Karnataka High Court
Pankaj L Kothari vs The Assistant Commissioner Of on 22 November, 2013
Author: B.V.Nagarathna
Bench: B.V.Nagarathna
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 21ST & 22ND DAY OF NOVEMBER, 2013
BEFORE
THE HON'BLE MRS. JUSTICE B.V.NAGARATHNA
WRIT PETITION NOS.37975 & 38817 OF 2013 (T-RES)
C/W
WRIT PETITION NOS.40184-86 OF 2013, 37877/2013
& 38816/2013, 40385-86/2013, 41313-16/2013
W.P.NOS.37975 & 38817/2013:
BETWEEN:
PANKAJ L KOTHARI
S/O LATE SRI.LAXMIDAS T.KOTHARI
AGED 63 YEARS
R/AT FLAT NO.11, PALACE ORCHARDS APTS.,
6TH A CROSS, 9TH MAIN,
SADASHIV NAGAR,
BANGALORE-560080
... PETITIONER
(BY SRI.UDAYA HOLLA, SENIOR COUNSEL A/W SMT.JAYNA
KOTHARI, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
(LUXURY TAX-1), LAXMI COMPLEX,
3RD FLOOR, SESHADRIPURAM,
BANGALORE
2. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
(ENFORCEMENT-3), SOUTH ZONE,
BANGALORE
2
3. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF COMMERCIAL TAXES,
GANDHINAGAR,
BANGALORE-560009
REP BY THE COMMISSIONER OF COMMERCIAL
TAXES
4. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF PERSONNEL AND
ADMINISTRATIVE REFORMS,
BANGALORE
THROUGH THE PRINCIPAL SECRETARY
... RESPONDENTS
(BY SRI.S.V.GIRI KUMAR, AGA FOR R1-4)
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO DECLARE THE KARNATAKA TAXATION LAWS
AMENDEMENT ACT 2012 TO THE EXTENT THAT IT AMENDS
SEC 2[5-B] OF THE KARNATAKA TAX ON LUXURIES ACT
1979 TO INCLUDE TEMPORARY STRUCTURES WITHIN THE
DEFINITION OF A MARRIAGE HALL AS BEING ULTRA
VIRES AND UNCONSTITUTIONALN AND ETC.
W.P.NOS.40184-86 OF 2013:
BETWEEN:
M/S. EMERALD HEIGHTS
A PARTNERSHIP FIRM,
HAVING ITS OFFICE AT VASANT NAGAR,
BANGALORE 560052
REP BY ITS PARTNERS:
SHRI RABINDRA KUMAR
... PETITIONER
(BY SRI.UDAY HOLLA, SENIOR COUNSEL A/W SMT.JAYNA
KOTHARI, ADVOCATE)
3
AND:
1. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
(LUXURY TAX-1)
LAXMI COMPLEX, 3RD FLOOR,
SESHADRIPURAM,
BANGALORE 560020
2. THE ASSISTANT COMMISSIONER OF
COMMERCIALTAXES
(ENFORCEMENT-3) SOUTH ZONE,
BANGALORE 560001
3. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF COMMERCIAL TAXES,
GANDHINAGAR,
BANGALORE 560009
REP BY THE COMMISSIONER OF
COMMERCIAL TAXES
4. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF PERSONNEL AND
ADMINISTRATIVE REFORMS
BANGALORE 560001
THROUGH THE PRINCIPAL SECRETARY
... RESPONDENTS
(BY SRI.S.V.GIRI KUMAR, AGA FOR R1-R4)
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO QUASH THE NOTICES OF DEMAND AND
ASSESSMENT ORDERS DT.17.8.2013 FOR THE YEARS
2009-10, 2010-11 & 2011-12 VIDE ANNX-AC, AD & AE
RESPECTIVELY AND ETC.
W.P.NOS.37877/2013 & 38816/2013:
BETWEEN:
M/S WHITE PETALS (BANGALORE) PVT LTD
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT 1956
4
HAVING ITS REGISTERED OFFICE AT 31/3,
1ST CROSS, 2ND MAIN, 4TH BLOCK,
JAYALAKSHMIPURAM,
MYSORE-570012
AND ITS BANGALORE OFFICE AT # 2609
15TH MAIN, 9TH CROSS, "E" BLOCK,
SAHAKARNAGAR, BANGALORE
REP BY ITS DIRECTOR SRI M.V.MADHU
... PETITIONER
(BY SRI.UDAY HOLLA, SENIOR COUNSEL A/W SMT.JAYNA
KOTHARI, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER
OF COMMERCIAL TAXES (LUXURY TAX-1)
LAXMI COMPLEX,
3RD FLOOR, SESHADRIPURAM,
BANGALORE 560020
2. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
(ENFORCEMENT-3) SOUTH ZONE,
BANGALORE 560001
3. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF COMMERCIAL TAXES,
GANDHINAGAR,
BANGALORE 560009
REP BY THE COMMISSIONER OF
COMMERCIAL TAXES
4. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF PERSONNEL AND
ADMINISTRATIVE REFORMS
BANGALORE 560001
THROUGH THE PRINCIPAL SECRETARY
... RESPONDENTS
(BY SRI.S.V.GIRI KUMAR, AGA)
5
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO QUASH THE NOTICES OF DEMAND AND
ASSESSMENT ODERS DATED 29.7.2013 FOR THE YEARS
2010-11 AND 2011-12 VIDE ANN-AF & ANN-AG
RESPECTIVELY AND ETC.
