Income Tax Appellate Tribunal - Bangalore
A.S.K. Brothers Ltd. vs Dy. Cit/Dy. Cit V. A.S.K. Brothers Ltd. on 21 November, 2000
Equivalent citations: (2001)70TTJ(BANG)673
ORDER
I.C. Sudhir, J.M. The subject-matter of all the eight aforesaid appeals is the common order, dated 23-6-1999, of the Commissioner (Appeals)-I, Bangalore, we thus are disposing of an these appeals vide consolidated order for the sake of brevity and convenience. Out of these eight appeals, five appeals related to the assessment years 1994-95 to 1998-99 have been preferred by the assessee, whereas the remaining three appeals for the assessment years 1994-95 to 1996-97 have been filed by the department.
2. We have heard Shri S. Venkateshan, the learned authorised representative and Shri K. Ramesh, the learned Departmental Representative with Shri S.M. Kesh Kamat, the learned assessing officer at length. They have also furnished their written submissions in support of their respective cases. It is pertinent to mention over here that after receiving copy of the paper book of the department which consists of document the correspondences, statements recorded during the proceedings and order of the High Court of Karnataka, the assessee sought leave to file its rebutted reply the those documents, etc., which has been allowed. We have considered the arguments advanced by the parties, materials available on the record and have gone through the order impugned as well as the decisions cited by the parties.
3. The appeals of the assessee he against the order of the Commissioner (Appeals)-I, Bangalore, dated 23-6-1999, on fourteen common grounds. The assessee also raised additional grounds at the time of hearing this appeal. The grounds are argumentative.
4. In their above three appeals for the assessment year 1994-95, 1995-96 and 1996-97. the department has impugned the order, dated 23-6-1999, of the Commissioner (Appeals) mainly on the grounds that the Commissioner (Appeals) has erred in following the decision of the Himachal Pradesh High Court in the case of Himachal Pradesh Tourism Development Corporation Ltd. v. Union of India (1999) 10 DTC 257 (HP-HC) : (1999) 238 ITR 38 (HP). Since the facts of this case are distinguishable from that of the case of the assessee; in the case of the assessee, the hotel comes in the star category whereas in the case of Himachal Pradesh Tourism Development Corporation Ltd. (Supra), their hotels consisted of dormitories and independent rooms having tariffs from Rs. 50 to Rs. 1,500 and thus in their matter relief from expenditure-tax was given in the case where people stayed in dormitories and low traiff rooms; and that intention of the legislature in using the phrase any unit with rent of more than Rs. 1,200 in the Expenditure Tax Act was not to tax only the rooms having rent of above Rs. 1,200 but all the rooms in a hotel where even a single room has a rent of more than Rs. 1,200, as had the intention of the legislature been to tax the rooms having a tariff of above Rs. 1,200 only, then instead of the phrase any unit they would have used the phrase a unit or all units.
5. The brief facts of the case are that the assessee is a star category hotel though no such certificate has been issued to it by the concerned tourism department. After having resorted to an action under section 132 of the Income Tax Act in its premises on 22-7-1998, it was revealed that the assessee was liable for expenditure-tax, but it had not filed necessary return; the assessing officer issued a letter dated 11-8-1998, under the subject heading "expenditure-tax returnin your case-for assessment years 1994-95 to 1998-99 regarding" and with contents as it is gathered that you have been collecting expenditure-tax from customers for over a number of years, therefore, you are liable to file expenditure-tax returns for the assessment year 1994-95 to 1998-99, in this connection you are requested to let me know immediately as to whether you have filed the said returns and remitted the tax to government account duly, if yes, produce proof of same. The assessee did not respond to the letter. Then another letter, dated 12-1-1999, was issued to the assessee to file returns for these years within 10 days with some required details. The assessee wrote letter, dated 21-1-1999, and again letter, dated 29-1-1999, seeking time for filing returns which were filed on 10-2-1999, declaring nil amount as chargeable expenditure for all the assessment years 1994-95 to 1998-99, The assessing officer issued notice under section 9(1) of the Expenditure Tax Act and passed the order under section 9(2) of the said Act for all these assessment years on 15-3-1999. The assessee felt aggrieved with these orders and preferred first appeal before the Commissioner (Appeals) against the same. The Commissioner (Appeals) vide its common, order dated 23-6-1999, for all these assessment years, partly allowed the appeals for the assessment years 1994-95 and 1995-96; regarding their expenditure-tax for the assessment year 1996-97 the Commissioner (Appeals) was of the view that it may require recomputation as mentioned in para 35.3 of its order in case the assessee submits the necessary details and bring the case for recomputation in accordance with the directions read with that at para 35.2 of the order. The appeals for the assessment years 1997-98 and 1998-99 were dismissed. Against these common orders of the Commissioner (Appeals) for the aforesaid assessment years the assessee has preferred the present second appeals before us.
6. In the original ground No. 2 of its appeals, the assessee has raised the validity of service of the notice under section 11 of the Act. According to the assessee the Commissioner (Appeals) should have annulled the assessment as one without jurisdiction. He should not have upheld the validity of the order on the ground that the return filed by the assessee was voluntary return filed under section 8(3) of the Expenditure Tax Act. According to the assessee he has totally overlooked the fact that the assessee never filed any return under section 8(3) of the Expenditure Tax Act as it was filed under the protest. The issue of notice was illegal and invalid. The assessee filed the return under protest and declared the nil expenditure chargeable to tax. The assessee denied the applicability of the Act, especially because of filing the return of expenditure-tax under protest. The assessee has challenged the validity of the service of the notice. The service of the notice is not in dispute. Filing the return under protest does not absolve the assessee from paying the expenditure-tax to the government. The assessee is not an ordinary assessee. There was no meaning of making allegation of threats to take action ex parte. The assessment made is not in dispute. The assessee attributed the word letter to the notice issued under section 11 of the Act. Whether the letter was addressed or notice was issued for making the assessment of expenditure-tax is not a material point to take any benefit out of the letter being not a valid notice. The assessee also alleged violation of principles of natural justice. Its allegation is that only one day was given to the assessee to inspect the voluminous data on 11-3-1999, and assessment order was passed on 15-3-1999. Thus sufficient opportunity was not given to the assessee for any rebuttal in respect of a complicated case. Issuing a notice to show cause and making an assessment of expenditure-tax does not amount that the assessing officer has violated the principles of natural justice. Time given was also sufficient as the assessee was conversant with its documents. The above-narrated contentions are without prejudice.
