2021 (3) TMI 592

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....x Appellate Tribunal, Additional Bench, Kozhikode in the instant petitions. 3. The issue arises under the Kerala Tax on Luxuries Act, 1976 (for short 'the Luxuries Act'). The respondent is an Ayurvedic treatment centre attached to M/s. Poomully Aram O.P.(Tax) Nos.1,2 & 3/2021 Thampuran Smaraka Trust, Peringode, Palakkad. The respondent provides ayurvedic therapy and treatment to individuals admitted at the said centre. On 07.01.2014 the Intelligence Officer, Squad No.VI, Commercial Taxes, Palakkad inspected the premises and verified the books of account of the respondent. The three petitions concern the penalty levied on the respondent for the years 2012-13, 2013-14, and 2014-15. In other words, the penalty proceedings are initiate....

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....m the date of inspection, material brought on record, the conclusions recorded by the primary and first appellate authority are considered in detail by the Tribunal. For brevity, we are not proposing to refer to the circumstances in the common order, particularly having regard to the fact that the levy of penalty is interdicted by the Tribunal, as penalty is ordinarily levied on an assessee for contumacious conduct or for a deliberate violation of the provisions of the particular Statute. [See Pratibha Processors v. Union of India - AIR 1997 SC 138]. 6. Section 17A of Luxuries Act reads as follows: "17A. Imposition of penalties by assessing authority- if an assessing authority is satisfied that any person- (a) liable to pay tax under t....

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.... per room exceeds Rs. 1000/-. In the case on hand, the assertion of respondent is that the respondent is charging Rs. 650/- and Rs. 350/- respectively for A/C and non A/C rooms. The collection of rent at the said rates, it is not the case of the Department as well, would come within the purview of the Luxuries Act. The primary authority and the first appellate authority have broadly assumed or inferred what could be the therapy or treatment expenses and fees paid to the Ayurveda Doctors at the centre. Thereafter, on a notional basis, determined the tax payable by the respondent and demanding the penalty thereon. The respondent before the Tribunal relied on the judgment of this Court in U.K. Monu Timbers (M/s.) v. State of Kerala 2012 (3) KH....

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.... others. Absolutely no other luxury has been provided in the hospital. Though the appellant has shown the doctors consultation charges, food and medicine charges separately, the remaining receipts towards the treatment charges are shown as one head as Ayuvedic Treatment charges. Though the enquiry authority says that the appellant is providing telephone facility, internet facility and other luxury in the room, absolutely there is no materials available to show the same. It is true that the appellant has not furnished the item wise details regarding the Ayurvedic treatment charges received by it. As modified in 1 st appeal, 30% of the ayurvedic treatment charges is taken as receipts towards luxury, but no basis is there for taking 30% even....

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....the Kerala AIT/ST Appellate Tribunal, Addl. Bench, Palakkad, dated 13.02.2015 was passed in the assessment proceedings. Hence, said decision cannot be applied in the case in hand. Reckoning the above aspects, we are of the considered view that available materials are insufficient to impose penalty on the appellant u/s.17A of the KTL Act. It is made clear that the assessing authority concerned is at liberty to initiate assessment proceedings in accordance with law, subject to the period of limitation, if there are sufficient materials for doing so. Therefore, we are inclined to interfere in the impugned orders of penalty passed by the authorities below. Thus, these appeals are to be allowed. Point answered accordingly." 9. From the conclusi....