W.P.NOS.40385-86/2013:
BETWEEN:
M/S PRINCESS GOLF
A PROPRIETORSHIP CONCERN
REP BY ITS PROPRIETOR
MR.CHAINRAJ
AGED ABOUT 43 YEARS,
PRINCESS ACADEMY
PALACE GROUNDS
BANGALORE-560080
... PETITIONER
(BY SRI.UDAY HOLLA, SENIOR COUNSEL A/W SMT.JAYNA
KOTHARI, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
(LUXURY TAX-1)
LAXMI COMPLEX, 3RD FLOOR,
SESHADRIPURAM
BANGALORE-560020.
2. THE ASSISTANT COMMISSISONER OF
COMMERCIAL TAXES
(ENFORCEMENT-7)
SOUTH ZONE
BANGALORE-560001.
3. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF COMMERCIAL TAXES
GANDHINAGAR
BANGALORE-560009
6
REP BY THE COMMISSIONER OF
COMMERCIAL TAXES
4. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF PERSONNEL AND
ADMINISTRATIVE REFORMS
BANGALORE-560001
THROUGH THE PRINCIPAL SECRETARY.
... RESPONDENTS
(BY SRI.S.V.GIRI KUMAR, AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLES
226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING
TO QUASH THE NOTICES OF DEMAND AND ASSESSMENT
ORDERS DATED 17.8.13 FOR THE YEARS 2010-11 AND
2011-12 VIDE ANNX-W AND X RESPECTIVELY AND ETC.
W.P.NOS.41313-16/2013:
BETWEEN:
THE GRAND CASTLE
A REGISTERED PARTNERSHIP FIRM
HAVING ITS OFFICE AT "SHREEYUM"
RAMANAMAHARSHI ROAD
PALACE GROUNDS
BANGALORE-570080
REP BY ITS PARTNER
SRI SATYA PRAKASH
... PETITIONER
(BY SRI.UDAY HOLLA, SENIOR COUNSEL A/W SMT.JAYNA
KOTHARI, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER
OF COMMERCIAL TAXES
(LUXURY TAX-1)
LAXMI COMPLEX, 3RD FLOOR
SESHADRIPURAM
BANGALORE-560020
7
2. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES (ENFORCEMENT-3)
SOUTH ZONE
BANGALORE-560001
3. THE STATE GOVERNMENT OF KARNATKA
DEPARTMENT OF COMMERCIAL TAXES
GANDHINAGAR
BANGALORE-560009
REP BY THE COMMISSIONER OF
COMMERCIAL TAXES
4. THE STATE GOVERNMENT OF KARNATAKA
DEPARTMENT OF PERSONNEL AND
ADMINISTRATIVE REFORMS
BANGALORE-560001
THROUGH THE PRINCIPAL SECRETARY
... RESPONDENTS
(BY SRI.S.V.GIRI KUMAR, AGA)
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO QUASH THE NOTICES OF DEMAND AND
ASSESSMENT ORDERS DATED 29.7.2013 FOR THE YEARS
2008-09, 2009-10, 2010-11 AND 2011-12 VIDE ANN-AB,
AC, AD AND AE RESPECTIVELY AND ETC.
THESE PETITIONS COMING ON FOR PRELIMINARY
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
As common questions arise in all these Writ Petitions, they have been clubbed and heard together and are disposed of by this common order. 8
2. These Writ Petitions assail the assessment orders of the tax periods 2009-10 to 2011-12 and notices of demand issued based on those orders for the aforesaid years by the 1st respondent-authority.
3. The facts in brief in all these case are as follows:
a. It is the case of the petitioner in W.P.Nos.37975/2013 and 38817/2013 that he is in catering business for the last two decades and he has entered into a licence agreement with the owners of Gayathri Vihar, which is located in Palace Grounds, Bellary Road, Bangalore. That venue is used for conducting events and functions such as marriages, parties and other conventions, shows, exhibition, etc. For that purpose, a temporary structure has been erected. Various local authorities such as the Bengalure Bruhat Mahanagara Palike, Bangalore Electricity Supply Company and Bangalore Water Supply and Sewage Board have all certified that the structure put up by the petitioner is a temporary structure. That for the period up to 01.04.2012, the petitioner had not registered 9 himself under the provisions of the Karnataka Tax on Luxuries Act, 1979 (hereinafter referred to as 'the Act', for short) as that Act did not apply to temporary structures put up by the petitioner. It is also stated that with effect from 01.04.2012, the definition of 'marriage hall' in sub-section 5(B) of Section 2 of the Act has been amended. Thereafter, the petitioner has registered himself under the Act. As the definition of 'marriage hall' has been amended with effect from 01.04.2012, the main contention of the petitioner herein is that a temporary structure would not come within the scope of the definition of marriage hall as it stood prior to 01.04.2012. It is contended that these assessment orders have been made by taking into consideration the amended definition which has come into effect from 01.04.2012 and on that premise, the petitioner has been assessed to luxury tax under the provisions of the Act and consequently impugned demand notices have been issued. The petitioner has also stated that the earlier assessment orders were assailed before this Court in W.P.No.51729/2012 and connected 10 matters and by order dated 16.01.2013, Writ Petitions were allowed and the matters were remitted to the competent authority for fresh consideration and subsequently impugned assessment orders and demand notices were issued.