7. The assessee further averred in ground Nos. 5 to 14 that the assessing officer and the Commissioner (Appeals) have failed to appreciate the room charges for any unit of residential accommodation at the time of incurring expenditure did not exceed prescribed amount or more per day per individual as per the terms of section 3 of the Act. According to the assessee there was no obligation to collect any tax under section 14 of the Expenditure Tax Act and to pay the same to the government. The assessee is a well-known organisation (an institution to carry on the hotel business and to provide rooms and suites to the customers visiting the hotel namely, Atria Hotel). It also carries on the business of lodging and boarding. According to the assessee suite is a single unit of residential accommodation and total room charges for the occupation should not be dividend by the above persons who were entitled to occupy the rooms, suites to arrive at the charges per person per day. This contention appears to be not only primarily incorrect but to give go-bye to the correct facts. The assessee owns a hotel. According to it the hotel is situated in a hilly area coming within the purview of section 80-IA(5)(ii) of the Income Tax Act. The approval of the prescribed authorities under section 80-IA(4)(iii) of the Income Tax Act, 1961, is with reference to other places as the Central Government specified and not to a hotel in hilly area and, therefore, there was no application under section 4 of the Expenditure Tax Act to levy the expenditure-tax. In response to the submissions of the department; in view of the certificate issued by the Survey of India that the height of Bangalore City Railway Station is at 902 mts. and Bangalore Airport is at 899 mts. the assessee contended that Bangalore does qualify for deduction as hilly area. The assessees further contention is that the hotel in question is not situated in these two localities of the sprawling city of Bangalore which is not only a hilly area but a place of pilgrimage too and these two locations are in the valleys of undulated Bangalore. The assessees further averments without prejudice are that room charges for the unit of residential accommodation is inclusive of certain food to be supplied and other services which are to be given and not charged separately and consequently the deduction of 40 per cent towards food and other services also have been claimed under the guise that they were not charged and if such charges are reduced from the rent of the accommodation the remaining charges would not be eligible to charge the expenditure-tax. In ground No. 9 of the appeal it is contended that the officers of the department have erred in holding that the assessee collected tax in the bills. They have failed to appreciate the correct facts and in rejecting the explanation furnished on behalf of the assessee. The assessee challenging the levy of the tax is a different aspect than the actual collection of the tax in the bills. The assessee collected the expenditure-tax from the customers as a trustee or an agent of the government to pay the said collected expenditure-tax to the government. Collecting the expenditure-tax as an agent of the government and not making the payment of the same to the government does not hold good nor the assessee can be absolved from it. This proposition of collecting the expenditure-tax in the bills from the customers and again contending that there is no application of the Expenditure Tax Act to pay the expenditure-tax is not a correct proposition. This averment is contradictory in itself. There would not be any meaning to contend that the expenditure-tax should not be collected from the customers in the bill but at the same time the assessee is not liable to pay to the government. Assessee averred in ground No. 10 of the appeal that in case of validity of levy of tax is upheld in principle in that even the levy of tax should be only to the expenditure incurred in such rooms exceeding the prescribed rate and not the entire expenditure incurred in the hotel, where the room tariff is less than the prescribed limit as the word any in section 3 would depend on interpreting the statutory provision. Interpretation cannot be restricted in a particular manner as the assessee wants to do it. The word any indicates any one premises let out to a customer to stay there against the payment to the assessee. Any premises provided to different customers to stay there against the payment would be any premises but the interpretation of the words any or all does not make any difference.
8. The assessee again averred in original ground No. 11 of the appeal without prejudice as while computing the expenditure of chargeable expenditure the department should have excluded the receipt from restaurants, conference hall, bar, etc., as they were not taken in lieu of section 3(2) of the Expenditure Tax Act. According to the assessee the quantum of chargeable expenditure computed is arbitrary and excessive and liable to be reduced substantially. The assessee has denied the liability to be assessed to pay interest under section 14 of the Expenditure Tax Act under the facts and in the circumstances of the case. Charging of interest under section 14 is an automatic statutory provision because of not making the payment of expenditure-tax collected within time to the government.
9. From the above narrated averments from the grounds of appeal it would become quite clear that according to the assessee firstly it is not liable to pay expenditure-tax; secondly if it is held it is liable to pay such tax then, it should not be levied on other charges or on the discounts given to the customers and other services rendered to them. Thirdly, it would become clear that certain receipts from restaurants, conference halls, bar, etc., should not be taken into account and those receipts should be reduced from the total charges to bring it below the limit of taxing expenditure-tax. Fourthly, even if the assessee has not paid the expenditure-tax collected by it to the government for that purpose the interest should not be levied under section 14 of the Expenditure Tax Act. The assessee has raised a point that the expenditure relates to different portions of Hotel Atria pertaining to (1) tijouri, (ii) silkwinds, (iii) coffee shop or 1498AD; (iv) trade routes (bar); (v) conference halls such as chancery, committee, conclave, chambers, cabinet and council, and (vi) Hotel Atria rooms.
