TaxTMI 
TaxTMI 
2012 (10) TMI 975
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....009 as the leading case. 2. The petitioner states that it is an ayurvedic hospital, where various traditional ayurvedic treatments are provided to patients. For this purpose, they have appointed qualified doctors and nursing staff. It is also stated that they are maintaining 26 cottages, 7 rooms and a general ward. They have obtained necessary licences issued by the Drugs Controller and the Assistant Excise Commissioner, Palakkad. They have also obtained registration as a private hospital from the Chalissery Grama Panchayat and also licence under the Kerala Panchayat Raj Act, 1994. 3. By the Finance Act, 2008 (Act 21 of 2008), with effect from April 1, 2008, certain amendments were made to the Kerala Tax on Luxuries Act, 1976 (hereinafter....
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....extending coverage of the Act to hospitals unconstitutional and also to quash exhibit P3 notice. 5. During the course of his arguments, counsel for the petitioner mainly raised two contentions. First contention was that the establishment being a hospital, the Act became applicable only by virtue of Act 21 of 2008 and with effect from April 1, 2008, and therefore, the demand contained in exhibit P3 notice for the production of the documents from 2003 is illegal. The second point raised was that the Act, to the extent it covers hospitals, is beyond the powers conferred on the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution of India. 6. The respondents have filed a detailed counter-affidavit justifying....
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....ed by the petitioner deserves acceptance. Consequently, the Act cannot have application to the petitioner's hospital for any period prior to April 1, 2008 and hence the demand for production of documents and details for any prior period is illegal. 10. The second contention regarding absence of legislative competence was argued mainly relying on the apex court judgment in Godfrey Phillips India Ltd. v. State of U. P. [2005] 139 STC 537 (SC); [2005] 4 RC 186; [2005] 2 SCC 515. Before proceeding further, it is necessary to understand the principles laid down by the apex court in the aforesaid judgment. Godfrey Phillips [2005] 139 STC 537 (SC); [2005] 2 SCC 515 was a case where the appellants were either manufactures, dealers or sellers o....
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....aracteristics. (vide paragraph 74). ... Hence on an application of general principles of interpretation, we would hold that the word 'luxuries' in entry 62 of List II means the activity of enjoyment of or indulgence in that which is costly or which is generally recognized as being beyond the necessary requirements of an average member of society and not articles of luxury. (vide paragraph 83). ... Given the language of entry 62 and the legislative history we hold that entry 62 of List II does not permit the levy of tax on goods or articles. In our judgment, the word 'luxuries' in the entry refers to activities of indulgence, enjoyment or pleasure. Inasmuch as none of the impugned statutes seek to tax any activity and adm....
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....pect of a hospital, for charges of accommodation for residence for use of amenities and services, at the rate of ten per cent per room where the gross charges, excluding charges of food, medicine and professional services, is one thousand rupees per day or more." 14. Section 4E providing for registration of hospitals read as under: "4E. Registration of hospitals.-Every hospital having not less than five rooms to be rented for accommodation of patients for treatment or otherwise for which gross charges excluding charges for food, medicine and professional services is one thousand rupees or more per room, shall get itself registered with such authority and in such manner as may be prescribed, and the application for registration shall be ac....
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....ulgence, enjoyment or pleasure to be within the legislative competence of the State Legislature under entry 62, List II. The petitioner contended that their hospital is providing ayurvedic treatment to both inpatients and outpatients and that the amenities enjoyed or services provided to the patients are incidental to their treatment for various ailments and therefore is not an indulgence, enjoyment or pleasure or beyond the requirement of an average member of the society, to be taxed as a luxury under the Act. This again, in my view, is an untenable contention. 18. Competence of the Legislature under entry 62, List II to levy tax on luxuries cannot be and was not disputed. It is trite that in deciding the question of legislative competenc....