Preet Hotel Pvt. Ltd. V. Assessing Authority-cum-Luxury Tax Officer & others

CWP/1233/2005

AI Insights

M/s Preet Hotel Pvt. Ltd. filed a writ petition challenging the imposition of luxury tax on five rooms leased to the Oriental Bank Employees Union under an annual lease agreement. The petitioner argued that these rooms should not be considered part of the hotel for tax purposes, as they were leased out on an annual basis and not on a per person, per day basis as required by the H.P. Tax on Luxuries Act. The respondents, including the Assessing Authority and the Excise and Taxation Commissioner, contended that the rooms were part of the hotel and provided with all necessary amenities, thus attracting luxury tax. The court examined the terms of the lease agreement and the provisions of the Act, ultimately deciding in favor of the respondents.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 692808 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 26-07-2013
• Assessment Year: misc
• Other Referred Cases: H.P.Tourism Development Corporation Versus Union of India and others
• Laws Referred To: Constitution of India, H.P. Tax on Luxuries (In Hotels and Lodging Houses, Act 1979, Himachal Pradesh Registration of Tourist Trade Act, 1988
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SHARWAN DOGRA; ANUP RATTAN; ROMESH VERMA; J K VERMA; PARUL NEGI
• Assessee Lawyers: M M KHANNA; VAYUR GAUTAM; GOVERDHAN SHARMA
• Keywords: Assessment Order; Lease agreement; Luxury tax; Tax liability; Hotel Definition
• Section: 6(6); 4(1); 2(e); 226; 2(d); 227; 7-B; 6.5%

Judgement Text

"IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. C.W.P. No. 1233 of 2005 Reserved on: 29th May, 2013. Date of Decision: 26.7.2013 M/s Preet Hotel Pvt. Ltd. ….. Petitioner Versus Assessing Authority-cum-Luxury Tax Officer & others …Respondents Coram The Hon’ble Mr. Justice A.M. Khanwilkar, Chief Justice. The Hon’ble Mr. Justice R.B. Misra, Judge. Whether approved for reporting?1Yes. For the Petitioner : Mr.M.M. Khanna, Senior Advocate with Mr.Vayur Gautam and Goverdhan Sharma, Advocates. For the Respondents : Mr.Sharwan Dogra, Advocate General with Mr.Anup Rattan, Mr.Romesh Verma, Additional Advocate Generals and Mr.J.K. Verma and Parul Negi, Deputy Advocate Generals. Justice R.B. Misra, Judge The present writ petition has been preferred by the petitioner under Article 226 read with Article 227 of the Constitution of India for issuance of appropriate writ, direction or order as made below:- (a) That the five rooms let out by the petitioner against the annual lease agreement be declared as not part of the hotel so as to attract the provisions of “The Act” in question and the petitioner has no liability to pay the tax thereunder; And consequently quash the order passed vide annexure P-3 to P-7. Whether the reporters of the local papers maybe allowed to see the judgment? 2 (b) That the rooms let out on annual lease rent agreement be declared as falling beyond the definition of “hotel” and “luxuries provided in the hotel” so as to fall within the ambit of Section 4, the charging section for the levy of tax under “The Act” in the absence of any charge being made on day to day basis as prescribed under the Act. And consequently quash the order passed vide annexure P-3 to P-7. (c) That the Agreement of five rooms in question between the petitioner and the Oriental Bank Employees Union do not come within the definition of hotel so as to attract the provisions of the Act for the levy of tax more over ‘Per Person, Per Day’ ingredient of payment is making in this case and Luxury Tax Act cannot tax lease agreement. (d) That since there is a single occupant, that is the tenant of lease, whether the provisions of the Act could be stretched to engulf such an accommodation which is not let out on day to day basis and to a single tenant to levy and charge tax thereon. (e) To issue a writ of mandamus to the respondents not to charge Luxury Tax under the provision of the Act which has been so let out on annual basis and has only single occupancy through out and as the accommodation not run as a Hotel.” 