2018 (8) TMI 527 - HC - VAT and Sales Tax

Inclusion of Furniture Rent in Turnover for Luxury Tax Valid, Penalties Reinstated

The court upheld the inclusion of rent charged on furniture and utensils in the total turnover for luxury tax assessment, dismissing the assessee's ... Levy of Luxury Tax - inclusion of rent charged on furniture and utensils in the total turn over for determination of the luxury tax - Kerala Tax on Luxuries Act, 1976 - Held that:- When, as submitted by the learned counsel, utensils and furniture are supplied by outsiders even on rent, then necessarily, such component cannot be included in the turn over of the assessee. However, the assessee has not been able to show even in one instance, when such an amenity or service was provided from outside and included in the turnover - The contention taken is a mere speculation without any backing on facts - appeal dismissed. Penalty - Held that:- The orders issued in Ext.P6 and P6(a) reveal that the assessee despite notice on inspection refused to furnish the books of accounts. The penalty imposed is also based on the materials recovered on inspection; assessing tax on the turn over found and proved by the recovered materials - penalty upheld. Appeal dismissed - decided against appellant. Issues:1. Inclusion of rent charged on furniture and utensils in total turnover for luxury tax determination.2. Setting aside of penalty orders for assessment years 2012-13 and 2013-14.Analysis:1. The appeal by the assessee revolves around the inclusion of rent charged on furniture and utensils in the total turnover for luxury tax assessment. The assessee claimed that the charges for utensils and furniture should be assessed as a transfer of the right to use under sales tax enactment, rather than being included in the total turnover. However, the court found that the provision under Section 4(2)(c) mandates the inclusion of amenities and services provided, which includes utensils and furniture, in the turnover for tax levy. The court dismissed the appeal, stating that the assessee failed to provide any instance where such amenities or services were provided from outside and included in the turnover, thus upholding the judgment of the Single Judge.2. The State's appeal pertains to the setting aside of penalty orders for the assessment years 2012-13 and 2013-14. The Single Judge had set aside the penalties citing no deliberate suppression, especially since the petitioner had paid tax for the admitted component and maintained accounting records. However, the penalty was imposed based on materials recovered during inspection, as the assessee had refused to furnish books of accounts despite notice. The court found no reason to interfere with the penalty orders and set aside the Single Judge's decision, allowing the State's appeal.