b. Petitioner in W.P.Nos.40184-86 of 2013 is stated to be in the business of event management providing services for events such as marriages, seminars and get-together functions at 'Princess Academy', Palace Grounds, Bellary Road, Bangalore. Similar averments and contentions have been raised by this petitioner also.
c. Petitioner in W.P.No.37877/2013 and W.P.No.38816/2013 is stated to be in the business of providing pandal services at 'Tripuravasini', Bangalore Palace Grounds, Bangalore since the year 2010 where functions such as marriages, social events, corporate get-togethers, business meets and other functions are held. Similarly averments and grievances have been made by this petitioner also.
11d. In W.P.Nos.40385-86/2013, petitioner is stated to be engaged in providing event management services at 'Princess Academy' at Bangalore Palace Grounds, Bangalore for weddings, corporate functions and other social events. In these Writ Petitions also, the averments and contentions of the petitioner are identical to the other Writ Petitions. e. In W.P.No.41313-316/2013, petitioner is stated to be providing pandal services for the last five years and that it commenced its operations at the 'Grand Castle Party Hall' at Bangalore Palace Grounds, Bangalore where weddings, corporate get-togethers, business meets and other social gatherings are held. In these Writ Petitions also, the averments and contentions of the petitioner are similar to the other Writ Petitions.
4. The main contention of all these petitioners is that the structures put up by them are temporary structures and hence, they do not come within the scope of definition of 'marriage hall' under the Act. 12 Therefore, they are not liable to pay any luxury tax under Section 3-C of the Act which deals with levy and collection of tax on charges for marriage hall. It is only those halls which are in a building or part of a building, which come within the scope of the definition is the contention of the petitioners. According to these petitioners they are not rendering their services in any building or part of a building, therefore, they are not liable to pay any charges for the marriage hall. When the assessment orders were made for the period 2009-10 to 2011-12 and consequently demand notices were issued, the same were assailed in various Writ Petitions filed by the petitioners and those Writ Petitions were allowed and the matters were remitted to the competent authority for reconsideration of the issues raised by the petitioners essentially with regard to the applicability of the Act in question. On remand, the Assessing Authority has once again passed the impugned assessment orders stating that the petitioners are liable to pay tax under the Act. Consequently, demand notices have been issued 13 against the petitioners demanding the requisite tax under the Act. The assessment orders as well as the demand notices are thus assailed in these Writ Petitions.
5. I have heard Sri.Udaya Holla, learned Senior Counsel along with Ms.Jayna Kothari, for the petitioners and learned AGA Sri S.V. Giri Kumar, for the respondents-authorities and perused the material on record.
6. At the outset, learned AGA raised a preliminary objection to the very maintainability of the Writ Petitions. He contended that what has been assailed in these Writ Petitions are the assessment orders and demand notices issued by the Assessing Authority. That as against those orders, the petitioners have a right of appeal under the Act. That the petitioners have not availed the statutory remedy and instead have availed the extraordinary remedy of filing Writ Petitions under Articles 226 and 227 of the Constitution. He therefore submitted that Writ 14 Petitions be dismissed on the ground of maintainability and petitioners may avail the appellate remedy. In support of his contention, he relied upon an unreported judgment of the Division Bench of this Court in W.A.Nos.5182-93/2012 disposed of on 05.06.2013 wherein the Writ Petitions having been dismissed on the ground of an alternative remedy, were confirmed by the Division Bench.
7. In response to this preliminary objection, learned Senior Counsel has drawn my attention to several judgments of this Court as well as Hon'ble Supreme Court to contend that despite availability of an alternative remedy, under certain circumstances, the Writ Court could interfere in matters including matters concerning taxation. Reliance has been placed on AIR 2011 SC 3748; 2009 [14] SCC 338; 2001 [1] SCC 740 and AIR 1984 KAR 4. It was therefore contended that having regard to the nature of controversy raised by the petitioners in these Writ Petitions, touching upon the very applicability of the 15 Act as well as the jurisdiction of the competent authority to assess the petitioners under the provisions of the Act in question, the Writ Petitions are maintainable.