2. The Assessing Authority, Kullu has passed assessment orders on 28.5.2003 for the years 1995-96, 1996-97 and 1997-98 (Annesures P-3, P-4 and P-5), under challenge. Being aggrieved, the petitioner preferred appeal No. LT-M-50-51 and 52 before the Appellate Authority-cum-Dy. Excise & Taxation Commissioner, Mandi, H.P., which was dismissed vide order dated 16.12.204 (Annexure P-6). Being aggrieved, the petitioner preferred revision/appeal No. 44/205 before the learned Excise and Taxation Commissioner, Himachal Pradesh, which too was dismissed on 13.10.2005 (Annexure P-5). All these orders are under challenged in the present writ petition. 3 3. Brief facts necessary for adjudication of the present writ petition are that the petitioner is a Company incorporated under the Companies Act, 1956 and is running a hotel in the name and style of M/s Preet Hotel Pvt. Ltd. Manali. The Company is also registered with the Department of Tourism, Himachal Pradesh under Sections 16/17 of the Himachal Pradesh Registration of Tourist Trade Act, 1988. The petitioner entered into an agreement with M/s Oriental Bank Employees Union (Association/Union) on 13.3.1995 (Annexure P-2) for letting out room Nos. 115, 116A, 116B, 117 and 118 at an agreed amount of lease of `3,00,000/- per annum and authorized the licensee to use part of the hotel as guest house for their employees, on certain terms and conditions. The Assessing Authority, Kullu on 13.8.1998 issued notice to the petitioner under H.P. Tax on Luxuries (In Hotels and Lodging Houses, Act 1979 in short called ‘Act’) for framing assessment for three years 1995-96, 1996-97 and 1997-98 and after hearing the representative of the petitioner and scrutiny of documents, passed the assessment orders imposing luxury tax further holding that the petitioner is engaged in evasion of luxury tax and is bifurcating the room rent into other income of the hotel just to avoid the luxury tax. 4. The petitioner has given rooms of his hotel for the purpose of holiday home on annual rent of ` 3,00,000/-, but has not paid luxury tax, accordingly, the Assessing Authority in 4 addition proceeded for imposition of penalty under Sections 6(5) & 6(6), besides levying interest under Section 7-B of the ‘Act’. 5. Being aggrieved, the petitioner preferred the appeal before the Appellate Authority cum Deputy Excise and Taxation Commissioner, Mandi, who vide its order dated 16.12.2004 has observed that the accommodation in question is very much covered under the definition of hotel as contained in the ‘Act’ as the hotel owner who has been termed as licensor in the agreement provided lodging in this part of the premises with all facilities as ordinarily exists in a hotel like beds, bed rolls, sheets, intercom, TV, carpets, bathrooms etc. It was also observed that the hotel owner de- facto managed the affairs of these five rooms and provided luxury to the persons sponsored by the association/union for staying in these rooms, therefore, the petitioner/owner is liable to pay luxury tax qua the above accommodation. The hotel owner/petitioner was required to keep these rooms all the time only for the exclusive use of the association/union throughout the year, as such, the accommodation remained in the deemed occupancy of the association/union, therefore, the entire consideration amount of `3,00,000/- is taxable under the ‘Act’. The Revisional Authority vide order dated 13.10.2005 has also rejected the revision affirming the views of Appellate Authority as well as the Assessing orders. 5 6. The following arguments have been advanced on behalf of the petitioner. (a) All five rooms were not registered with the Tourism Department as rooms of the Hotel. (b) As agreed by the petitioner and the association/union, five rooms in question do not come within definition of hotel under Section 2(d) of the ‘Act’, therefore, per person per day ingredient of payment is missing and as such the amount of `3,00,000/- cannot be taxed under the ‘Act’. (c) The association/union who is tenant therein the accommodation leased out by the petitioner and if guests come, they come on behalf of the association/union and if any amount is charged, it is charged by the union, as such, the amount is not taxable. (d) The respondents were not justified in treating the five rooms accommodation of the hotel as guest house in the hands of the petitioner, as the same was leased out to the association/union holding exclusive enjoyment and possession. The guests were booked by the association/union and any receipt on that account formed a part and parcel of the receipts in the hand of the union/association and the petitioner has only received the lease money as property income in its hand and thus the orders of the assessing authority are illegal. (e) The income on account of lease of property is income from property and that can not be taxed under the 6 ‘Act’, as such, the orders of respondents for all above three years are illegal. 