TaxTMI 
TaxTMI 
2011 (1) TMI 1253
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....List II of the Seventh Schedule to the Constitution of India or in the alternative to read down the provision to include only those halls that are used for the purpose of marriages, receptions or matters related thereto. The petitioner claiming to be an apex body of the machine tool industry secured the approval of the State Government to establish the Bangalore International Exhibition Centre (hereinafter referred to as "BIEC") to create a state of art exhibition centre to further facilities in Bangalore for promoting business of machine tools manufacturing industries, as a consequence trade and commerce, with the support of a Rs. 30 crores grant 1See page 401 infra. from the Ministry of Commerce, Government of India under the Industrial Infrastructure Upgradation Scheme as approved by the Government of Karnataka under the Infrastructure Policy, 1997. The petitioner when issued with, a notice dated October 1, 2008, annexure A, by the fifth respondent to register under the Act and pay taxes due with effect from January 2007 under section 3C read with the definition of the term "marriage hall" under section 2(5B) of the Act, responded by reply dated October 10, 2008, annexure ....
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....letter dated July 27, 2009, annexure K, accepted the report of the Commissioner, and sequentially the 6th respondent by notice dated September 1, 2009, annexure L called upon the petitioner to comply with the orders for payment of tax and penalty under the Act. The Constitution Bench of the apex court in Godfrey Phillips India Ltd. v. State of U.P.[2005] 139 STC 537 (SC), having held, tax on luxury can only be levied on "activities of indulgence, enjoyment and beyond necessities of life", i.e., services and not a levy on goods, articles or property, it is submitted section 3C read with section 2(5B) of the Act cannot but be a charge on luxuries provided in a "marriage hall" and not on income generated from renting "BIEC". According to the petitioner, in the absence of an allegation that "BIEC" was let out on hire or put to use for marriage, or reception or matters related therewith, not falling within the description of either seminar, convention, banquet, meeting or exhibition-cum-sale hall, as in the definition of the term "marriage hall" under section 2(5B) of the Act, the impugned notices do not satisfy the condition precedent for levy of luxury tax under section 3C of th....
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....tended that if the definition of "marriage hall" is not liable to be struck down then it would have to be read down to exclude letting out of halls, per se, in the light of the decision of the apex court in Godfrey Phillips India Ltd.'s case [2005] 139 STC 537 (SC). The petition is opposed by filing statement of objections dated December 15, 2009 of the respondents, inter alia, contending that "BIEC" is put to use for exhibition-cum-sale where dealers exhibit their wares and sales are effected thereof tantamounting to renting out of the halls and hence subject to payment of tax under the Act. The issue of notices, proposition notice and correspondence between the parties are admitted and that recovery of tax, it is stated, was due to the rejection by the State of the petitioner's request for exemption from the levy of luxury tax. At paragraph 7 of the statement of objections, it is stated that applying the enlarged definition of the term "marriage hall" in section 2(5B) the petitioner-association having let on hire BIEC for exhibition-cumsale, seminars, conferences, etc., and collected hire charges of more than Rs. 5,000 per day, is liable to pay luxury tax. At paragraph 8 it....
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....fe but luxury. It is lastly contended that the letting out of halls for exhibition-cum-sale by similarly circumstanced firms, having obtained temporary registration certificates under the Karnataka Value Added Tax Act, 2003, the petitioner cannot claim exception. The learned senior counsel for the petitioner points out to sections 2(5B), 3C, 2(1A), 2(4B) and the Karnataka Taxation Laws (Amendment) Act, 1999, Karnataka Act No. 4 of 1999 to advance the following contentions: (i) The substitution for the words "whether or not such marriage or reception or matters related therewith regularly conducted" with the words "and includes seminar, convention, banquets, meeting or exhibition-cum-sale hall or such other hall as may be specified by the Commissioner, whether functions are conducted in such halls regularly or not" by Karnataka Act No. 4 of 1999, in section 2(5B), definition of "marriage hall", must be read and understood as if the inclusive portion is governed by the latter phrase "whether functions are conducted in such halls regularly or not", meaning thereby that "BIEC" admittedly not put to use for marriage function or reception or matters related thereto regularly or ....
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....contend that even if marriage reception or matters relating therewith are not conducted in BIEC, nevertheless, falls within the definition of the term "marriage hall". The building where even if accommodation is not provided for marriage, reception and matters related therewith, but provided for conventions, seminars, banquets, meetings or exhibition-cum-sale, are activities of indulgence, enjoyment or pleasure and hence the charging section is intra vires is the contention. It is next contended that the operation of the charging section cannot be determined or restricted by the definition clause, by placing reliance upon the decision of the Co-ordinate Division Bench in Magaji Mhavarsa Kamakshi Bai Kalyana Soudha Samudaya Bhavan, Nanjangud's case [2006] 146 STC 473 (Karn). In reply, learned senior counsel for the petitioner submits that the decision in Magaji's case [2006] 146 STC 473 (Karn) rendered having regard to the provisions of law under the unamended Act, and prior to the decision of the apex court in Godfrey Phillips India Ltd.'s case [2005] 139 STC 537 (SC) is impliedly overruled to the extent that it is contrary to the law laid down in Godfrey Phillips India Ltd.'s c....
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....he word 'luxuries' in the entry refers to activities of indulgence, enjoyment or pleasure. . ." It is true that a co-ordinate Division Bench of this court in Magaji's case [2006] 146 STC 473 (Karn), following the decision in Express Hotels case [1989] 74 STC 157 (SC), upheld the constitutionality of the Act observing that the charging section creates a charge on luxury provided in a marriage hall and is not restricted, to the luxuries only in respect of commodities or services for which the other section has taken care, having regard to the provisions of the Act as it stood then. Consequent upon the decision in Godfrey Phillips India Ltd.'s case [2005] 139 STC 537 (SC), the provisions of the Act were amended so as to fall in line with the law declared. The definition of "marriage hall" in section 2(5B) prior to its amendment by Karnataka Act No. 4 of 1999 read thus: "2(5B) 'Marriage hall' means, kalyana mantap, shadi mahal, community hall, a building or part of a building where accommodation is provided for marriage or reception or matters related therewith, whether or not such marriage or reception or matter related therewith are regularly conducted." By the Karnata....
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....n the case of Commissioner of Sales Tax [1961] 12 STC 182, it was observed thus (page 190 in 12 STC): ". . . In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assumed deficiency." A bare reading of the definition of the term "marriage hall" discloses that the Legislature indeed, sought to include amongst others, an exhibition-cum-sale hall, the building or part of the building, where accommodation is provided for marriage reception or matters related therewith, where functions are conducted in such halls regularly or not, chargeable to luxury tax under section 3C of the Act in respect of luxuries as defined under section 2(4B) including charges for the item in section 2(1A). However, essentially what falls for interpretation are the expressions "a building or a part of a building where accommodation is....