8. As far as the merits of the matter is concerned, it was submitted by the learned Senior Counsel that the Assessing Authority failed to appreciate the scope of definition of 'marriage hall' under the provisions of the Act, particularly when the original definition lays emphasis on building or part of a building whereas in the instant case, all these petitioners are rendering their services in temporary structures and therefore they do not come within the scope of the Act. It was contended that only where luxuries are provided in a building or part of a building that the Act would apply and not otherwise. Hence, the Assessing Authority had no jurisdiction to assess these petitioners for payment of luxury tax under the Act as they operate in temporary structures. Drawing my attention to amendment of the definition of 16 'marriage hall' which has come into force with effect from 01.04.2012 which encompasses not only a building or part of a building but also temporary structure or property as defined in Section 3 of Transfer of Property Act, 1882, it was contended that the expression 'building' must be given its contextual meaning particularly having regard to the object of amendment of the definition of marriage hall with effect from 01/04/2012 with a view to expand the scope of the said definition so as to bring in even temporary structures within the purview of luxury tax. In this context, reliance was placed on the meaning of the expression 'building' with reference to dictionary meanings and also by referring to the expression as understood in normal parlance. It was therefore contended that the assessment orders as well as the demand notices were issued beyond the jurisdiction of the Assessing Authority and they are liable to be quashed as a retrospective effect to the amended definition of marriage hall has been given. 17
9. Per contra, learned AGA has rebutted his arguments by contending that these assessment orders do not relate to any period after the amendment. They are relatable to the period prior to the amendment. Insofar as the structures in question are concerned, they undoubtedly come within the scope of the definition even prior to 2012 amendment. That the assessment orders were passed keeping in mind the definition marriage hall prior to 2012 amendment and no retrospective effect to the amendment has been given. He has also drawn my attention to the meaning of the expression 'building' by placing reliance on certain dictionaries and lexicons. He stated that the Assessing Authority was justified in assessing these petitioners under the provisions of the Act and that the assessment orders and demand notices do not call for any interference.
10. By way of reply, learned Senior Counsel stated that till 01.04.2012, when the amendment to the definition of marriage hall was enforced, 18 petitioners had not registered themselves under the provisions of the Act. But they have done so subsequent to that date having regard to the expansive definition of marriage hall made by way of amendment. That except for the assessment years 2009-10 to 2011-12, they have never been assessed under the provisions of the Act and rightly so. It was therefore contended that the Assessing Authority by passing the impugned assessment orders is giving a retrospective operation to the definition of marriage hall as amended with effect from 01.04.2012 which is impermissible. It was therefore contended that the impugned assessment orders and the demand notices may be quashed.
11. Having heard the learned Counsel for the parties, the following points would arise for consideration.
1. Whether the Writ Petitions are maintainable?
19
2. If answer to point No.1 is in affirmative, whether the impugned assessment orders and demand notices are legal?
In answering this point, the applicability of the Act to the petitioners upto 01.04.2012 would have to be considered.
Regarding Point No.1:
12. The exercise of powers by the High Court under Article 226 of the Constitution is well settled. It is often said that the exercise of power under Article 226 of the Constitution should not be like "a bull in a china shop". No doubt, the scope of those articles are wide but over a period of time, Courts have evolved principles under which that power would not be exercised not merely on the basis of discretion but on other principles also. One of the reasons for not exercising power under Article 226 of the Constitution is when the petitioner has an alternative and efficacious remedy, either statutory or otherwise. But despite the availability of an alternative and 20 efficacious remedy, High Courts have nevertheless exercised powers under Article 226 of the Constitution particularly where fundamental rights are affected or where rules of natural justice are violated or where there is a failure on the part of the authority concerned to confine itself within the bounds of its legitimate jurisdiction or where there is a failure to exercise a jurisdiction vested in it or where there is an error of law apparent on the face of the record. If a person is aggrieved by any of the aforesaid reasons, in that event jurisdiction under Article 226 of the Constitution is exercised. These principles have been eloquently stated by this Court in Karnataka State Road Transport Corporation, Bangalore and another, Appellants V/s. Karnataka State Transport Authority and another, Respondents (AIR 1984 KAR 4). In fact alternative remedy is not a bar to exercise jurisdiction under Article 226 of the Constitution even in taxation matters. In the realm of revenue, in Smt. Har Devi Asnani V/s. State of Rajasthan & others (AIR 2011 SC 3748), the Hon'ble Supreme Court held that the 21 Writ Petition against the demand of deficit stamp duty cannot be rejected on the ground of availability of an alternative remedy of revision under Section 65 of the Stamp Act. The Court has to see whether determination of value of property and demand of deficit stamp duty was exorbitant and arbitrary.
13. Similarly in Godrej Sara Lee Limited V/s.
Assistant Commissioner (AA) & another (2009 [14] SCC 338), it was stated that where a statutory authority is questioned on the ground of lack of jurisdiction, alternative remedy is not a bar. In that case, notification enhancing the taxable rate on mosquito repellents from 4% to 12.5% was questioned as illegal and ultravires Kerala Value Added Tax Act, 2003. The Hon'ble Supreme Court held that the issue being a jurisdictional one, it should have been determined by the High Court in exercise of writ jurisdiction under Article 226 of the Constitution.
14. Also in State of Tripura V/s. Manoranjan Chakraborty & others (2001 [10] SCC 740), in the context of Tripura Sales Tax Act, the Hon'ble Supreme 22 Court held that where gross injustice was done, interference is justified and the existence of an alternative remedy by way of appeal or revision, would be no bar to exercise writ jurisdiction.
