TaxTMI 
TaxTMI 
2014 (9) TMI 452
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....istration Act, 1955. The petitioner is managing and administering Ayyappankavu temple and runs a Higher Secondary School, another English medium school and is also having an "auditorium", which according to the petitioner is functioning within the premises of the temple. As per section 4(1) of the Act, luxury tax is leviable in respect of any luxury provided in a hotel, house boat, hall, auditorium or kalyanamandapam or places of like nature, which are rented for accommodation for residence or used for conducting functions whether public or private exhibition. However, there is a proviso, which says that the above sub-section shall not apply to halls and "auditorium" located within the premises of places of worship owned by such religious institutions. 3. The main case of the petitioner is that the auditorium owned by the petitioner is within the premises of the place of worship and hence there cannot be any instance of luxury tax, in view of the proviso to section 4(1). But without any regard to the said provision, notices were issued to the petitioner proposing penalty for non-registration and payment of tax as prescribed, finally leading to the penalty orders and demand notices....
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....Tax on Luxuries Act, which were replied by submitting exhibit P11 objection dated April 4, 2009 for the year 2005-06 and similar objection in respect of the other two assessment years as well. It was further pointed out that the auditorium was situated just 100 metres away from the temple and road in between. "Ezhunnullippu" and other temple functions are being performed in the temple ground and auditorium situated adjacent to the temple. The temple feast or "annadanam" is being performed in the auditorium and that the auditorium is inseparably connected with the temple activities. 7. However, without any regard to the objection preferred by the petitioner, penalty was imposed by the first respondent for the years 2005-06 to 2007-08 as per exhibits P12 to P14, which was sought to be realised as per exhibits P15 to P17 demand notices. The petitioner also challenges exhibit P18 Circular (Circular No. 31/2008 dated July 11, 2008) issued by the third respondent, stipulating that the assessing authority invariably shall levy the penalty in all non-compliance cases. The petitioner has got a further case that the first respondent lacks jurisdiction to pass the impugned orders for want of....
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....C 547 (SC); [1995] 3 KTR 37 and Express Hotels Private Ltd. v. State of Gujarat [1989] 74 STC 157 (SC), it is stated that the concept of "luxury" in the legislative entry takes within everything that can fairly and reasonably be said to be comprehended in it. The respondents point out that the High Court of Karnataka has already upheld the validity of Karnataka Taxes on Luxuries Act, 1979 containing similar provision. The legislation has been upheld in Sri Ramaseva Mandali Trust (R) v. Assistant Commissioner of Commercial Taxes [2003] 133 STC 574 (Karn) and in Magaji Mhavarsa Kamakshi Bai v. Assistant Commissioner of Commercial Taxes, District Circle-1, Mysore [2006] 146 STC 473 (Karn) holding that marriage halls or mandapams are leviable to luxury tax. 9. Reference is made to the decision of the apex court in Tamil Nadu Kalyana Mandapam Assn. v. Union of India [2005] 1 VST 180 (SC); [2004] 135 STC 480 (SC); [2004] 267 ITR 9 (SC); AIR 2004 SC 3757, holding that tax on luxury and service tax do not overlap each other, asserting that the challenge against section 4(2)(c)(i) of the Kerala Tax on Luxuries Act has no legal basis at all. With reference to exhibit P8 circular bearing No.....
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....the Constitution of India and on the other hand, it has to be considered with reference to infringement of article 246 of the Constitution of India. This being the position, only the Union Government has power to legislate on this subject and hence the law is sought to be declared as unconstitutional. This court finds it difficult to accept the said proposition for more than one reason. 13. Entry 62 of List II (Seventh Schedule) and entry 92C of List I (Seventh Schedule) read as follows: "62. Taxes on luxuries, including taxes on entertainment, amusements, betting and gambling. 92C. Taxes on services." The "Act" in question was enacted by the Legislature of the State with reference to the source of power under entry 62 of List II as early as in the year 1976. Entry 92C was introduced in List I only as per 88th amendment of the Constitution in the year 2003. In other words, there is no case for the petitioner that there was a transgression of power by the State encroaching into the List I-Union List, while bringing about the statute. In other words, at the time of enactment of the Kerala Tax on Luxuries Act in the year 1976, there was no barrier at all in bringing about such a l....
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....ng activity or such other activity involving goods or such other articles. 17. The very concept of "luxury" is a relative one. Something ordinary for a particular class or person may be a matter of luxury for some others. It is with this distinction in mind, that the Legislature clearly stipulated that, in respect of the luxury in auditorium, the value of the comfort/pleasure, which could be quantified up to Rs. 3,000 per day, by way of rent payable to the auditorium alone is brought within the tax net. In other words, such types/classes of auditorium, which do not fetch any rental value of not more than Rs. 3,000 per day have been consciously left out from the purview of luxury/comfort and only such other auditorium/halls having more rental value, have alone been reckoned as of rendering any comfort or luxury, the grade of which has been sub divided into three different groups as (i), (ii) and (iii), stipulating different rate of taxes payable, depending upon the gross charges for accommodation and other amenities provided. This being the position, there is nothing violative of constitutional mandate, nor is there any infringement of any right of the petitioner, much less any fun....