7. On the other hand, following submissions have been made on behalf of the respondents. (a) The petitioner had let out the premises of the hotel as holiday home on yearly basis for a sum of `3, 00,000/- which was inclusive of all taxes beside house tax and the petitioner provided all facilities to the license as was provided in the other part or area of the hotel. The plea of the petitioner that he did not have the right which he generally has in the case of rest of the hotel and the right of admission thereto in the rest of the hotel is not tenable as the petitioner has provide attendant for room service to the guest and managed holiday home as per agreement. (b) Five rooms were earlier registered with the Tourism Department and the same were deleted from the registration certificate of Tourism w.e.f. 16.5.1995 and were intentionally let out to association/union on yearly rental basis just to evade luxury tax. (c) Each and every occupant of the rented premises alleged to have been leased out to the Bank association/union is counted that is why the charges for extra beds have been received. 8. In facts and circumstances, the main issue to be adjudicated in the present case is as to whether the charges 7 received by the petitioner as “guest house hire charges” on annual basis from the association/union could be assessed to tax under the Act? 9. In order to deal with the present issue in question, it is necessary to peruse the terms and conditions of the agreement, which are below:- “Condition No. 4:- That the licensor shall provide all necessary formalities like intercoms, electricity, water, latrine, bathroom etc. at his own cost and the charges in respect of water and electricity consumed at the licensed premises shall be borne by licensor as per the bill of authorities. Condition No. 11:- That the licensor undertake to supply/provide the facilities detailed below at the licensed premises without charging any amount. (a) Double bed with mattress, pillows with standard cover and extra bed (one set) for each room. (b) Fixed dressing table with stool. (c) Writing table and chair. (d) Hot & cold water supply system. (e) Fan & tubes, curtains and foot mattresses/carpets. Condition No. 12:- That the licensor shall provide above facilities regularly during the continuance of license and the premises including the room etc. shall be kept neat and clean by the caretaker of Holiday Home made available by the licensor at its own expenses. Condition No. 13:-That the licensor has agreed to regularly provide tea, coffee, cold drinks and breakfast etc. to the visitor with 20% discount on rates obtaining in the hotel. Condition No. 14:-That the licensor also undertakes to provide the attendant for room service to the guests and to manage the affairs of holiday home.” 10. It is also necessary to refer some relevant provisions of the ‘Act’, as below:- Section 2(d) of the ‘Act’ defines ‘Hotel’ as under:- 8 From 1979 to 19.04.1991 “(d) “hotel” means a building or a part of a building where residential accommodation is by way of business provided for a monetary consideration and it includes a lodging house; From 20.4.1991 to 30.6.1992 “(d) “hotel” means building or a part of building where residential accommodation by way of business is provided for a monetary consideration and includes a lodging house but shall exclude a dharamshala or any other similar establishment run by a Public Charitable Trust which provides accommodation with or without meals and the net income from which is utilized exclusively for charitable purposes; From 01.07.1992 onwards i.e. “(d) “hotel” means any premises or part of premises including a house-boat, restaurant, bar or a tent where lodging with or without board or any kind of eatables or beverages or other services are by way of business provided for a monetary consideration, and includes such premises as are given on rent during any period of a financial year; Section 2(e) of ‘Act’defines ‘Luxury’ as below:- From 1979 to 19.04.1991 “(e) “Luxury Provided in hotel” means accommodation for residence provided in hotel, rate of charges for which (including air- conditioning, telephone, television, radio, music or extra beds and the like, but excluding charges for food, drink and for other amenities) is * fifty rupees per person per day or more.” *The word “fifty” substituted w.e.f. 20.04.1991 for the word “twenty – five” vide Act No.9 of 1991 published in R.H.P. (Extra ordinary) on 20.04.1991. But vide Act No.8 of 1992 published in R.H.P. (Extra ordinary) on 27.04.1992 the word “fifty” omitted w.e.f. 01.07.1992. Subsequently with the promulgation of Ordinance No.7 of 1992 and 16 of 1993 by India respectively replaced by President’s Act No.7 of 1993 re-published in H.P. Rajpatra (extra ordinary) on 03,.04.1993, the word “twenty five” added w.e.f. 01.07.1992 9 From 20.04.1991 to 30.06.1992 “(e) luxury provided in a hotel” means accommodation for residence provided in a hotel including charges for air-conditioning, telephone, television, radio, music, sports, extra beds and other amenities, provided in a hotel;” From 01.07.1992 onwards for relevant periods “(e) luxury provided in a hotel” means accommodation for residence provided in a hotel, rate of charges for which (including charges for air-conditioning, telephone, television, radio, music, sports, extra beds and other amenities provided in a hotel) is [fifty] rupees per person per day or more:] [Explanation:- For the purpose of clause(e) wherever accommodation provided is under timeshare agreement or under a package deal agreement or under any such other system wherein only maintenance charges, by whatever name called, are collected periodically’ over and above any lump-sum payment made, the charges for luxury provided shall be determined as under, namely:- (a) Where a hotel is having any of the following facilities, Rs.500/- per person per day for the accommodation facility actually availed:- (i) Swimming pool, (ii) health club, (iii) tennis court, (iv) golf course, (v) shopping arcade; and (b) In all other cases, the charges for luxury shall be worked out at the rate of Rs.30/- per person per day for the accommodation facility actually availed.]; Section 4 of ‘Act’ defines ‘Levy and collection of tax’, as below:- “(1) Subject to the provisions of this ‘Act’, there shall be levied and paid a tax in respect of any luxury provided in a hotel (hereinafter called the “luxury tax”) on the amount of charges payable on luxury [turnover of receipts of] the luxury. [Provided that where the charges for luxury provided in a hotel are payable otherwise than on daily basis, then the turnover of receipts for the total period of occupation of accommodation shall be computed proportionately for a day and luxury tax paid accordingly.] 10 (2) The luxury tax under, sub-section (1) shall be payable by the proprietor at the rates not exceeding ten paise in a rupee as the Government may, by notification, direct. (3) Notwithstanding anything contained in sub-sections (1) and (2), no tax shall be levied, charged and paid in respect of residential accommodation provided to his employees by the proprietor of the hotel.] (4) Notwithstanding anything contained in sub-sections (1), (2) and (3), the luxury tax may be assessed and recovered from the proprietor, at lump sum, in the manner prescribed, after taking into consideration, the capacity of a hotel, the rates and the charges fixed for such luxury by the prescribed authority under the Himachal Pradesh Registration of Tourist Trade Act, 1988 (9 of 1988), [Such period of financial year as may be specified by notification issued under this sub-section] and the rate of luxury tax as may be notified by the Government under sub-section (5): [Provided that the period of a financial year to be notified under this sub-section shall not be less than fifty per cent of the number of days in that financial year.]; (5) The Government may, for the purposes of sub-section (4), notify a rate of luxury tax different from the rate notified under sub-section (2) and assess and recover the luxury tax on the entire luxury available in a hotel, subject to the conditions that the rate shall not exceed the ceiling of ten paise in a rupee specified in sub-section (2). (5A) During the period commencing from the 1st