AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (12) TMI 714
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....s Act, 1979 (hereinafter referred to as, "the Act") by Act No. 5 of 2000 as unconstitutional and beyond the powers of the State Government. By the aforesaid amendment, "club" is included in the definition of "hotel" under section 2(4) of the Act and an Explanation is inserted. The same is extracted hereunder: (1)Reported as Century Club v. State of Karnataka [2007] 5 VST 292 (Karn). "2(4) 'Hotel' means a building or part of a building where lodging accommodation with or without board is by way of business provided for a monetary consideration, and includes a lodging house, club and holiday resorts. Explanation.-A club, a lodging house and a holiday resort for which charges are collected for providing accommodation ....
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....se appeals are filed by the appellants urging various grounds with a prayer to set aside the impugned order, quash the impugned notification and struck down the amended provision. Since the matter lies in a narrow compass, it is not necessary for us to refer to the various legal contentions and the decisions pressed into service by the learned counsel for the parties. In the facts and circumstances of the case, the grounds urged, contentions canvassed and the decisions relied upon by the learned counsel for the appellants, the following points that would arise for consideration of this court: (a) Whether the inclusion of "club" in the definition of "hotel" and insertion of Explanation to section 2(4) of the Act and giving the amended prov....
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....e apex court in the case of State of Andhra Pradesh v. H. Abdul Bakshi and Bros. [1964] 15 STC 644. The relevant portion is extracted from Bangalore Golf Club case [1999] 115 STC 338 (Karn), which is reproduced hereunder (at page 342 of 115 STC): "The expression 'business' though extensively used is a word of indefinite import. In taxing statutes it is used in the sense of an occupation, or profession which occupies the time, attention and labour of a person, normally with the object of making profit. To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure. But to be a dealer a person need not follow the activ....
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....eported in AIR 1985 SC 582, wherein it was held that any Explanation to a statutory provision shall be supplemental to it and the object of adding Explanation are mentioned at paragraph 52 in that case; the same is extracted hereunder: "52. Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is- (a) to explain the meaning and intendment of the Act itself, (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful, (d) An E....
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....een inserted". In respect of tax statutes, to bring an assessee under tax umbrella and to levy tax for the first time, the amendments by way of insertion or substitution to the provision of the Act shall always be prospective and shall not be retrospective. This position of law is well-settled by the apex court in the case of R. Rajagopal Reddy v. Padmini Chandrasekharan reported in [1995] 213 ITR 340. Relevant portion is extracted: "It is obvious that when a statutory provision creates a new liability and a new offence, it would naturally have prospective operation." The retrospective amendment is also bad being violative of principles of natural justice as held by the Supreme Court in the case of National Agricultural Co-operative Marke....
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....he absence of element of business, the observation of the learned single judge in the impugned order is contrary to the definition. The further observation of the learned single judge that it matters little whether the activity of the club is by way of business or otherwise, is also not legally correct. It is well-settled that each word of a statutory provision must be given its weight and in this connection the famous words of judge learned Hand extracted in the case of K.P. Varghese v. Income-tax Officer, Ernakulam reported in [1981] 131 ITR 597 (SC), are reproduced hereunder (at page 604): ". . . it is true that the words used, even in their literal sense, are the primary and ordinarily the most reliable source of interpreting the mean....