Luxury tax on residential buildings upheld as a valid State levy despite GST repeal arguments.

Section 5A of the Kerala Building Tax Act, 1975 was treated as an independent levy on residential buildings completed on or after 1 April 1999 and having the prescribed plinth area. The Kerala High Court held that the State's power under Article 246 read with Entry 62 of List II continued to support a tax on luxuries, and the GST-related amendments did not remove legislative competence for this levy. The repeal and saving provisions were read as abolishing the Kerala Tax on Luxuries Act, 1976, not the separately created Section 5A charge. The luxury tax assessment was therefore held valid, and the challenge to jurisdiction failed.

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Issues: Whether the levy and demand of luxury tax under Section 5A of the Kerala Building Tax Act, 1975 on a residential building completed on or after 1 April 1999 survived the GST-related amendments and repeal provisions, and whether the State lacked legislative competence or jurisdiction to proceed with the assessment.

Analysis: Section 5A, inserted by Act 23 of 1999, was treated as an independent levy on residential buildings having the prescribed plinth area and completed on or after 1 April 1999. The constitutional scheme under Article 246 and Entry 62 of List II was applied to hold that the State retained power to levy taxes on luxuries. The post-amendment change to Entry 62 did not negate the validity of the levy already created by Section 5A. The repeal and saving provisions invoked in the GST enactment were read as repealing the Kerala Tax on Luxuries Act, 1976, not the later inserted Section 5A in the Kerala Building Tax Act, 1975. The earlier Division Bench view upholding the competence to levy luxury tax on residential buildings was followed.

Conclusion: The levy under Section 5A was held to be intra vires and within the State's competence, and the demand was not vitiated for want of jurisdiction.

Final Conclusion: The challenge to the luxury tax assessment failed, and the writ petition was dismissed.

Ratio Decidendi: A State levy on luxury residential buildings inserted by a later amendment remains valid where the State legislature has constitutional competence under Entry 62 of List II and the later repeal of a different luxuries statute does not extinguish that independently created levy.

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