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....ide of the Chittur road lying north to south . On the northern side of the said premises also, there is a road which cuts across the Chittur Road and proceeds further eastwards as "Ayyappankavu East Extension Road", touching and crossing another road lying north to south. It is at the said extremity of the Ayyappankavu East Extension Road, that the auditorium/alleged Devaswom dining hall is situated in Sy. No. 43/4 of Ernakulam village. The premises where the Ayyappankavu temple is situated, as mentioned above, is in Sy. No. 206/2-4 of Ernakulam Village. In the said premises, admittedly guarded by compound walls, apart from Ayyappankavu temple and Siva temple, the other structures available are only the Gurudeva mandapam, devaswom counter and santhimadam. The "sketch" produced by the petitioner shows that the concerned auditorium is situated far away from the place of worship, that too in two different survey numbers. 21. The petitioner has got a case that the property was lying as a continuous and contiguous block earlier and that the Chittur Road cutting through the property was surrendered by the petitioner, which made the "temple premises" on one side of the road and the "temp....
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....e, "the ownership of the building by the devaswom" and the location of the building "within the premises of the place of worship" stood answered and that the Department had no case that the buildings were located at any place away from the temple. It was accordingly, that the writ appeal was allowed, quashing the impugned demand notice, enabling the Department to conduct an enquiry to ascertain whether the building was located at any place other than the premises of the temple, i.e., in and around the temple, which does not mean that any building situated outside the compound wall of the place of worship was also intended to be given the benefit of exemption. This becomes very clear from the last sentence, where it is observed that, if the buildings were located at any station outside the place of location of the temple, the second respondent was free to identify such buildings, issue notice and assess and recover the tax. This court finds that the reliance sought to be placed on the said decision has no basis at all. 24. The petitioner contends that the impugned orders imposing penalty have been passed in a quite mechanical manner and that the same is by virtue of the direction g....
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.... for the petitioner that the first respondent is not vested with any power to impose penalty, as he has not been authorised under section 3 of the Act by notification, so as to act as an authority under the Act. It is stated that the authorisation provided earlier under the KGST Act ceased to exist, when the KVAT Act came into force from April 1, 2005 and that section 98 of the KVAT Act provides only limited application to the KGST Act, in respect of goods and proceedings. 27. The said contention has been specifically rebutted by the respondents in their counter-affidavits. It is stated in paragraph 6 of the counter-affidavit filed by the respondents 3 and 4 that SRO No. 1077/95 dated August 7, 1995 was issued under the authority of section 3(1) of the Kerala Tax on Luxuries Act authorising the different categories of officers appointed under section 3(2) of the KGST Act, to function as the assessing authorities under different provisions of the Kerala Tax on Luxuries Act, 1976. It is stated that the idea of the petitioner that SRO No. 1077/95 stands repealed by virtue of section 98 of the KVAT Act, is not correct. Section 98 of the KVAT Act just restricts the application of provi....
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....07-08. The date of hearing was scheduled on March 18, 2009. Even before the issuance of the said notices, the petitioner remitted the registration fee with compounding fee as prescribed, obtaining registration and a copy of the challan was produced before the concerned authority. 30. There is a reference in exhibits P8 to P10 notices, in respect of another notice dated October 17, 2008. But it is relevant to note that even in the earlier notice, as borne by exhibit P4 dated June 12, 2008 (alerting the petitioner as to the necessity to take registration under the Act and to satisfy the tax liability), it was stated that the petitioner was liable to take registration and to pay the tax only with effect from April 1, 2008 and action was proposed, if registration was not taken with effect from April 1, 2008 and the tax was not paid with interest within seven days. The petitioner has later obtained registration and satisfied the tax. The question is whether the course pursued by the petitioner could be regarded as a conscious act to evade the tax, to be mulcted with penalty under section 17A and even if it be so, whether the quantum of punishment, at the double the rate of tax sought t....
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.... but is a consequence, where some discretion is vested with the authorities concerned, who "may" impose appropriate penalty, on proven attempt of evasion. 34. Coming to the case in hand, the penalty is sought to be imposed by issuing exhibits P8 to P10 notices in respect of the assessment years 2005-06 to 2007-08. As per the said notices, hearing was scheduled on March 18, 2009, on receipt of which, the petitioner submitted detailed statement of objections, as borne by exhibit P11. As per exhibit P11, it was asserted that there was no wilful omission or deliberate attempt to evade the tax, nor was there any failure to keep the accounts properly. There was no suppression or omission and even as per exhibit P4 notice dated June 12, 2008, the petitioner was required to take registration and to pay the tax only with effect from April 1, 2008. It is also asserted that the petitioner was under the bona fide impression that the petitioner was entitled to have exemption by virtue of the "proviso" to section 4 of the Act, as the auditorium is mainly intended for the temple rituals such as "annadanam" and was located in the premises of the worship, though there was a road in between, which ....