Statutory interpretation of "50 per cent occupancy" upheld the Revenue's luxury tax computation under the Gujarat tax scheme.

Under section 3 of the Gujarat Luxuries (Hotels and Lodging Houses) Tax Act, 1977, "50 per cent occupancy" in the consolidated payment regime was held not to mean actual occupancy of rooms. The Court distinguished that expression from the separate phrase "actual occupancy" used elsewhere in the same scheme and applied the rule that distinct statutory words must be given independent meaning. It rejected a construction that would make the words "on the basis of" redundant and disturb the graded tax structure. The Revenue's method of computation was therefore upheld, and the challenge to the assessment demanding differential luxury tax failed.

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Issues: Whether, under section 3 of the Gujarat Luxuries (Hotels and Lodging Houses) Tax Act, 1977, the expression "50 per cent occupancy" in the consolidated payment regime means actual occupancy of rooms or 50 per cent of the available rooms as per the average declared tariff, and whether the assessment based on the Revenue's interpretation was valid.

Analysis: The statutory scheme distinguished between "occupancy" and "actual occupancy" in the same provision. In clause (a) of the relevant table, the legislature used the words "on the basis of 50 per cent occupancy as per the average declared tariff", whereas clause (b) expressly referred to payment "on the basis of actual occupancy as per the declared tariff". The two expressions were therefore not interchangeable. Reading "occupancy" in clause (a) as "actual occupancy" would render the wording "on the basis of" redundant and would also disrupt the graded structure of tax liability, producing an irrational result when compared with the optional regime under clause (b). The Court also noted that the statutory authority was not required to be left to avoid interpretation where the question was directly raised before it.

Conclusion: The expression "50 per cent occupancy" does not mean actual occupancy. The Revenue's method of computation under section 3 was upheld and the challenge to the assessment failed.

Final Conclusion: The petitioners were not entitled to the interpretation sought by them, and the assessment order demanding differential luxury tax was sustained.

Ratio Decidendi: Where a taxing provision uses distinct expressions in the same scheme, each expression must be given independent meaning, and a construction that renders statutory words redundant or leads to an absurd tax result must be rejected.

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