AI Drafter 
TaxTMI 
TaxTMI 
2018 (10) TMI 452
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....ub herein is located in Kochi. Even then, the learned counsel for the petitioner would contend that the Division Bench has wrongly arrived at the conclusion that a club could be charged with luxury tax on the renting of rooms it does at its premises. The learned counsel would argue for referring the matter to a Larger Bench for fresh consideration. 2. On the provisions under the Kerala Tax on Luxuries Act, 1976 ('Act', for short) it is asserted that a Club would not fall under the definition of 'hotel' and hence the charge under Section 4 would be limited to the renting out of hall, auditorium or kalyanamandapam attached to such Clubs. Sub-Section (2A) of Section 4 being the levy per member at the rate of Rs. 100 is the only levy....
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....ted in the State sales tax enactment. The Honourable Supreme Court dilated upon the concept of taxation and found it to have four components being (1) the character of the imposition, (2) the person on whom the levy is imposed, (3) the rate at which the tax is imposed and (4) the measure or value to which the rate is applied. Therein finding no specific levy for the intrastate sales, the Honourable Supreme Court set aside the levy on the assessee. 5. In Ellis Bridge Gymkhana (supra), the question was whether the Wealth Tax Act could be made applicable to Clubs. The charging section therein being Section 3, applied the levy in respect of the net wealth on every individual, Hindu Undivided Family and Company at the rates specified in the S....
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....here was no rate provided. There could be no levy imposed on a person having a number of such exempted buildings, taxable by mere aggregation and taking an average made applicable to each. This would lead to absurd results by which a small property being aggregated to one having huge rental value being liable to tax far in excess of its rental value. 7. Automobile & Agricultural Industries Corporation (supra) was a case in which the dealer who was licensed under the Bombay Sales Tax Act, 1953 was dealing in special goods and was also liable to collect and pay to the State, special tax as also general tax. The dealer collected the same from its customers and on a return being filed separately for the two taxes, the Assessing Officer forfe....
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....nd the so-called equitable construction of those words of the statute is not permissible.' The principle has been reiterated by the Constitution Bench in Vatika Township Private Limited (supra). 10. Based on the above precedents, we have to first look at the decision of this Court in Trivandrum Club (supra). Therein the Division Bench had specifically noticed the contention raised by the appellant that unless accommodation is provided in the building as part of business against collection of rent, the building cannot be called hotel. The Division Bench found that the definition of hotel under the Act has a wider meaning, especially noticing the Explanation covering even guest houses run by the Government or a Company or a Corporation....
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.... amount. The levy is also on the rate of charges of accommodation for residence and other amenities and services provided, excluding charges of food and liquor. The further contention raised by the petitioner is based on the specific reference to Clubs in Section 4, but its absence in sub-Sections (e) and (f) of Section 2. Section 4 being the charging section provides for a levy on the luxury provided in a hotel, house-boat, hall, auditorium or kalyanamandapam or place of like nature which is sufficient to levy tax on the clubs who rent out rooms for accommodation or lets its premises out and provides services and amenities therein. On an abundant caution the legislature included those attached to such places only to have more clarity regar....
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....on every member of a club, who has more than two facilities as specified in the Explanation to the sub-section. The power to levy such membership can be traced to Entry 62 of List-II of the Seventh Schedule to the Constitution, whereby any club having more than two facilities in the Explanation and its membership can be safely assumed to be a luxury. This does not mean that the luxury as provided in a club is taxed comprehensively by subsection (2A). In this context, we have to notice that the clubs when they rent out rooms within its premises or rent out kalyanamandapams, halls or auditoriums, it is not restricted to their members alone. Even from the members a rent is received, though at times a reduced rate and the other amenities and se....