10. The assessee is a company incorporated on 10-12-1984, to carry on the business of hotels, restaurants, conference hall, bar, etc. The assessee constructed a composite building in which the conference halls, restaurants, bars and hotel rooms have been established. The restaurant Tijouri portion was started during the financial year 1993-94. It is located in the cellar portion of the composite building. According to the assessee there is a separate kitchen to provide north Indian food to the customers in this restaurant. The foods prepared in other restaurants are not serviced in this restaurant and separate bills are issued in the name of the restaurant itself for the restaurant business. This expenditure is furnished to claim that this restaurant is separate from the other restaurants. According to the assessee silkwinds was started in July, 1994, in the ground floor portion of the composite building. According to the assessee there is a separate kitchen and Chinese food is prepared and supplied to the customers in this restaurant. The foods prepared in other restaurants are not served at all in this restaurant. Separate bills are issued in the name of this restaurant business. The assessee again claims that this restaurant is a separate one than other restaurants and, therefore, the bills issued by the restaurants should not be included in the customers total receipts.
11. According to the assessee coffee shop or 1498 AD was started in the financial year 1993-94 in the cellar portion of the composite building. There is a separate kitchen to prepare and provide Andhra style food, general and continental food for the sale to the customers in the restaurant. The foods prepared in the other restaurants are not served at all. Separate bill are issued in the name of this restaurant itself for the restaurant business. This restaurant is also separate from the other restaurants. According to the assessee, trade routes (bar) was started in October, 1996 in the ground floor of the composite building. There is no separate kitchen as no food is served. The foods prepared in other restaurants are sometimes served at the specific request of the customers. Snacks, which are purchased like chips, peanuts, etc., are sold to the customers against payment. Separate bills of the bar are issued and the assessee claims this a separate business from other business.
12. According to the assessee, conference halls (chancery, committee, conclave, chambers, cabinet and council) are in the cellar portion of the composite building. Food is served by various restaurants depending upon the type of food ordered by the customers in these conference halls.
13. According to the assessee hotel rooms are provided for the purposes of residential accommodation in several units or suites. This activity is considered as part of the business. The rooms or suites are situated on the first floor, second floor, third floor, fourth floor and other floors in the composite building. There are independent rooms totalling to about 116 in number and 7 suites. According to the assessee each room and suite is an independent residential accommodation as each room has its own toilet, bathroom, TV, fan, double cots, fridge and necessary furniture, etc. There are separate numbers for identification of each one of the rooms. However, the rooms are connected with common passage and common electrical and air-conditioner lines. But they are independent units. They are used and exploited independently and each room being part of the composite building by itself is a hotel. According to the assessee this situation has to be considered as a hotel within the meaning of section 2(5) of the Expenditure Tax Act and not all the rooms taken together as a hotel, It was explained that hotel is not an assembly of independent rooms. Every independent room is a hotel within the meaning of section 2(5) of the Expenditure Tax Act. According to the assessee this is only a hotel, defined as a portion of building, a restaurant is defined as only premises and not portion of the building. The construction of the term "hotel" should be atomic in respect to each unit and should not be viewed linear or horizontal or molecular taking all these units together to be considered as a hotel". There is also a separate kitchen in the basement where food is prepared to be given to the customers on complimentary basis and this is not charged separately. The kitchen attached to the hotel rooms is different and distinct from the other kitchen attached to various other restaurants. The assessee derives income from the restaurants, bar, conference halls and the hotel rooms and these incomes are taken and consolidated as gross income in the books and in the profit and loss account. Each of the restaurants gives separate bills of their own to the customers.
14. The hotel business was started in January, 1994. Prior to the starting of hotel business, some of the restaurant businesses were started during the previous year relevant to the assessment year 1994-95 and the assessee was deriving the income therefrom. According to the assessee, the assessing officer took the entire income shown in the profit and loss account as liable to expenditure-tax in the hands of the assessee for the reasons mentioned in the order. Accordingly, the assessing officer levied the expenditure-tax on the assessee. The assessee is one owner for all the units in the composite hotel building. It was submitted that the definition of hotel is not inclusive definition as a building or part of the building where residential accommodation by way of business is provided for monetary consideration as per section 2(6) of the Expenditure Tax Act. It would be incorrect to imagine that the customers who visit and stay in the rooms owned by the assessee would like to stay without any privacy and independent portion of premises. So having provided certain amenities in the rooms like bath room, furniture, double cots, etc., does not mean that the assessee is not a owner of the entire composite building but he is the owner of certain rooms only. This contention would be contradictory in itself first to say that the assessee is the owner of the entire composite building; again there are separate portions of premises like rooms, suites, restaurants, etc. The hotel contains all the portions such as rooms, kitchens, restaurants, bar and conference halls, etc. It would be incorrect to imagine restaurants are not provided in the independent rooms. Nowhere such a situation is found of providing restaurants in the independent rooms for accommodation. Therefore, there is nothing much in saying that restaurants are not provided in the hotel rooms area. The conference hall, kitchens, and bar have to the separate from the hotel, rooms area. Otherwise the assessee cannot carry on hotel business as a businessman.
15. It may be true that the assessee runs the restaurant separately, which may be serving foods in the restaurants to the customers who do not stay by taking rooms in the hotel. Howmany times in a week or a month complementary food has been provided is not brought on record. No composite tariff is provided does not mean that the assessee did not collect for providing foods, drinks, etc., from the customers. The assessee cannot claim an altogether separate status than other posh hotels in India, wherein the expenditure tax is collected and paid to the government. The assessee cannot consider itself as an exception to the general rule. It is not in dispute that the charge is on the chargeable expenditure as defined under section 5 of the Expenditure Tax Act. It is true that the occasion or the point at which charge is directed at the time of incurring such expenditure in any of the units of residential accommodation, the charge is also linked to room charges per day per individual. Therefore, charge attracts for every unit of residential accommodation at the time of incurring such expenditure. A stress is given on the word individual. The word individual gives the meaning of only one person. If that is so, the assessee does not claim that in every room or suite only one cot is provided. It is the assessees case that in room or suite double cots are provided or even in some of the suites more than two cots are provided. That means, a customer with his family or children can come and stay in the rooms and the bill has to be prepared only in the name of one individual. This does not mean a bill has to be prepared separately in the name of husband, wife and children. Stressing on the word individual does not give any benefit to the assessee. Moreover, when two or three cots are provided in a room and given to a customer including his family members the bill need not be prepared separately for each of the family member. Giving room to customer means giving the entire room including two or three cots to a customer against fixed charges. Hence, claiming room charges per individual does not become a correct proposition to deny the liability to pay expenditure-tax. Charging of tariff has to be considered from room to room and not from individual to individual. It was submitted on behalf of the assessee that the word any has to be differently construed in different manner as per sections 3 and 5 of the Expenditure Tax Act. If the applicability is construed by considering each room as a hotel and applicability is tested on the anvil of the tariff at the time of incurring the expenditure, the section becomes workable, meaningful and not defeating the legislative intent according to the harmonious interpretation of the statutes. The assessing officer has worked and in accordance with the provisions of law. His working is not against the provisions of section 3 and 5 of the Expenditure Tax Act. He has given a correct meaning in accordance with the legislative intention. Therefore, twisting his action in different manner only to enable the assessee to have benefit does not mean the assessing officer and the first appellate authority have not applied their minds for not understanding the law correctly and the action taken by them is neither meaningless or incorrect.
