TaxTMI 
TaxTMI 
2017 (1) TMI 581
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....ion in hospitals and hospitals are now more customer-focal and patient- centric. A lot of attention is now bestowed on physical environment and services. 3. While the primary business of the hospitals is still healing, accommodation has become much more comfortable and several adscitious services, unthinkable a few years ago, have become common place and routine in many of the hospitals. It is recognised by the doctors and healers that the ambience and surroundings of the hospitals, especially the accommodation provided to the patients would impact recovery and contribute to the recuperative processes. Many of the hospitals now have much better infrastructure as compared to earlier. Furniture and interiors have been spruced up to give the patients and bystanders all the comforts and luxuries as are possible. The focus of hospitality in hospital is more on the interior design, trained staff and technologies like Televisions and inter connectivity and such other facilities and patients are willing to pay for all these. The harbinger of these changes was the advent of what is known as medical/ hospital tourism. Patients travel from other countries and States for medical procedures on....
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....nge before the learned Single Judge was that the appellants were, by the authorities under the Act, sought to be assessed and penalised under the relevant provisions of the Act for not obtaining registration under the Act and for not maintaining or returning the assessments as mandated by the provisions contained therein. The challenge of the appellants obviously was that they are not liable to be registered under the Act or to be assessed thereunder and that, consequently no penalty could be imposed on them for the alleged violations mentioned in the impugned notices issued by the tax authorities. 6. The learned Single Judge, after elaborate consideration of all the materials and factors, dismissed the writ petitions and repelled the challenge against the constitutionality of the impugned amendments holding it to be within the legislative competence of the State Legislature and finding it to be intra vires the constitutional mandate. 7. We have heard these appeals in detail and we are in conformity with the findings of the learned Single Judge for the reasons, as we will presently state, which are not in variance with those given by the learned Single Judge, but complementary to....
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....astic provisions of such legislation may be, if it does not, in fact, contravene any of the Articles of the Constitution which lay down the fundamental rights, then it would be the duty of the court to uphold that legislation" . 11. It is now well settled that a law made by a Parliament or Legislature can be struck down by the courts only on two grounds, namely, the legislature lacks legislative competence and that it has been passed in violation of any of the fundamental rights guaranteed in Part III of the Constitution or any other constitutional provision. The Hon'ble Supreme Court in State of A.P. v. Mc Dowell & Co. ((1996) 3 SCC 709) had reiterated this very emphatically in its observations contained therein, which, for easy reference, is extracted as below: "The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the legislature can be struck down by courts on two grounds and two grounds alone, viz., (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part II of the Constitution or of any other constitutional provision. There is no third ground. ..... .........
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....he the appellants' contention that the amendments are beyond the competence of the legislature only because there can be no activity in any hospital, which could be termed or classified as 'luxury'. 13. The Act has been obviously legislated by the Legislature of Kerala invoking its nomothetic powers under Entry 62 List II of VII Schedule of the Constitution of India. Entry 62 relates to 'taxes on luxuries, including taxation on entertainments, betting and gambling'. The Act was originally enacted in the year 1976 and it was intended to be an Act to provide for levy and collection of tax on luxury offered in the hospitals and lodging houses. However, by the Finance Act, 1994, the words 'provided in the hospitals and lodging houses' were omitted and thus the Act was re-cast to be one for the levy and collection of tax on luxury. The fact that the State Legislature is competent to legislate on luxuries is obvious from Entry 62 List II of VII Schedule of the Constitution. The assertions essentially, in these writ appeals, impelled by the appellants are that there is no luxury in hospitals and that therefore, nothing can be taxed under the Act. This contenti....
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....ist II. All the earlier judgments including Abdul Kadir were considered by the Hon'ble Supreme Court in assessing the issue as to whether 'luxury' would mean an article or a thing or whether it could be construed to be an experience of comfort and pleasure in the circumferential purlieus of Entry 62 List II of VII Schedule of the Constitution. The Hon'ble Supreme Court then held that the word 'luxuries' in Entry 62 List II means the activity of enjoyment or an indulgence, which is generally recognised as being beyond the necessary requirements of an average person and that it does not mean an article of luxury. The emphatic declaration of law thus made by the Hon'ble Supreme Court is found in paragraph 85 of the judgment, which deserves a complete reading and is, therefore, reproduced below: "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 or indulgence in that which is costly or which is generally recognised as being beyond the necessary requirements of an average number of society and not articles of luxury." 16. The Hon'ble Supreme Co....
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....unction of the Lists in Schedule VII of the Constitution is not to confer a power but to merely demarcate the legislative field and so must, as far as possible, be given a broad and comprehensive interpretation. The doctrine of liberal interpretation has a special application in the ambit of various legislative powers included in the VII Schedule because the allocation of the subjects to the Lists is not by way of scientific or logical definitions but by way of a mere simplex enumeratio of broad categories (see Assistant Commr, Urban Land-tax v. Buckingham and Carnatic ((1970) 1 SCR 268). None of the items in the Lists are to be read in a narrow or restrictive sense. In construing an entry in a list conferring legislative powers, the widest possible construction, according to their ordinary meaning, must be put upon the words used therein (see Punjab Distilling Industries Ltd. v. CIT (AIR 1965 SC 1862) and Balaji v. Income-tax Officer, Akola (AIR 1962 SC 123)). In Check-post Officer v. Abdulla (AIR 1971 SC 792), these principles were re- stated very powerfully. It was unequivocally affirmed that a legislative entry does not merely enunciate powers; it specifies a field of legislati....
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....ines the word 'luxury' to mean a commodity or service that ministers comfort or pleasure. The facilities that are provided in a hospital which are beyond the essential requirements like food, medicine, and professional services and a basic room have been accepted as luxury by the legislature in classifying them as such under the Act through the impugned amendments. 22. The definition of luxury in Godfrey Phillips (supra) has been declared by the Hon'ble Supreme Court to mean an activity of indulgence or enjoyment in that which is costly or which is generally recognised as beyond the necessary requirements of an average number of society and not articles of luxury. Hence, such activity which is intended to provide comfort and pleasure beyond the requirements of the constitutive facilities of a hospital ,which are essentially in the nature of food, medicine and professional services and a basic accommodation, would then satisfy the definition and tests of luxury laid down by the Hon'ble supreme Court in Godfrey Phillips (supra). The tax levied is not on the article providing luxury but on the experience of such luxury. To employ a simple analogy - tobacco is an artic....
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....lude all the essential components of healing and care given by the hospital and includes only that which is not essential to such therapeutic care or healing. The legislature obviously thought that such accommodation and amenities beyond the pecuniary limit of Rupees one thousand can be classified as luxury and it is not something that the courts can interfere with merely because the perception which it holds, even it does, that such pecuniary limits are too low in order to classify as a luxury. We have to be aware of the fact that the legislature legislates for all the people of the State. It is intended to cater to all the classes in the socio-economic and cultural categories of people and it should be presumed that such legislation has been made taking into account all the relevant criterion including the economic one so as to cater not to a particular class but the entire citizenry. Legislation stems from the experience of the evils and should not, therefore, be impeded by the particular beliefs or opinion that certain classes of people would hold. The wisdom of legislature has to be respected as being for the good of the citizenry at large and not to the sentiments of a few. T....