15. No doubt, learned AGA has relied upon the decision of a Division Bench of this Court wherein a challenge was made questioning the legality and correctness of assessment orders passed by the Assessing Officer under the provisions of the Karnataka Value Added Tax Act and a Division Bench of this Court directed the petitioner to avail the alternative remedy. But in the judgment of the Division Bench, there is no reference to the challenge being made to the reassessment order on a jurisdictional issue as is present in these cases. In that context, the Division Bench had rightly directed the petitioner therein to avail the statutory remedy. But having regard to the nature of challenge raised by the petitioners herein, the judgment of the Division Bench would not apply. But on the other hand placing reliance on the judgments of the Hon'ble Supreme 23 Court, it is held that the Writ Petitions are maintainable.
Regarding Point No.2:
16. The next point to be considered is with regard to the validity of assessment orders as well as demand notices. The case of the petitioners is that they are rendering certain services for organizing marriages, corporate events, conventions, etc in temporary structures put up at various locations of Bangalore Palace. While putting up these temporary structures, steel and iron girders have been used. It is their contention that these structures do not qualify within the scope of the expression 'building' which is the essential requirement for the purpose of definition of sub-Section 5B of Section 2 of the Act and therefore, Assessing Authority could not have assessed these petitioners under the provisions of the Act for the purpose of luxury tax on the premise that these petitioners are rendering services in a building within the definition of the marriage hall under sub- section 5B of Section 2 of the Act.
24
17. This contention is countered by learned AGA by stating that the structures wherein the petitioners operate are not temporary structures. As these structures are fixed in the earth, they are as good as permanent structures. It may be that stone, brick or cement are not used but the structures are based on the support of iron and steel which are embedded into earth and therefore they are permanent in nature. They could be removed only at the volition of the organizers or otherwise for all practical purposes, they would be intact for all times and therefore, they must be construed as 'building' within the meaning of the definition of the marriage hall.
18. Before answering this point, it would be relevant to refer to the charging section under the Act which is Section 3C which reads as follows:
3-C: Levy and collection of tax on charges for marriage hall - Subject to the provisions of this Act, where charges for luxury provided in a marriage hall are not less than five thousand rupees per day 25 there shall be levied and collected a tax at the rate of ten per cent of such charges:
Provided that where charges for marriage hall are payable otherwise than on daily basis, then for the purposes of determining the tax liability under this section, the charges shall be computed as for a day, based on the period of occupancy for which the charges are payable."
The expression 'marriage hall' is defined in sub- section 5B of Section 2 of the Act and it reads as under:-
2(5-B) - "Marriage Hall" means, Kalyana Mantap, Shadi Mahal, Community Hall, a building or part of a building where accommodation is provided for marriage or reception or matters related therewith, and includes seminar, convention, banquets, meeting or exhibition-cum-sale hall or such other hall as may be specified by the Commissioner whether functions are conducted in such halls regularly or not;" 26
The aforesaid definition was prior to its amendment which is under consideration in these cases. It would be useful to refer to the amended definition also with effect from 01.04.2012 and the same reads as follows:
2(5-B) - "Marriage Hall" means,
(i) Kalyana Mantap, Shadi Mahal, Community Hall, a building or part of a building or a temporary structure or a property as defined in Section 3 of the Transfer of Property Act, 1882 where accommodation is provided for marriage or reception or matters related therewith or for organizing any official, social or business function whether functions are conducted in such place regularly or not;
(ii) Seminar, convention, banquets, meeting or exhibition hall or a temporary structure or a property as defined in Section 3 of the Transfer of Property Act, 1882 where accommodation is provided for marriage or reception or matters related therewith or for organizing any official, social or business function whether 27 functions are conducted in such place regularly or not;
(iii) Any other place or temporary structure as may be specified by the Commissioner, where accommodation is provided for marriage or reception or matters related therewith or for organizing any official, social or business function whether functions are conducted in such place regularly or not;
'Charges for marriage hall' is defined in sub- section [1-A] of Section 2 of the Act and it reads as under: -
2[(1-A) - "Charges for marriage hall"
include charges for air-conditioning, chairs, utensils and vessels, shamiana, electricity, water, fuel, interior or exterior decoration or any amount received by way of donation or charity or by whatever name called in relation to letting out the marriage hall but do not include any charges for food and drinks;
Explanation - If any question arises whether any charges are charged for marriage hall, such question shall be 28 referred to the Commissioner and the decision of the Commissioner shall be final and shall not be called in question in any Court.
'Luxuries' is defined in sub-section [4-B] of Section 2 of the Act and it reads as follows:-
"2[4-B] "Luxuries" mean services
ministering to enjoyment, comfort or
pleasure extraordinary to necessities of life;
19. On a conjoint reading of these provisions, it is noted that where the charges for luxury provided in a marriage hall are not less than five thousand rupees per day there shall be levied and collected tax at the rate of 10% of such charges. Proviso to Section 3-C states that where charges for marriage hall are payable otherwise than on daily basis, then for the purposes of determining the tax liability under that section, the charges shall be computed as for a day, based on the period of occupancy for which the charges are payable.