16. The contraction of posh hotel includes providing rooms for different customers against the payment along with the facilities like provision of restaurants, kitchens, bars, conference halls, etc. Otherwise it would be meaningless to say a certain hotel is a posh or good hotel without all these provisions and necessities. The assessee has tried its level best to separate the residential room from other portions of the hotel. It is needless to say and accept that independent rooms are not independent hotels by themselves.
Additional Grounds:
17. The assessee raised the additional ground that each room being a part of the composite building by itself constitute a hotel and applicability of the Expenditure Tax Act should be on the basis of tariff of each room at the time of incurring the expenditure and not on the basis of general tariff of one or two rooms or suites provided in residential accommodation in the entire building considering it as a hotel. According to the assessee, the department should have construed the term (hotel) in atomic sense and not in a linear or vertical or molecular sense for the applicability of the charge and consequently, the order of assessment framed is required to be annulled. In ground No. 2 the assessee have averred that the assessing officer failed to appreciate that every room by itself constitutes an independent and separate unit of a portion of the building providing residential accommodation for consideration as part of business and every such room should be considered as a hotel and not the assembly of all such rooms. In additional ground No. 3 the assessee averred that the assessing officer should have the chargeability of the chargeable expenditure vis-a-vis the room revenue of each unit at the time of incurring the expenditure and not all such units together which is in gross violation of the provisions of the Act. In ground No. 4 of the additional grounds the assessee has averred that the assessing officer failed to appreciate that the amounts are billed for the occupants jointly and they are collected in their joint names and they are billed room-wise and each room is numbered to retain its identity and each unit or room is capable of being exploited for providing residential accommodation for consideration as part of business and facilities are equipped for such accommodation separately although they are connected by common passage and central air-conditioning and lighting. The facilities like telephone, etc., provided in the room are separately metered and charged and, therefore, for attracting the levy the authorities below ought to have taken into consideration the room tariff collected at the time of expenditure on room to room basis and on occasion to occasion basis and not in a total manner.
18. Sections 2 and 5 of the Expenditure Tax Act have to be interpreted independently to arrive to a harmonious construction of the legislative intention. The interpretation should be straightforward and meaningful. The interpretation need not be twisted either to take benefit or to give benefit. Therefore, the arguments advanced by the assessee cannot be accepted to treat that every room is a separate hotel. As already discussed the assessee-company is a trustee or agent of the government in collecting the tax. Having discharged such function of collecting the tax from the customers, the assessee cannot now start interpreting the Expenditure Tax Act, twist it and contend that applicability of Expenditure Tax Act is not properly done. Having charged a tariff of Rs. 1,500 to 1,950 per day the assessee-company is bound to get attracted by the Expenditure Tax Act, and supposed to collect and pay the due expenditure-tax to the government.
19. As against the above-mentioned contentions and arguments of the assessee, the learned Departmental Representative proceeded to argue and submitted that an action under section 132 was resorted in the premises of the assessee on 22-7-1998, having found that the assessee was liable for expenditure-tax and did not file the returns of expenditure-tax. The department issued another letter, dated 11-8-1998, calling upon the assessee to file returns of expenditure-tax because the assessee collected expenditure-tax from customers for over number of years and liable to file the expenditure-tax returns for the assessment years 1994-95 to 1998~99. The assessee did not file the returns of expenditure-tax separately by responding to the notices issued by the assessing officer. The assessing officer issued a third notice dated 12-1-1999, for the same purpose. The assessee filed two letters dated 21-1-1999 and 29-1-1999, asking for some time to file the returns. Ultimately the assessee filed the return on 10-2-1999 and declared expenditure-tax as nil for all the assessment years as referred to above.
20. The assessing officer issued notice under section 9(1) of the Expenditure Tax Act and passed orders under section 9(2) of the said Act for the assessment years 1994-95 to 1998-99 on 15-3-1999. The assessee had come in appeals against the said orders, dated 15-3-1999. The assessee had raised the ground of jurisdiction under section 11 read with section 8 and submitted that these provisions were not applied by the assessing officer. The assessee contended that no valid notice was issued. Both the assessing officer as well as the first appellate authority have rejected this explanation. Both have held the view that assessment of chargeable expenditure escaped assessment and section 11 of the Expenditure Tax Act had to be resorted to. As narrated in the foregoing paras and the assessees contention that according to the assessee only letters were issued without jurisdiction and it as not a notice. This contention requires to be rejected here also as a valid notice under section 8(2) read with section 11 had been issued validly. The assessee was called upon to file the returns of expenditure-tax and the assessee did so by filing nil returns. The Commissioner (Appeals) reproduced the provisions of section 8(3) and it appears necessary to reproduce the same here also which is as follows :
"Any person responsible for collecting the tax who has not furnished the return within the time allowed under sub-section (1) or sub-section (2) or having furnished a return under sub-section (1) or sub-section (2) discovers any omission or wrong statement therein, may furnish a return or a revised return, as the case may be, at any time before the assessment is made."
