TaxTMI 
TaxTMI 
2016 (11) TMI 83
X X X X Extracts X X X X
X X X X Extracts X X X X
....) (ii) of the Delhi Tax on Luxury Rules, 1996. The petitioner is an association of Banquet Hall Owners. According to its pleadings a large majority of its members are registered dealers under the Delhi VAT Act, 2004. The existing VAT regime in Delhi requires dealers who report return of an annual turnover of more than Rs. 20 lakhs, to comply with its provisions and file quarterly returns purporting the details of the transaction for the particular periods. The grievance in these proceedings is that the Delhi Tax on Luxury Act, 1996 (the Luxury Act), which according to the petitioners clearly bars levy and recovery of luxury tax "in respect of turnover of receipts for supply of food, drinks and goods such as cosmetics, medicines, nutritional....
X X X X Extracts X X X X
X X X X Extracts X X X X
....includes provision for accommodation of space provided in the banquet hall that also includes air cooling, air conditioning and other furniture etc., the rule cannot be characterised as ultravires. It is further submitted that though VAT amounts are excluded by virtue of Section 3 (5), its language states that tax amount would not be levied to the extent "turnover of receipts for supply of food, drinks and goods"; however, the remaining turnover of receipts is liable to luxury tax. It is submitted that in effect Rule 3 (2) (b) (i) and (ii) constitute dimensions of the mechanism for recovery of luxury tax and cannot be per se characterised as ultravires. 3. The revenue elaborates that the impugned rule only clarifies the peculiar situatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... space provided in a banquet hall which includes air cooling, air conditioning, chairs, tables, linen, utensils and vessels, shamiyana, tent, pavilion, electricity, water, fuel interior or exterior decoration, music, orchestra, live telecast and the like; (ii) services provided in a gymnasium or health club, which includes services of trainer or personal trainer, steam, sauna and the like; (iii) accommodation and other services provided in a hotel, the rate or charges for which, including the charges for air cooling, air conditioning, radio, music, extra beds, television and the like, is seven hundred fifty rupees per room per day or more whether such charges are received collectively or separately per room per day. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, 2005." Sections 3 & 4 obliged the proprietor and firm as a case - given the nature of activity in the ownership thereof, subjects proprietor and firm to the levy of Luxury Tax. 8. Rule 3 of the Luxuries Act reads as follow: 3. Incidence of levy of tax and maintenance of accounts (1) The proprietor shall be liable for collection and payment of tax for luxury as defined under clause (i) of Section 2 of the Act, provided at the establishment to a customer either directly or indirectly through any person or agency. (2) The tax shall be levied and collected by a proprietor- (a) in respect of luxury provided in the establishment (other than banquet hall) on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ning the aforesaid "Forms" in a computerised manner, then such proprietor shall take a printout of such Form on monthly basis and get each of the pages having auto generated serial number, sealed and certified by the Commissioner or any officer duly authorized by him in this behalf" 9. It is evident that the levy of luxury tax is upon all those incidents which are defined as luxury under Section 2 (i). The provisions of the Act lay out the manner of recovery which is through an obligation on the part of the proprietor or firms which provides luxury to register itself and collect luxury tax charges, from its customers in respect of the luxury service provided by it. At the same time Section 3 (5) incorporates an important exclusionary pri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt nowhere reveals that a provision akin or similar to Section 3 (5) existed. 11. As far as the argument with respect to "aspect theory" is concerned, the court is again unimpressed. The aspect theory is usually in the context of conflict between two legislatures - classically Federal & State or Provincial Legislatures. It has never been resorted to in case of legislation by the State under two heads. It is ofcourse quite likely that one activity may itself lead to two taxing incidents. But what is confronted here is the setting up of a subordinate legislation against a parent enactment. It is here that the general principle that rules can only supplement but never supplant the provisions of the Act is squarely applied. Whilst the gene....