day of July, 1992 and ending on the day the notification revising the rate of luxury tax under sub-section (5) is published in the Official Gazette issued after the promulgation of the Himachal Pradesh Tax on Luxuries (in Hotels and Lodging Houses) Amendment Ordinance, 1992 (H.P. Ordinance 7 of 1992) the luxury tax for the purposes of sub-section (4) shall be and shall always be deemed to have been levied at the rate of ten paise in a rupee.]; and (6) The luxury tax under 1[sub-section (2)] may be collected by the proprietor from the persons to whom the luxury is provided in a hotel: Provided that the liability to pay tax shall not be affected where any proprietor does not collect the luxury tax payable by him. (7) In computing luxury tax under this section, a fraction of a rupee which is less than fifty paise shall be ignored and a fraction which is more than fifty paise shall be rounded off to the next higher rupee. 11 11. Section 3 of the ‘Act’ defines taxing authorities. Section 5-A deals with registration of proprietor, Section 6 deals with payment of tax and submission of returns and Section 7 deals with assessment of luxury tax. For further reference Section 6 of the ‘Act’ is extracted below:- “6[Payment of tax and submission of returns.- (1) Every proprietor, liable to pay luxury tax under this Act shall deposit the full amount of luxury tax due and payable by him, in respect of each month within [thirty] days after the close of the month to which the luxury tax relates into a Government treasury or the State Bank of India, and shall furnish to the assessing authority of the district concerned a proof of having paid the tax due in the prescribed manner. (2) Every proprietor shall furnish a return in the prescribed form to the assessing authority of the district concerned quarterly within [7 days after the expiry of the period specified in sub-section (1) for making payment of luxury tax] along with the receipts of payment of luxury tax for each month of the quarter to which the return relates. (3) Every such return shall show the number of rooms or other accommodation in the hotel which is intended to be occupied, the number of persons who occupied such rooms or accommodation, the periods of their stay, the amount of charges recovered from them, together with such other information as may be prescribed. (4) Every return shall be verified in the prescribed manner. (5) If a proprietor fails without sufficient cause to comply with the requirements of provisions of sub-sections (1), (2) and (3) the assessing authority of the district concerned may, after giving such proprietor a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one and a half times of the amount of luxury tax due and payable by him under this Act. (6) If a proprietor has maintained false or incorrect accounts with a view to suppressing any transaction pertaining to his business or has concealed any particulars of his business or has furnished to, or produced before, any assessing authority under this Act or the rules made thereunder any account, return or information which is false or incorrect in any material particular, the Commissioner or any other 12 person appointed to assist him under sub-section (1) of section 3 of this Act may, after affording such proprietor a reasonable opportunity of being heard, direct him to pay by way of penalty in addition to the luxury tax to which he is assessed or is liable to be assessed, an amount which shall not be less than twenty-five percentum but which shall not exceed one and a half times of the amount of luxury tax to which he is assessed or is liable to be assessed:] 12. From the above provisions, it appears that if the premises is covered under definition of the hotel under the ‘Act’ and luxury is provided in that hotel as defined above, the charges received by the owner of the hotel are taxable according to Section 4(1) of the ‘Act’. In the present case, the petitioner rented out five rooms numbering 115, 116A, 116B, 117 and 118 to the association/union at the yearly rent of `3,00,000/- as per agreement dated 30.3.1995 and the owner has been termed in this agreement as “the licensor” and the association/union has been termed as “the licensee”. 