21. The Commissioner (Appeals) has considered in detail the contentions put forward before him on behalf of the assessee in para 11.2 to come to a conclusion that returns were valid as voluntary returns. He has also considered the provisions of section 13(1) regarding the time-limit for completion of assessments. No order of assessment shall be made under section 9 or 10 at any time after the expiry of 4 years from the end of the assessment year in which the chargeable expenditure was first assessable or one year from the date of the filing of the return or revised return under section 8 whichever is later. He held that as the orders were passed on 17-3-1999, under section 9(2) of the Act, they are well within the time-limit prescribed. He has considered the analogy of issue of notice under section 148 of the Income Tax Act as a condition precedent for exercising the jurisdiction by the assessing officer and it does not confer any right which can be waived by the assessee. He relied on certain decisions in support of this. He held that the said returns of expenditure-tax have to be treated as returns filed under section 11 of the Expenditure Tax Act. He held that the said returns were valid and the assessing officer had jurisdiction to pass the assessment orders. He has also considered whether the assessee was entitled to exemption from the purview of the Expenditure Tax Act as per the first proviso to section 4(a) of Expenditure Tax Act. He has also considered the provisions of section 80-IA(v)(ii) of the Income Tax Act, read with section 80-IA(4)(iii) of the Income Tax Act, which is as follows :
"hotel located in a hilly area or a rural area of a place of pilgrimage of such other place as the Central Government may having regard to the need for the development of infrastructure for tourism in any place and other relevant considerations specify for the purpose of this clause, starts functioning at any time during the period beginning on Ist day of April, 1990 and ending on the 31st day of March, 1994. "
22. From the plain reading of the section it would be incorrect to say that the assessee started any hotel in a hilly area or a place of picnic or tourism. He has also considered the provisions of rule 18BBC. He has held that the onus lies on the assessee to prove its case by producing necessary certificates of claiming exemption from the purview of the Expenditure Tax Act. He held that the assessee did not discharge the necessary onus cast on it. The assessee did not produce any necessary certificate. He has held that a posh hotel in Bangalore cannot fulfil the conditions of rule 18BBC. He has also considered the assessees objection to quantum assessment. He discussed in detail about this in para 21 at pp. 15 and 16 of his order.
23. He considered that the Atria Hotel was started in January, 1994 with 59 double rooms and two suites; the number of double rooms and suites were increased in the course of time. He gave detailed data of increasing the double rooms and suites at p. 16 of his order with the charges. He considered the assessees contention that the double rooms were made for occupation of two persons and the room charges mentioned in section 3 were found by dividing the room tariff per double room by the number of such persons i.e., by two. This analogy to divide the room charges between two persons does not hold good because the payer is one and the contention to divide the room charges between the husband and wife for purposes of expenditure-tax would not be meaningful. The assessing officer gave clear reasons as to why the claim of the assessee to deduct 40 per cent from the room charges for providing breakfast, etc., should be rejected. The assessee was not able to refute the evidence recorded and the arguments of the assessing officer successfully. The assessee claimed to have followed a scheme different from what is followed by all other hotels in India. Having found that the assessee did not discharge the onus, the Commissioner (Appeals) concurred with the finding and action of the assessing officer. He did not accept the condition that the room charges for the double rooms and suites are to be divided by the tariff by the number, of occupants permitted to occupy the same. He also did not accept the contention of the assessee that the number of rooms in a suite were more than one and the number of permitted occupants in the suites were more than one.
24. He relied in support of this finding on the decision of High Court of Himachal Pradesh in the case of H.P. Tourism Development Corporation v. Union of India (supra). He did not find any difference between the stand taken by the assessee and the appellant herein. He has reproduced the finding of the court at p. 19 of his order being para Nos. 15 and 27. He did not accept the contention to divide the tariff between two persons occupying a double room and between two persons occupying a suite. He held that each double room and suite has to be taken as a unit for calculating the expenditure-tax as per section 3 read with rule 5 relying on the decision of the Himachal Pradesh High Court.
25. The Commissioner (Appeals) reproduced the tariff under para 30 at p. 20 of his order. He made calculation for the assessment year 1994-95 and found that only for two suites were there above the limit of Rs. 1,200. He considered the provisions of section 3(1) of the Expenditure Tax Act and considered that the room charges for any single unit in the hotel above Rs. 1,200 per day fulfilled the criterion of room charges for any unit of residential accommodation, above Rs. 1,200 as per the Expenditure Tax Act. The Commissioner (Appeals) has highlighted that the assessee itself had collected 20 per cent of the bill amounts towards tax from all customers and remitted part of the same towards expenditure-tax.
