

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