29
20. Sub-section [5-B] of Section 2 was inserted by Act No.6 of 1995 with effect from 01.04.1995. Prior to that, luxuries provided in a marriage hall were not subjected to tax. The definition of marriage hall prior to 1.4.2012 under sub-Section 5B of Section 2 of the Act meant Kalyana Mantap, Shadi Mahal, Community Hall, a building or part of a building where accommodation was provided for marriage or reception or matters related therewith, and included seminar, convention, banquets, meeting or exhibition- cum-sale hall or such other hall as specified by the Commissioner whether functions were conducted in such halls regularly or not.
21. The amendment made to the definition is with effect from 01.04.2012. After amendment, the definition of marriage hall includes in Sub-clause (i) of sub-Section (5-B) of Section 2 of the Act not only Kalyan Mantap, Shadi Mahal, Community Hall, a building or part of a building but also a temporary structure or a property as defined in Section 3 of the 30 Transfer of Property Act, 1882 where accommodation is provided for marriage or reception or matters related therewith or for organizing any official, social or business function whether functions are conducted in such place regularly or not. Sub-clause [ii] incorporates seminar, convention, banquet, meeting or exhibition hall or a temporary structure or a property as defined in Section 3 of the Transfer of Property Act, 1882 where accommodation is provided for marriage or reception or matters related therewith or for organizing any official, social or business function whether functions are conducted in such place regularly or not. Sub-clause [iii] states that any other place or temporary structure as may be specified by the Commissioner, where accommodation is provided for marriage or reception or matters related therewith or for organizing any official, social or business function whether functions are conducted in such place regularly or not.
31
22. On a comparison of the definition prior to 01/04/2012 with the amended definition, an expansive interpretation can be given insofar as amended definition is concerned. This is necessary in order to understand the definition as it existed prior to 01/04/2012, which is the period under consideration. While the earlier definition was with regard to Kalyan Mantap, Shadi Mahal, Community Hall, a building or part of a building, the amended definition not only incorporates all of the above and also includes a temporary structure or a property as defined in Section 3 of the Transfer of Property Act, 1882 within the ambit of definition of 'marriage hall'. Secondly, in such a building or temporary structure or property as defined in Section 3 of Transfer of Property Act, 1882 where a seminar, convention, banquet or exhibition is held, luxuries provided in those events are taxable. Thirdly, the third clause of the amended definition is an omnibus clause where the Commissioner can specify any other place or temporary structure, where accommodation is provided for marriage or reception 32 or matters related therewith or for organizing any official, social or business function whether functions are conducted in such place regularly or not, are liable to luxury tax.
23. Therefore, the intention of the legislature now is not only to tax the luxuries provided in a building or part of a building but also in temporary structures where marriages or other social, official and business functions are held and also in a seminar, convention, banquet, meeting or exhibition hall where such activities are held and luxuries provided are taxable. Therefore, the intention of the legislature is to expand the scope of definition of 'marriage hall' not only having regard to the nature of the structure but also the nature of activities carried on in such structures where luxuries as defined in sub-Section 4B of Section 2 of the Act are provided.
24. In this context, the charging section (Section 3-C) says that the tax is with regard to charges for luxuries provided. Sub-section 1A of 33 Section 2 defines 'charges for luxuries provided in a marriage hall'. It includes charges for air- conditioning, chairs, utensils and vessels, shamiana, electricity, water, fuel, interior or exterior decoration or any amount received by way of donation or charity or by whatever name called in relation to letting out the marriage hall but do not include any charges for food and drink.
25. The petitioners admittedly have registered themselves under the provisions of the Act with effect from 01.04.2012 as they concede that they come within the amended definition of marriage hall although luxuries provided by them are in a temporary structure. But in the context of these Writ Petitions, the question is as to whether the original definition of marriage hall can include within its scope temporary structure also. The comparison of the earlier definition with the amended definition of marriage hall is in order to bring out the fact that the earlier definition used the expression "building or part 34 of a building". It is in this context, the contention of the petitioners is that the Assessing Authority while assessing the petitioners prior to the amendment in effect has given a retrospective effect to the amendment so as to assess the petitioners who are providing luxuries in temporary structures under the earlier definition of marriage hall.
26. In this context, both sides have produced material on the definition of building from various dictionaries and other legal authorities.
27. Learned Senior Counsel has relied upon the definition of building from the following authorities:
i) Black's Law Dictionary defines the word 'building' as under:
Building: A structure with walls and a roof, esp. a permanent structure. For purposes of some criminal statutes, such as burglary and arson, the term building may include such things as motor vehicles and watercraft.35
ii) The Concise Oxford Dictionary of Current English, 7th Edition defines the word 'building' as follows:
Building: In vbl senses;
permanent fixed thing built for
occupation (house, school, factory, stable, etc.); line, limit relative to frontage beyond which owner may not build; society (accepting investments at interest, and lending to person buying houses, etc.)
28. Learned AGA has also relied upon the definition of building from the following authorities:
i) Black's Law Dictioinary, 5th Edition defines the word 'building' as follows:
Building: Structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education, and the like. A structure or edifice inclosing a space within its walls, and usually, but not necessarily, covered with a roof. Netter v. Scholtz, 282 Ky. 493, 138 S.W.2d 951, 953.36
ii) KJ Aiyer's Judicial Dictionary, 14th Edition defines the word 'building' as follows:
The word 'building' includes any structure or erection or part of a structure or erection which was intended to be used for residential, industrial, commercial or other purposes whether in actual use or not. [Rajeshwar Parashad v Municipal Corporation of Delhi AIR 1991 Del 71].