26. The assessees stand in this respect was the word any means all and even if any one of many rooms had room charges below the specified limit of Rs. 1,200 per day expenditure-tax would not be attracted. The Commissioner (Appeals) again reproduced the observations of the High Court of Himachal Pradesh under para 33 at pp. 22 to 25 of his order. To take support from the decision of the High Court he held that the facts of the assessees case are quite similar to that of the hotel run by the Himachal Pradesh Tourism Development Corporation. He found that the basic difference in the case of the assessee that there are no janata rooms or room with rent of the order of Rs. 50 to Rs. 100, etc., unlike the other case. From table at para 30 and also para 22, he noticed that the lease room charges in any part of the portion of the assessee-hotel was Rs. 720 and in rare cases where a single person occupies double room. He noticed that from October, 1994, relevant for the assessment year 1995-96 the room charges for double rooms are normally Rs. 1,305 which is above the threshold limit of Rs. 1,200. Since the cases of single occupancy of double rooms are relatively few he held that the assessee does not have a case of janata services provided. The majority of boarders cannot be the ordinary "janata type" incurring only janata type expenditure in the hotel. He considered that their expenditure must be commensurate and of the ostentatious type. In the circumstances, he held that it may not be correct to treat the expenditure in the hotel as predominantly of ordinary type, except in the case of occupants of suites. He found this as the factual difference between the hotels of Himachal Pradesh and the assessee. Due to this material difference he held that room charges in majority units were more than the threshold limit of Rs. 1,200 per unit and there was a case for treating all the expenditure incurred in the hotel as such and falling within the purview of section 5 of the Expenditure Tax Act. He considered this because the wording of section 3 gives clear scope to think that it is the chargeable expenditure incurred in a hotel fulfilling the conditions that are liable to expenditure-tax and when the majority of the hirers of room pays room charges above the specified limit, the hotel which caters mainly to their needs must be having the level of the expenditure corresponding to the needs of these ostentatious spenders. Considering the table of room charges mentioned by him at para 30 of his order, he held that for the assessment year 1994-95 the room charges for the suites alone exceeded the threshold limit of Rs. 1,200. The room charges for other units were much above that for janata type rooms of the comparative cases. Still, the Commissioner (Appeals) took a lenient view in the matter and held that the decision of the Himachal Pradesh High Court can apply to the facts of the present case. Accordingly to him only the expenses incurred by those who hired the suites need be considered to fall within the purview of Expenditure Tax Act. Since the break-up of such expenditure was not readily available, he directed the assessing officer to calculate the same on a pro rata basis as that fraction of the total expenditure incurred in the hotel as the total number of occupants of the suites bears to the total number of occupants of the double rooms and suites during the relevant period. Therefore, for the assessment year 1995-96 for the period up to September, 1994, he directed to work out the expenditure on pro rata basis. For the period from October, 1994 to 31-3-1995, the position was that the room charges for double rooms was above Rs. 1,200. He held that barring exceptions majority of the cases including the hirers of suites, the room charges were above Rs. 1,200. Therefore, he held that from 1-10-1994, onwards the expenses in the hotel as such attracted expenditure-tax and the case would be for charging the same to tax. He directed this subject to the assessee proving by adducing the details and evidence within four week of the receipt of his order that the room charges for double rooms charge on single occupancy rate constituted majority of the collections in number during the relevant period. In such a case, he directed the assessing officer to bring to tax only the expenditure attributed to the occupation of the suites and double rooms on non-single occupancy worked out on a pro rata basis for this period.
27. For the first half of the previous year relevant to the assessment year 1996-97 the tariffs were the same as for the second half of the previous year relevant to assessment year 1995-96 and, therefore, made his findings applicable to the said period. For the second half of the previous year relevant to the assessment year 1996-97, all the rooms and suites have room charges above the threshold limit of Rs. 1,200 and, therefore, he held that the case was clearly for bringing all the expenditure to tax for the period. He further held that the observation for the second half of the previous year relevant to the assessment year 1996-97 should apply equally for the assessment year 1997-98, the first half of the previous year relevant to the assessment year 1997-98 and with greater force for the second half of the previous year relevant to the assessment year 1998-99. Thus, he partly allowed the appeals of the assessee for the assessment years 1994-95 and 1995-96. He held that the expenditure-tax for the assessment year 1996-97 required recomputation as mentioned in para 35.3 of his order on assessees submitting necessary details and bringing a case for recompilation in accordance with the directions given in para 35.3 of his order. Thus he dismissed the assessees appeal for the assessment years 1997-98 and 1998-99.
28. The learned Departmental Representative argued that the assessee collected expenditure-tax and paid it to some extent into the government account. According to him the submissions made on behalf of the assessee are contrary and they have no basis and they are an afterthought contentions. He has also brought to the notice of the Tribunal of appellants filing a writ petition bearing Nos. 12596 and 13393 of 2000. The Honble Karnataka High Court disposed of those petitions and held that thinking of the Tribunal to the effect that the assessee though had been collecting expenditure-tax from its customers but had not been paying the same to the government is contrary to the factual situation of the case. The department has approached the High Court to review this part of the order and the same was allowed by the High Court making it clear that the issue relating to collection of tax by the assessee is not to be considered as conclusively decided by this High Court in the order dated 18-1-2000, in Writ Petition Nos. 12596/2000, 13390 to 13393/2000 as evident from the paper book filed by the department. The assessee had made much out of this observation of the High Court. The assessee cannot escape from the fact that it collected the expenditure-tax as an agent to the Government of India and paid it to some extent. If the assessee would not have collected the expenditure-tax from the customers, it would have been better for it to contend that it was not liable to pay expenditure-tax. This fact cannot be ignored or discarded.
29. Search operations were conducted on the premises of the assessee on 22-7-1998, by the Investigation Wing of Bangalore Directorate of Investment. It was noticed during the search that the assessee collected expenditure-tax from its customers and did not file the expenditure-tax returns. The assessee was requested to file the expenditure-tax returns for the assessment years 1994-95 to 1998-99 in spite of expiry of the dates of filing the returns of expenditure -tax. Assessing officer rightly believed that the expenditure chargeable to tax has escaped assessment as per the provisions of section 11 of the Expenditure Tax Act for the assessment years 1994-95 to 1998-99. The assessee collecting expenditure-tax from the customers for over a number of years and became liable to file the expenditure-tax returns. The assessee received the notices. The assessing officers gathering of information of collecting expenditure-tax by the assessee from the customers stood to be correct. A show-cause notice was given. Further time was given to file the returns of expenditure-tax. The assessee in specified terms wrote to the assessing officer of having received notice on 14-1-1999 and made submissions as follows :
"Due to numerous public holidays, when our Auditors offices were closed and also due to the pressure of business, because of which I had to be out of station most of the time in the past week, I could not comply with the requirements contained in the above referred letter. Therefore, I hereby request your honour to grant me time till the end of this month (31st January 1999) to comply with your honours above referred notice/letter and for which act of kindness of your honour, I will be always grateful to your honour. "
30. The time was allowed till 31-3-1999, to file the expenditure-tax returns. From this is would be clear that there is no substance in the assessees contention of not receiving the valid notice. A prosecution proceeding under section 25 of the Expenditure Tax Act was tried to be initiated against the assessee. It appears just and proper to reproduce the assessees reply to the show-cause notice of prosecution proceedings hereunder :
"We have for acknowledgment your honours letter, dated 22-1-1999, granting us time till 31-1-1999, to comply with your honours notice, dated 12-1-1999. However, due to circumstances discussed hereunder, we will not be able to comply with your honours notice by 31-1-1999 and beg to submit as under :
Our managing director, Mr. A.S. Chinnaswamy Raju is away at New Delhi to attend an important meeting of Builders Association of India of which he was the President till very recently, which is going to be inaugurated by the Honble Prime Minister. His stay there may be extended for quite sometime. Also in the last week he was away at Hyderabad on some urgent business matter. Further our auditor is very busy in the Kar Vivadh Samadhan Scheme which is closing on 31-1-1999. In the available time, when our Managing Director was at Bangalore he was not liable to discuss the subject-matter contained in your honours notice dated 12-1-1999, as our auditor was very busy in the Kar Vivad Samadhan Scheme.