13. On analysis of the above agreement, it appears that the real intention of the parties was to transfer the possession of the rooms by the licensor to the licensee but only to keep these rooms earmarked for the exclusive use of the persons sent by the licensee (association/union) from time to time to the hotel for which yearly consideration of `3,00,000/- was fixed. We also take note of the fact that the main clause of the agreement above mentioned indicates that “the association/union has taken the five rooms numbering 115, 116A, 116B, 117 and 118 for 13 use as its holiday home on the terms and conditions contained hereinafter”. In our considered view, the obligations cast on the licensor /(petitioner/ hotel) is to allow the use of a part of the hotel to the licensee as guest house for its members/guests. In consideration of the rent the licensor hereby “demises” to the licensee the above said five rooms including all electrical and sanitary fittings together with all rights and easements connected therewith at a yearly rent of `3,00,000/-. Nothing has been mentioned in the agreement that the possession of above mentioned rooms in question was actually handed over to the licensee /(association/union). The word “demise” has been referred in this clause which does not reveal the true relationship between the two parties concerned. Condition Nos. 4, 5, 11, 12, 13, 14 and 15 may give some light in respect of the relationship between the parties. Conditions reveal that the accommodation of the five rooms in question was in possession of the owner of the hotel/petitioner and the association/union only possessed the deemed occupancy of these rooms for whole of the year for annual rent of `3,00,000/-. As per condition No. 14 “that the accommodations in the holiday home shall be booked/allotted by the licensee association/union and the hotel shall act according to the instructions issued by the licensee/association/union”. Condition No. 15 provides, “that the licensor also undertakes to provide the attendant for room services to the guests and to 14 manage the affairs of holiday home”. Condition No. 12 inter- alia also provides that “….the rooms etc. Shall be kept neat and clean by the caretaker of the holiday home made available by the licensor at its own expenses”. Condition No. 5 again inter- alia states that “…the licensor shall not use or allow to be used the licensed premises by any person or for any purpose other than permitted by the licensee association/union even if the premises is vacant”. Accordingly, the licensor all the time possessed the rooms in question to provide these rooms to the persons who were to be sent by the association/union from time to time to stay in the hotel in question. 14. Condition No. 11 provides “that the licensor undertakes to supply/provide the facilities detailed below at the licensed premises, without charging any amount:- a) Double bed with mattresses, pillows with standard cover and extra beds (one set) for each room against Rs.50/- per extra bed. b) Fixed dressing table with stool. c) Writing table and chair. d) Hot and cold water supply system. e) Light and tubes, curtains and foot mattresses and carpets. f) One TV” The condition No. 12 further provides “that the licensor shall provide above facilities regularly during the continuance of the license…” Further condition No. 4 stipulates “that the licensor shall provide all necessary formalities like intercom, electricity, 15 water, latrine, bathroom etc. at his own cost and the charges in respect of water and electricity consumed at the licensed premises shall be born by the licensor as per the wills of the authorities.” According to condition No. 13, it was the duty of the licensor to regularly provide tea, coffee, cold drinks and breakfast etc. to the visitors with 20% discount on rates fixed in the hotel. 