M/S.KAIRALI AYURVEDIC HELATH RESORT PVT.LTD V. THE COMMERCIAL TAX OFFICER (LUXURY TAX)

WP(C)/18509/2013

AI Insights

The case involves M/s. Kairali Ayurvedic Health Resort Pvt. Ltd., which challenged the luxury tax assessment under the Kerala Tax on Luxuries Act, 1976. Initially, the petitioner argued that their services, being predominantly ayurvedic, should not be taxed as luxury services. The Tribunal and subsequent court decisions upheld the tax applicability, leading to the petitioner's appeal to the Supreme Court. The current writ petition challenges the Tribunal's rejection of a rectification application, which sought to exclude treatment expenses from the luxury tax assessment, arguing they should be considered amenities rather than taxable services.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 726982 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 10-06-2016
• Assessment Year: misc
• Other Referred Cases: OP(C) No.1928/2012, OP(C) No.4452/12, SLP No.12470/2013
• Laws Referred To: Kerala Tax on Luxuries Act, 1976
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: BOBBY JOHN
• Assessee Lawyers: T M SREEDHARAN; V P NARAYANAN; BOBY SEKHAR; DIVYA RAVINDRAN
• Keywords: Error Apparent on the Face of Record; Luxury tax; Rectification petition; Ayurvedic resort; Hospital services
• Section: 6(6)(a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE FRIDAY, THE 10TH DAY OF JUNE 2016/20TH JYAISHTA, 1938 WP(C).No. 18509 of 2013 (K) ---------------------------- PETITIONER : --------------------- M/S.KAIRALI AYURVEDIC HELATH RESORT PVT.LTD., OLASSERY P .O., KODUMBU, PALAKKAD DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR, SRI.K.V.RAMESH. BY SENIOR ADVOCATE SRI.T.M.SREEDHARAN BY ADVS.SRI.V.P. NARAYANAN SMT.BOBY M. SEKHAR SMT.DIVYA RAVINDRAN RESPONDENT(S) : ---------------------------- 1. THE COMMERCIAL TAX OFFICER (LUXURY TAX) DEPARTMENT OF COMMERCIAL TAXES, OFFICE OF THE DEPUTY COMMISSIONER, PALAKKAD - 678 001. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, KANNUR CAMP AT ERNAKULAM - 682 016. 3. THE KERALA AGRICULTURAL INCOME TAX AND SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, NEAR SARADHA SHANKARA KALYANA MANDAPAM, NURANI-P.O., PALAKKAD REPRESENTED BY ITS ASSISTANT SECRETARY - 678 002. R1 TO R3 BY GOVT. PLEADER SRI. BOBBY JOHN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10-06-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 18509 of 2013 (K) ---------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS : ------------------------------------------ EXHIBIT P1: TRUE COPY OF CERTIFICATE OF REGISTRATION DATED 16.3.2009 ISSUED BY THE COMMERCIAL TAX OFFICER (LUXURY TAX), PALAKKAD - 678 001. EXHIBIT P2: TRUE COPY OF THE COMMON ASSESSMENT ORDER DATED 3.6.2009 COVERING THE PERIOD 2003-04 TO 2007-08 PASSED BY THE FIRST RESPONDENT. EXHIBIT P3: TRUE COPY OF THE COMMON ORDER DATED 4.11.2010 IN KVAT A NOS.1707, 1708 AND 1709/2009 AND STA NOS. 177 & 178/2009 PASSED BY THE SECOND RESPONDENT. EXHIBIT P4: TRUE COPY OF COMMON ORDER OF THE APPELLATE TRIBUNAL DATED 29.2.2012 IN TA NOS.9 TO 18/2011. EXHIBIT P5: TRUE COPY OF COMMON ORDER DATED 18.10.2012 IN TA NOS.9 TO 18/2011 OF THE APPELLATE TRIBUNAL. EXHIBIT P6: TRUE COPY OF ORDER DATED 30.11.2012 PASSED BY THE FIRST RESPONDENT. EXHIBIT P7: TRUE COPY OF RECTIFICATION APPLICATION DATED 7.12.2012 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT FOR THE ASST. YEAR 2003-04. EXHIBIT P7(a): TRUE COPY OF -DO- FOR THE ASST. YEAR 2004-05. EXHIBIT P7(b): TRUE COPY OF -DO- FOR THE ASST. YEAR 2005-06. EXHIBIT P7(c): TRUE COPY OF -DO- FOR THE ASST. YEAR 2006-07. EXHIBIT P7(d): TRUE COPY OF -DO- FOR THE ASST. YEAR 2007-08. EXHIBIT P8: TRUE COPY OF COMMON ORDER DATED 20.3.2013 IN RECTIFICATION PETITIONS 8 TO 12/2012 IN TA NOS. 8 TO 13/2011 PASSED BY THE 3RD RESPONDENT. RESPONDENT(S)' EXHIBITS : NIL ---------------------------------------------------- //TRUE COPY// P.S. TO JUDGE Mn A.M. SHAFFIQUE, J. ============= W.P. (C) No. 18509 of 2013 =================== Dated this, the 10th day of June, 2016 J U D G M E N T Petitioner challenges Ext.P8 order by which the Appellate Tribunal rejected the rectification petition filed by the petitioner in TA Nos.9 to 13/2011. 