TaxTMI 
TaxTMI 
2009 (8) TMI 1112
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....counsel appearing for the Customs, Excise and Service Tax Department of the Central Government. The impugned provisions providing for the levy of luxury tax introduced in the Act are extracted hereunder for easy reference: "S. 2. Definition clauses.-. . . (ca) 'cable operator', means a person engaged in the business of receiving and distributing satellite television signals, communication network including production and transmission of programmes and packages for a monetary consideration. . . . (fa) 'Luxury provided by a cable operator' means any service by means of transmission of television signals by wire, where subscriber's television set is linked by metallic co-axial cable or optic fibre cable to a central system called the 'headend' and by using a video cassette or disc or both, recorder or player or similar such apparatus on which pre-recorded video cassettes or disc or both are played or replayed and the films or moving pictures or series of pictures which are viewed and heard on television receiving set at a residential or a non-residential place of a connection holder." Charging section: "S. 4. Levy and collection ....
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....rage households have television connection. However, from the statistics furnished we are unable to accept the position that cable TV connection is a facility enjoyed by all TV viewers. On the other hand, a cable TV connection costs a monthly subscription fee ranging from Rs. 150 to Rs. 200 payable by every subscriber. In our view, it is a facility enjoyed by the middle class and above and not by all those who have TV. It cannot be said that an annual subscription fee of around Rs. 2,500 payable by a customer for maintaining a cable TV connection besides the initial cost of connection paid is a very low amount which an average Keralite can afford easily. There cannot be any doubt that a cable TV connection is not a necessary requirement of an average member of the society because a person who has a television set can with the help of an ordinary antenna watch programmes telecast by Doordarshan in their channels. Therefore, we have to only consider whether the other tests laid down by the Supreme Court about luxury are satisfied in respect of a cable TV connection enjoyed by the customer. Luxury, though not defined in the Constitution, is defined under section 2(ee) of the Act, w....
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....V operators, they are required to pay 12.24 per cent of the amount collected from the subscribers towards service tax. It is their contention that the Supreme Court has upheld the validity of service tax under entry 97 of List I of the Seventh Schedule to the Constitution which is now specifically covered by article 268A of the Constitution and entry 92C of List I of the Seventh Schedule inserted by the 88th Amendment to the Constitution. Therefore, according to the petitioners, once service tax is levied on the cable services provided, the State has no authority to levy luxury tax on the very same services. The respondents contended that service tax is payable on the taxable service which is the total amount collected by the service provider from the subscribers for the cable TV services rendered. However, in this case it is very clear from the charging section that luxury tax is payable by the subscriber at the rate of Rs. 5 per connection per month and the liability of the service provider, namely, the petitioners, is only to recover the same from the customers and remit to the Government. We are in complete agreement with the argument of the State that the liability is not on t....
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.... 200 every month to the service provider for the cable TV connection retained by him, he has to pay a paltry sum of Rs. 5 towards luxury tax payable to the State Government. It is the settled position that so long as the levy of tax is constitutional, the court has no authority to go into the reasonableness of the levy or justification of the same which are purely matters of legislative policy. Further, cable TV subscribers as a whole or any substantial number have not approached this court raising objection against the levy which means that there is general acceptability of the tax liability by those who are liable under the Act. We, therefore, find no merit in the challenge raised by the individual subscriber against the levy of luxury tax on cable TV subscriber who enjoys the luxury. The next ground of challenge raised is based on article 14 of the Constitution and the reason for the challenge is that under the charging section 4 there is exemption in respect of connection provided by a cable operator engaged in the distribution of programmes of Doordarshan channels only. According to the petitioners, Doordarshan is also telecasting movies and entertainment programmes of the ....