In the light of the above circumstances your honour is kindly requested to grant us time till any time after 15-2-1999, to reply and comply with your honours notice dated 12-1-1999, and for this act of kindness of your honour we will be highly grateful to your honour. Inconvenience caused to your honour is very much regretted. "
31. From these letters and replies the assessee remained non-committal to take benefit in future either of denying the liability or of not paying the further expenditure-tax. The audit finding is as follows :
"Audit finding : The computation of "chargeable expenditure" and the expenditure-tax liability thereon under the Expenditure Tax Act, 1998, for the previous year ended 31st March, 1996 at the year lend has not been done as the client is of the view that the provisions of Expenditure Tax Act, 1987, are not applicable to the said company having regard to the fact that the room charges per unit of residential accommodation per individual per day is less than Rs. 1,200 and thereby the provisions of section 3(1) make the levy of expenditure-tax inapplicable to the company. However, certain amounts have been paid towards expenditure-tax. These amounts have been paid as a matter of abundant precaution at our advice and at our insistence pending receipt of legal opinion on the matter. Pending a final decision to be taken by the management in this regard, the amounts paid have been accounted as expenditure-tax liability and provision has been made for the March, 1996 liability (Rs. 4,91,743) as the same was paid during April, 1996. It may also be noted that for our purpose, should the expenditure-tax liability arise for any reason, we were trying to quantify the expenditure-tax liability which we were unable to do so. The exact liability towards expenditure-tax payable as at 31st March, 1996, had to be substantially reconstructed as a consequence of the complete malfunctioning/breakdown of the computer system and the installed computer program. Further several of the bills, vouchers were badly damaged on account of seepage of water in the underground basement area wherein the said hills vouchers/books records were stored".
32. Ultimately the returns declaring nil as chargeable expenditure were filed on 12-2-1999, with a nomenclature on the top of the return of expenditure. However, the returns were filed under the stated protest in pursuance of notice under the Expenditure Tax Act. Several details were furnished. The assessing officer asked the assessee to furnish the details as under :
"Apart from above, in connection with your claim in the return of expenditure-tax, you may produce any documents or other material, which you feel may prove your claims submissions in the returns latest by 16-2-1999 at 11. 00 A.M. Your failure to file the details by that date shall mean that you do not have any details to produce and the assessment shall be completed on the basis of the information available in the possession of the undersigned."
33. Thus, the assessee furnished several details on 24-2-1999, and thereafter, section 11 is self-speaking and it is regarding expenditure-tax dealings chargeable to tax escaping assessment. The said provision is quite clear and it does not require to reproduce the same here. The contention that the Bangalore is a hilly area eligible for deduction under section 80-IA of the Income Tax Act is not acceptable at all because Bangalore is not constituted at a height of more than 1,000 mts., making it eligible for deduction under that section. The Survey of India gave the height of Bangalore city railway station at 902 mts. and Bangalore airport 898 mts. Thus Bangalore does not qualify for deduction as hilly area. We also find force in the alternative plea of the department that merely a location of a hotel in a hilly area is not material to claim exemption under the Expenditure Tax Act, but in addition to the location, the hotel has to be approved by the Central Government as provided in rule 18BBC of the Income Tax Rules for claiming the said exemption. The assessee-hotel does not satisfy these conditions.
34. To counter the arguments of the learned Representative, the learned Departmental Representative pointed out the provisions of section 139(8) of the Income Tax Act and effectively rebutted the same. While relying the provisions of section 292 of the Income Tax Act he cited the decision of the Calcutta High Court in Jawala Prasad Chobey v. CIT (1935) 3 ITR 295 (Cal). He submitted that the assessment order contains intrinsic evidence to that effect as also of repeated intimation having been given to the assessee and having received no reply from the legal heirs and representatives the validity cannot be challenged. He has cited the judgment of the Supreme Court in the case Estate of Late Rangalal Jajodia v. CIT (1971) 79 ITR 505 (SC). He has further relied on the judgments in CIT v. Suraj Bhan & Co. (1983) 144 ITR 943 (P&H) and R.S. Bhandari v. Income Tax Deptt. & Ors. (1995) 214 ITR 735 (Raj), Chattu Ram & Ors. v. CIT (1947) 15 ITR 302 (FC) and Maharaja of Patiala v. CIT (1943) 11 ITR 202 (Bom). He has further relied on the decision of the Supreme Court in Guduthur Bros. v. Income Tax Officer (1960) 40 ITR 298 (SC) and in C.G.G. Paniker v. CIT (1999) 237 ITR 443 (Ker) and Delhi High Court decision in Vijay Sarin v. ITO (1993) 202 ITR 249 (Del). According to him the only requirement in law in initiating the proceedings under section 148 is that there must be reasons to justify the belief that there is escapement of income or suppression of income. The requirement is only so far and no further, and the requirements of quasi judicial determination do not govern the proceedings at the stage of issuing a notice, as per the judgment of Kerala High Court in Dr. V. Mohan Das v. Dy. CIT (1991) 188 ITR 727 (Ker) at p. 729. The exercise of a power by an authority is referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it would be nugatory as per the decisions in CIT v. Gulab Rai Govind Prasad (1972) 85 ITR 308 (All) and Rajender Nath v. CIT (1979) 120 ITR 14 (SC). He has also relied on the decisions reported in 101 STC 94 at P. 95 and ITO v. Biju Patnaik (1991) 188 ITR 247 (SC) at p. 251 to the effect that the requisite conditions