Hospital luxury tax upheld where accommodation and amenities exceed essential medical services and fall within the luxury entry.

A broad construction applies to Entry 62 of List II when examining a State tax on luxuries, together with the presumption of constitutionality. On that basis, hospital accommodation and ancillary amenities that provide comfort or pleasure beyond essential medical services may fall within the concept of luxury, while food, medicine and professional services remain excluded. The Kerala amendment taxing hospital luxury above the prescribed threshold was therefore held within State legislative competence under Entry 62 read with Article 246, and the constitutional challenge failed.

---

---

Issues: (i) Whether the amendment to the Kerala Tax on Luxuries Act, 1976 bringing luxury in hospitals within the tax net was beyond the legislative competence of the State under Entry 62 of List II of the Seventh Schedule to the Constitution of India.

Analysis: The legislative entry on taxes on luxuries is to be construed broadly, and the Court applied the settled presumption of constitutionality while examining the challenge only on the ground of competence. The word "luxury" in the statutory scheme was understood as comfort or pleasure beyond necessities, and the impugned provisions taxed only accommodation and amenities in hospitals exceeding the prescribed monetary threshold, excluding food, medicine and professional services. The Court held that such hospital accommodation and ancillary amenities can properly fall within the concept of luxury and that the State Legislature was competent to enact the amendment under Entry 62 of List II read with Article 246 of the Constitution of India.

Conclusion: The amendment was held to be intra vires and within the legislative competence of the State; the challenge failed.

Final Conclusion: The constitutional challenge to the hospital luxury tax provisions was rejected, and the writ appeals were dismissed.

Ratio Decidendi: A State law levying tax on hospital accommodation and amenities that provide comfort or pleasure beyond essential medical services is validly referable to Entry 62 of List II, and a legislative entry on luxuries must receive a broad construction consistent with the presumption of constitutionality.

---