2. The facts as disclosed in the writ petition would indicate that the petitioner was assessed to luxury tax under the Kerala Tax on Luxuries Act, 1976 (hereinafter referred to as the 1976 Act). Initially, the petitioner took up a contention that it is not a hospital and does not provide any service whereas it is predominantly an ayurvedic resort which provides treatment to the customers/patients and therefore, it is not exigible to tax under the 1976 Act. This relates to the period from 2003-04 to 2007-08. With effect from 01/4/2008, luxury tax has been made applicable to the services rendered in hospitals as well. 3. Petitioner challenged the proposals before the statutory authorities. Though initially the Appellate Tribunal had formed an opinion that the petitioner's institution is an ayurvedic W.P(C) No.18509/13 -:2:- hospital and is not liable to pay luxury tax, the matter was taken up before this Court by the Department and by virtue of a judgment of this Court in OP(C) No.1928/2012, the orders were set aside. The matter was remitted back to the Tribunal for fresh consideration. After remand, the Tribunal upheld the view taken by the department and formed an opinion that the service rendered in the petitioner's organization is also liable to pay luxury tax. Though the petitioner challenged the same before this Court, this Court confirmed the view taken by the Tribunal as per OP(C) No.4452/12. However, the petitioner has filed Special Leave Petition before the Supreme Court against the aforesaid judgment and the same is pending consideration as SLP No.12470/2013. 4. Petitioner in the meantime approached the Tribunal for rectification of the Tribunal's order inter alia contending that there is error apparent on the face of record as treatment expenses were also included in the assessment proceedings prepared by the assessing officer. The Tribunal rejected the claim on the ground that there is no error apparent on the face of record. It is challenging the aforesaid order that this writ petition is filed. W.P(C) No.18509/13 -:3:- 5. Learned counsel for the petitioner submits that when hospitals are not liable to pay luxury tax and the treatment expenditure was excluded from such payment, a similar view ought to have been taken by the assessing authority and the treatment expenses ought to have been considered as amenities and should not have been charged with luxury tax. 6. The application is filed for rectification under Section 6 (6)(a) of the Act, which reads as under; “6.(6)(a) An assessing authority or an appellate or revising authority may on application or otherwise at any time within three years from the date of any order passed by it, rectify any error apparent on the face of records: Provided that no such rectification which has the effect of enhancing an assessment or any penalty shall be made unless such authority has given notice to the person affected thereby and has allowed him a reasonable opportunity of being heard.” 7. Counter affidavit has been filed by the 1st respondent supporting the stand taken by them. On a perusal of the materials placed on record and after hearing the learned counsel for the petitioner as well as the learned Government Pleader appearing W.P(C) No.18509/13 -:4:- on behalf of the respondents, I do not think that this case calls for interference at this stage of the proceedings. The issue involved before the Tribunal was whether any rectification was required to be made to the order already passed and confirmed by this Court which matter is pending before the Apex Court. Though it is contended that rectification was sought only for a limited purpose, I do not think that such an application was maintainable when the issue was pending before the Apex Court and especially when the Tribunal's order was under challenge. Petitioner may get some relief only if the matter pending before the Supreme Court is decided in favour of the petitioner. Under such circumstances, petitioner is not entitled for any relief. Writ petition is dismissed. However, it is made clear that right of the petitioner will be subject to further orders to be passed by the Apex Court in SLP No.12470/2013. Sd/- A.M. SHAFFIQUE, JUDGE Rp10/06/2016 //True Copy// P.S to Judge "