State Of Kerala vs. M/S. M Far Hotels LTD.
Held
The High Court held that luxury tax under the Kerala Tax on Luxuries Act, 1976, was not attracted for services provided by independent third-party Ayurveda Centres and Beauty Parlours, even if the hotel had a revenue-sharing arrangement or collected payments. For the Convention Centre, the Court held that luxury tax was leviable only from 01.07.2006, following the amendment by the Kerala Finance Act, 2006, and not retrospectively for prior assessment years.
Facts
The State of Kerala challenged a Kerala Value Added Tax Appellate Tribunal order concerning luxury tax levied on M/s. M Far Hotels Ltd. The dispute involved charges received by the hotel from an Ayurveda Centre and a Beauty Parlour operating within its premises, and charges collected for the use of its Convention Centre, for assessment years 2003-04 to 2007-08.
Key Issues
Whether charges from an Ayurveda Centre and a Beauty Parlour operating within a hotel attract luxury tax if services are provided by independent entities; and whether charges for a Convention Centre were subject to luxury tax prior to the 2006 amendment to the Kerala Tax on Luxuries Act.
Sections Cited
Kerala Tax on Luxuries Act, 1976, Section 2(h), Section 4(2), Section 4(2A), Section 4(2)(c), Section 4(3), Section 4(4), Section 4(5), Kerala Finance Act, 2006
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Heard together (2 matters)
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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
OP (TAX) NO. 24 OF 2016 AGAINST THE ORDER/JUDGMENT DATED 04.08.2015 IN TA NO.124 OF 2010 OF S.T.A.T.ADDITIONAL BENCH, ERNAKULAM PETITIONER STATE OF KERALA REPRESENTED BY THE DEPUTY COMMISSIONER(LAW), COMMERCIAL TAXES, ERNAKULAM . BY SR. GOVERNMENT PLEADER-SRI.V.K.SHAMSUDHEEN RESPONDENT M/S. M FAR HOTELS LTD KUNDANNOOR, MARADU P.O., ERNAKULAM. BY ADVS. SRI.P.J.ANILKUMAR SRI.A.KUMAR SMT G.MINI1748 SRI.P.S.SREE PRASAD
THIS OP TAX HAVING COME UP FOR ADMISSION ON 04.06.2024, ALONG WITH OP (TAX).28/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
O.P(Tax) No.24 and 28 of 2016 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
OP (TAX) NO. 28 OF 2016 AGAINST THE ORDER/JUDGMENT DATED 04.08.2015 IN TA NO.13 OF 2013 OF S.T.A.T.ADDITIONAL BENCH, ERNAKULAM PETITIONER STATE OF KERALA REPRESENTED BY THE DEPUTY COMMISSIONER
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