It is used in the ordinary sense of a house... Assuming that what was leased out was a vacant site, it should be regarded as a building in view of the fact that it had a superstructure and it was taken on lease for the purpose of running the theatre.
[Shahnawaz Begum v Potina Srinivasa Rao AIR 1964 AP 233].
It means any house, hut, shed or other roofed structure, for whatsoever purpose and of whatever material constructed, and 'every part thereof' but does not include a tent or other portable and merely temporary shelter'. [Shivji Khetai Thacker v 37 Commissioner of Dhanbad Municipality AIR 1964 Pat 186].
iii) Supreme Court on Words and Phrases, 2nd Edition defines the word 'building' as under:
Building: In Words and Phrases, Permanent Edn., Vol. 19-A, it is stated: "The word "building" necessarily embraces the foundation on which it rests; and the cellar, if there be one, under the edifice, is also included in the term "house" or "building". If there be a cellar, the word "building" includes it, unaffected by the height above the foundation Benedict v Ocean Ins. Co.: 39 NY 389". Jai Narain Parasrampuria v Pushpa Devi Saraf, [2006] 7 SCC
756.
Furthermore, it is now well settled that the building includes the land on which it stands, unless by express stipulation it is excluded. See T.Lakshmipathi v. P.Nithyananda Reddy, [2003] 5 SCC 150.38
'Building' is "a structure of the nature of a house built where it is to stand" and includes 'the fabric of which it is composed, the ground upon which its walls stand and the ground embraced with those walls".
D.G.Gose and Co. V. State of Kerala (1980) 2 SCC 410: AIR 1980 SC 271.
The word 'building' in its ordinary sense denotes 'a structure or edifice including a space within its walls and usually covered with a roof, such as a house, a church, a shop, a barn or a shed." The natural or ordinary meaning to be given to the word "Buildings" is something, which has been built."
iv) The Law Lexicon, edited by P.Ramanatha Aiyar, defines the word 'building' as follows:
Building: A thing composed of the building and the ground that the fabric upon and encloses. Corporation of the City of Ria v. Bishop of Vancoiiver. AIR 1921 P (P.C.) 39 What is a "building" must always be a question of degree, and circumstances: its "ordinary usual meaning is, a block of brick or stone covered in by a roof" [Per Esher, M.R., Williams, (1892) 1 Q.B. 264]
29. While adverting to the meaning of the expression 'building or part of a building', learned AGA stated that the object of the amendment made to the definition of 'marriage hall' is clarificatory in nature so as to bring within the scope of expression building even a temporary structure and therefore the Assessing Authority was right in assessing the petitioners to tax under the Act.
30. This submission was countered by the learned Senior Counsel for the petitioners by stating that the amendment is with effect from 01.04.2012. Although the definition is by way of a substitution and is not clarificatory, the legislature has not given a retrospective effect to the definition. 40
31. Bearing in mind these contentions, the expression 'building or part of a building' would have to be interpreted having regard to the approach to be made while considering taxing provisions. In Controller of Estate Duty V/s. R.Kanakasabai & others (1973) 4 SCC 169), the Hon'ble Supreme Court held that if a taxing provision is ambiguous and is reasonably capable of more than one interpretation, that interpretation which is beneficial to the subject must be adopted. This is a well accepted rule of construction. Also, it is impermissible for the Court to read into a taxing provision words which are not there or exclude words which are there. The words found in the provision must be given their natural meaning.
32. In the light of the aforesaid discussion, the scope of the expression "building or part of a building"
as is in the original definition of 'Marriage Hall' has to be interpreted. As already stated, the definition of marriage hall was incorporated into the Act with effect from 01.04.1995. The object of that definition was to 41 tax luxuries provided in Kalyana Mantap, Shadi Mahal, Community Hall and a building or part of a building where accommodation was provided for marriage or reception or matters related therewith and also included seminar, convention, banquets, meeting or exhibition cum sale hall or such other hall as was to be specified by the Commissioner whether functions were conducted in such halls regularly or not.
33. The Assessing Officer while applying the definition of marriage hall in the instant case, has stated that in the definition of "marriage hall", the legislature has not restricted levy of tax only in respect of marriages or other functions in a permanent building. According to him, the word used in the definition is "Kalyanmantap" which means a place where a marriage ceremony is conducted. According to him, a kalyanmantap, madhuve mantap or a structure built up either in a shamiana or any other mantap erected for the purpose of marriage comes within the expression "Kalyanamantap". On 42 this premise, the contention of the petitioners that they are not liable to pay luxury tax as the structure in which they provide services is a temporary one was not accepted. In other words, the Assessing Officer stated that irrespective of the fact whether kalyanamantap is in a building or in a temporary structure, would be amenable to tax under the Act.