15. Analysis of the above conditions reveal that the accommodation in question is very much covered under the definition of hotel as contained in the ‘Act’, because the hotel owner, who has been termed as licensor in the agreement, provided lodging in this part of the premises with all facilities as ordinarily exists in a hotel like beds, bed rooms, sheets, intercom, TV, carpets, bath rooms and the like. Even the expenses for consumable like water and electricity were to be paid by him only. The facilities provided by the hotel owner clearly fall within the ambit of the definition of “luxury provided in a Hotel” as defined under the ‘Act’ ibid which means residential facility provided in a hotel, rate of charges for which exceed, the minimum limit of `25/- per day per person (as it existed then). It was the hotel owner, de-facto who managed the affairs of these five rooms and provided luxury to the persons who were sent by the association/union for staying in these rooms. The general public and bank employees had free access to the hotel and all luxury facilities were available to them. Therefore, 16 we find that the hotel owner is liable to pay luxury tax qua this accommodation also. Since the hotel owner was required to keep these rooms earmarked all the time only for the exclusive use of the association/union throughout the year, the accommodation in question remained in the deemed occupancy of the association/union and the entire consideration of `3,00,000/- is taxable under the ‘Act’. According to condition No. 3 of the agreement, the renewal was possible upto three years by mutual consent of both the parties. During all the three years under appeal, the hotel owner has received `3,00,000/- per annum on account of guest house charges which are depicted in the profit and loss accounts produced before the assessing authority. It implies that the agreement was renewed for 1996-97 and 1997-98 as well as on the same terms and conditions. 16. Learned counsel for the petitioner has referred and relied upon the decision of the Division Bench of this Court in H.P.Tourism Development Corporation Versus Union of India and others, Vol.238 (1999) Income Tax Reports 39, according to which Sections 3, 4 and 5 of Expenditure Tax Act applies to expenditure incurred by persons who occupy rooms, charges for which exceed prescribed minimum room charges cannot be divided amount on the number of persons who occupied it. In our considered view, in the present case, issue for adjudication is quite different and the facts of the present case 17 are different from the above referred case, as such, above case is not helpful to the petitioner. 17. According to the petitioner, there is no tax liability in law if there is ambiguity in the provision as to any of the three components of tax law, namely, subject of tax; person who is liable to pay tax; and rate at which tax is to be paid. In a taxing statute it is not possible to assume any intention or governing purpose beyond what is stated in plain language. In our considered view, learned counsel for the petitioner could not decipher or point out as to why the language of the ‘Act’ in question in the present case is ambiguous and what ambiguity is prevailing in the provisions as to not attract imposition of luxury tax on the petitioner. 18. It is settled legal principle of interpretation of Statute that no word is redundant and every word in a statutory provision is to be given an effective meaning after determining the intent of the Legislature. In Shyam Kishori Devi Vs.Patna Municipal Corporation & Another, AIR 1966 SC 1678, the Supreme Court held as under:- “It is well known rule of construction that a Court must construe a section, unless it is impossible to do so, to make it workable rather than to make it unworkable. In the words of Lord Bramwell, the words of a statute never should in interpretation be added to or subtracted from, without almost a necessity.” (Emphasis added) No word can be rendered ineffective or purposeless. Courts are required to carry out the legislative intent fully and completely. While construing a provision, full effect is to be given to the language 18 used therein, giving reference to the context and other provisions of the Statute. By construction, a provision should not be reduced as a “dead letter” or “useless lumber”. An interpretation which renders a provision an exercise in futility, should be avoided, otherwise it would mean that enacting such a provision in legislation was “ an exercise in futility” and the product came as a “ purposeless piece” of legislation. The entire exercise to enact such a provision was “most unwarranted besides being uncharitable.” (Vide Sri Ram Ram Narain Medhi Vs. State of Bombay, AIR 1959 SC 459; R.G.Jacob Vs. Republic of India, AIR 1963 SC 550; Patel Chunibhai Dajibha Vs. Narayanrao Khanderao Jambekar & Anr., AIR 1965 SC 1457; Anandji Haridas & Co. Pvt. Ltd. Vs. Engineering Mazdoor Sangh & Anr., AIR 1975 SC 946; Commissioner of Sales Tax, U.P. Vs. M/s. Madanlal Dan & Sons, Bareilly, AIR 1977 SC 523; M/s. Annapurna Biscuit Manufacturing Co., Kanpur Vs. Commissioner of Sales Tax, U.P. Lucknow, AIR 1981 SC 1656; Vazir Sultan Tobacco Co. Ltd. Vs. Commissioner of Income-tax, Andhra Pradesh, Hyderabad, AIR 1981 SC 2105; M.V. Elisabeth & Ors. Vs. Harwan Investment & Trading Pvt. Ltd., Hanoekar House, Swatontapeth, Vasco-De-Gama, Goa, AIR 1993SC 1014; Institute of Chartered Accountants of India Vs. Price Waterhouse & Anr., (1997) 6 SCC 312; Sultana Begum Vs. Prem Chand Jain, AIR 1997 SC 1006; State of Bihar & Ors. Vs. Bihar Distillery Ltd. & Ors., AIR 1997 SC 1511; South Central Railway Employees Co-operative Credit Society Employees’ Union, Secunderabad Vs. Registrar of Co-operative Societies & Ors., (1998) 2 SCC 580; Subash Chander Sharma & Anr. Vs. State of Punjab & Ors., AIR 1999 SC 2076; Bharathidasan University & Anr. Vs. All India Council for Technical Education & Ors., AIR 2001 SC 2861; and Mor Modern Co-operative Transport Society Ltd. Vs. Financial Commissioner & Secretary to Govt., Haryana & Anr., AIR 2002 SC 2513). The language of the ‘Act’ is very clear and it does not require any interpretation because there is no ambiguity in it. In case the language of a Statute is unambiguous, there can be no need to interpret it or examine the intent or object of the Act and the Courts must give effect to it unless it leads to an absurdity or injustice. It is a well recognised canon of interpretation that a provision curbing the jurisdiction of the Court or Authority must normally receive strict interpretation unless the statute or the context requires otherwise. (Vide Abdul Waheed Khan Vs. Bhawani, AIR 1966 SC 1718; Sachida 19 Nand Singh Vs. State of Bihar, (1998) 2 SCC 493; Jagdish CH. Patnaik Vs. State of Orissa, (1998) 4 SCC 456; and Arul Nadar Vs. Authorised Officer, Land Reforms, (1998) 7 SCC 157). (i) If the words used or ambiguous and reasonably open to two interpretations benefit of interpretation is given to the subject. (Vide : Express Mill Vs. Municipal Committee, Wardha, AIR 1958 SC 341, p. 344; CIT Vs. Karamchand Premchand Ltd., AIR 1960 SC 1175, p. 1182; Board of Revenue, U.P. Vs. Sidhnath Mehrotra, AIR 1965 SC 1092, p. 1095; C.A. Abraham Vs. ITO, Kottayam, AIR 1961 SC 609, p. 612; J.K. Steel Vs. Union of India, AIR 1970 SC 1173, p. 1182; Collector, E.D. Vs. R. Kanakasabai, AIR 1973 SC 1214, p. 1218; CIT Vs. N.H. Tea Co., AIR 1973 SC 2524, p. 2526; Diwan Brothers Vs. Central Bank, Bombay, AIR 1976 SC 1503, p. 1508, Petron Engineering Construction Pvt. Ltd. Vs. Central Board of Direct Taxes, AIR 1989 SC 501, p. 506; Hindustan Lever Ltd. Vs. Municipal Corporation of Greater Bombay, 1995 (3) Scale 24, p. 29; Birla Cement Works Vs. The Central Board of Direct Taxes, JT 2001 (3) Scale 256, p. 262- more so when the interpretation in favour of the assessee has been acted upon and accepted by the revenue for a long period.) (ii) If the legislature fails to express itself clearly and the tax payer escapes by not being brought within the matter of the law no question of unjustness arises. ( Vide: Commissioner of Income Tax, Bombay City 1 Vs. Jalgaon Electric Supply Co. Ltd., Bombay, AIR 1960 SC 1182, p. 1183. (iii) Equitable considerations are not relevant in construing a taxing statue. (vide : CIT, W.B. Vs. Central India Industries, AIR 1972 SC 397; Laxmikant Vs. Wealth Tax Commissioner, AIR 1973 SC 2258, p. 2262; and Commissioner of Income-tax Vs. Gwalior Rayon Silk Manufacturing Company, AIR 1992 SC 1782, p. 1786). (iv) Logic or reason cannot be of much of avail in interpreting a taxing statute. (vide Azamjha Vs. Expenditure Tax Officer, Hyderabad, AIR 1972 SC 2319, p. 2323; and Commissioner of Income- tax Vs. Gwalior Rayon Silk Manufacturing Company (supra). 21. In view of the aforesaid analysis, it could safely be inferred that the charges received by the petitioner as a hotel owner as “guest house higher charges” on annual basis from the bank employees association/union can be assessed to tax 20 under the ‘Act’. We do not find any infirmities and illegalities in the assessment orders, appellate order as well as revisional order, as such, the writ petition being devoid of any merit is dismissed. (A.M. Khanwilkar) Chief Justice (R.B. Misra) July 26, 2013. Judge (KRS) "