34. Learned Senior Counsel appearing for the petitioners has contended that there is a fallacy in the reasoning of the Assessing Officer as he has not considered the category of structure that have been mentioned in the original definition. That definition has the following expressions under a particular category or genus viz., "kalyana mantapa, shadi mahal, community hall, a building or part of a building where accommodation is provided for marriage or reception or matters related therewith." The second category is "such other hall as may be specified by the Commissioner." This was contrasted with the amended definition, wherein there are three 43 different categories of structures mentioned, i.e., i) kalyanamantapa, shadi mahal, community hall, a building a part of a building; ii) a temporary structure and iii) a property as defined under Section 3 of the Transfer of Property Act, 1982, where accommodation is provided for marriage or reception and matters related therewith. On a comparison of the two definitions, it was contended that the expression "kalyanamantap" must necessarily be read as being in "any building or a part of a building" in which case alone would be amenable to tax under the unamended definition.
35. Reliance has been placed on the principle of noscitur a sociis to elaborate on this aspect of the matter. This principle has been applied in the decision of the Hon'ble Supreme Court in Pradeep Aggarbatti, Ludhiana etc., V/s. State of Punjab and others (1988 SC 171). The rule of construction noscitur a sociis, applies when two or more words which are susceptible of analogous meaning are 44 coupled together and are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus applied when words and phrases or associated words take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of the doubtful word may be ascertained by reference to the meaning of words associated with it.
36. If the said rule of construction is applied in the instant case, it is noticed that the expression "community hall" necessarily means that it is a part of a building or a building as such. The words "kalyanmantap" and "shadi mahal" are used conjointly with the words "community hall" and those expressions are used along with the expression "a building or a part of a building" where accommodation is provided for marriage or reception or matters related therewith. Thus, the genus that is discerned 45 from a reading of these expressions namely kalyana mantap, shadi mahal, community hall is that they must be in a building or a part of a building, i.e., a building or part of a building is utilized for a marriage or a reception or matters related therewith or in respect of any other hall if it is specified by a Commissioner, irrespective of any functions conducted regularly or not, come within the nomenclature of marriage hall. On a reading of second portion of definition of marriage hall also, it becomes clear that use of the word "hall" means, it should be in a building or a part of a building. Therefore, the entire definition of marriage hall as it stood prior to the amendment was in relation to the use of a building or a part of a building for a marriage or other functions or in respect of matters related therewith. The necessary implication is that it excludes any structure which is not a building or a part of a building.
37. In this context, the definition of building which has been cited by both sides assumes 46 significance. On an analysis of the definition of the expression "building" which have been culled out supra, the inevitable conclusion is that the expression building is equated to a permanent structure. The expression "building" does not encompass a temporary structure. But in the instant case, it has been contended by the learned Addl. Government Advocate that the structure, whether permanent or temporary would not make a difference as long as the structure is utilized for marriages and functions. The aforesaid contention cannot be accepted having regard to the analysis of the definition as it stood prior to 01/04/2012. Therefore, a kalyana mantap or a shadi mahal, if in a building or part of a building and used for a marriage or reception are matters related therewith would come within the definition of "marriage hall". On a perusal of the various definitions of the expression "building", it is noted that a building is relatable to a permanent structure built out of brick, stone, mud etc., having a permanent roof and constructed on a foundation. Therefore, whether 47 it is a kalyana mantap, shadi mahal or any other place where a seminar, convention or a banquet is held, it must be in a building or a part of a building. Therefore the contention that a temporary structure would also come within the definition 'marriage hall' even prior to 01/04/2012 cannot be accepted.
38. Having regard to the scope of the definition of marriage hall under the Act and the nature of structure which is put up by the petitioners with iron plates, rods wood etc., the same cannot be considered to be permanent structure so as to be equated to a building. As aforesaid, even a plain meaning of the expression "building" implies that it is built with stone, bricks and cement as is discernable from the definitions culled out above. Therefore, the definition of 'marriage hall' would not be applicable to the petitioners' structures, which are temporary structures. In fact, it is in order to make the temporary structures put up by the petitioners also amenable to tax, the amendment was made with 48 effect from 01/04/2012, wherein apart from building, temporary structures or any structure within Section 3 of Transfer of Property Act, would also come within the definition of marriage hall so as to be liable for tax under the Act.
39. In that view of the matter, the Assessing Officer was not right in holding that a kalyanamantap, irrespective of whether it is in a temporary structure or in a building would be liable for tax under the Act. If a kalyanamantap is in a building or a part of a building, then only the statute would apply to such a kalyanamantap. Therefore, the Assessment Officer was not right in exercising his jurisdiction in assessing the petitioners herein under the provisions of the Act prior to 1/4/2012. Hence, the impugned assessment orders and also the demand notice are quashed.
40. It is needless to observe that as is admitted by the petitioners, they are registered under the provisions of the Act with effect from 01/04/2012 and therefore, they are amenable to tax under the Act 49 from that date onwards. As these assessment orders and demand notices are vis-à-vis the period prior to 01/04/2012, as the Act does not apply to them, the assessment order and impugned notices have been quashed. The writ petitions are allowed. Parties to bear their respective costs.
Sd/-
JUDGE S*