can be substantiated even from the recorded reasons and that the validity of a reassessment notice under section 148 can be sustained on the basis of recorded reasons even when notice has not ex facie disclosed or established due application of mind. He has also submitted that even if the reassessment notice revealed no satisfaction, yet it can be sustained if the record disclosed it as per the decision in Hotel Ashoka & Anr v. Union of India & Anr (1997) 226 ITR 388 (MP) at p. 391. He has further cited the decision in the case of IAC v. IBM World Trade Corporation (1995) 216 ITR 811 (Bom) and the decision of the Calcutta High Court in the case of CIT v. Chandball Rice Mills (P) Ltd. (1993) 203 ITR 368 (Cal) to the effect that only the reasons recorded under section 148(2) can be looked at for sustaining or setting aside a notice issued under section 148. He has also contended that the proceedings under section 147 actually commences as quasi judicial proceedings after the return is filed by the assessee. It is at that stage that the disclosure of materials should be made to give the assessee proper opportunity as decided in the case Thanthi Trust v. ITO (1973) 91 ITR 261 (Mad) and in the case of British Electrical & Pumps (P) Ltd. v. ITO (1978) 113 ITR 143 (Cal). He has also pointed out to the order of the Commissioner (Appeals) to pp 7, 8, 9, 10 and 11 appearing in paras 2,3,4,5 and 6 regarding the provisions of section 8(3) which are as under :
"Any person responsible for collection tax who has not furnished the return within the time allowed under sub-section (1) and sub-section (2) or having furnished a return under sub-section (1) and sub-section (2) discovers any omission or wrong statement therein, may furnish a return or a revised return as the case may be at any time before the assessment is made."
35. He has relied on the letter, dated 24-7-2000, by the assessees Chartered Accountant showing the accounting entries as on 31-3-1995, etc. The learned Departmental Representative also tired to narrate the historical background of the assessee. In the light of the suggestion made by Dr. Kaldor in his "Indian Tax Reform" the government introduced a tax on expenditure through the Expenditure Tax Act, 1957 (29 of 1957), for and from financial year 1958-59. By section 13 of the Finance (No. 2) Act, 1962 (20 of 1962), it was provided that notwithstanding anything contained in the Expenditure Tax Act, 1957 (29 of 1957), expenditure-tax shall not be charged for any financial year commencing on or after 1st day of April, 1962. But section 53 of the Finance Act, 1964 (5 of 1964) enacted that notwithstanding anything contained in section 13 of the Finance (No. 20 Act, 1962), expenditure-tax shall be charged under the Expenditure Tax Act, 1957 (29 of 1957), for every financial year commencing on or after 1-4-1996. However, the Expenditure Tax Act, 1957 (29 of 1957) was repealed with effect from 1-4-1966, by section 40 of the Finance Act, 1966 (13 of 1966). He summed up the levy of expenditure-tax under Expenditure Tax Act, 1957 and submitted that the said Act remained operative for the financial years 1958-59 to 1961-62 and 1964-65 and 1965-66. Under that Act, levy was in respect of the expenditure incurred by any individual or HUF in the relevant previous year. It may be better to mention that as a result of the enactment of the Hotel Receipt Tax Act, 1980 (54 of 1980) the levy of hotel receipts tax was imposed on every person carrying on the business of a hotel situated in India, wherein the room charges for residential accommodation provided to any person any time during the previous year were Rs. 75 or more per day per individual. Such levy was in respect of chargeable receipts accruing or arising or received during the period from 1-2-1981 to 27-2-1982. This levy has been discontinued in consequence of the amendment to section 7(2) of the Act (54 of 1980) by the Finance Act, 1982 (14 of 1982) with effect from 1-4-1982.
36. He has further elaborated his arguments on the basis of introduction of Expenditure Tax Bill, 1987 (Bill No. 90 of 1987) (reported in (1987) 167 ITR (St) 45-57), which was introduced in Lok Sabha. The Statement of Objects and Reasons appended to the bill read as "The bill seeks to impose a tax on expenditure incurred in hotels where the room charges for any unit of residential accommodation are four hundred rupees or more per day per individual. This tax will be levied at the rate of ten per cent of the expenditure incurred in connection with provision of any accommodation, food, drinks and certain other categories of services. This tax will not apply to expenditure incurred in foreign exchange or in the case of a person enjoying diplomatic privileges."
37. Thus, he submitted that it can be seen from the statement of objectives and reason, expenditure-tax is on expenditure incurred in connection with provision of any accommodation, food, drinks and certain other categories of services by customers to be collected by the hotel management and paid to the Central Government. The Hotel Receipts Tax Act, 1980 was imposed on every person carrying on the business of hotel wherein the room charges for residential accommodation provided to any person at any time during the previous year were Rs. 75 or more per day per individual. He defined the word hotel used in sub-section (6) of section 2, which includes a building or part of a building where residential accommodation is by way of business is provided for a monetary consideration. He has pointed out from the Law Lexicon Vol. I compiled and edited by Shri Justice T.P. Mukherjee, formerly Judge of Allahabad High Court and President of the Tribunal, 2nd Edn. 1977 wherein hotel is defined as under :
"HotelIn order to constitute a "hotel" two elements viz. (i) Access thereto by the public or a section thereof, and (ii) supply of articles constituting meals and drinks for a price are necessary (See Bombay District Municpal Act, (1901) section 59(1)(XI)The Club Mahabhaleshwar v. The Municpality of Mahabaleshwar 61 Bom LR 52 : ILR (1959) Bom 829 at 833). "
38. If the meaning of the enactment is plain, effect must be given to such meaning irrespective of consequences, according to the learned Departmental Representative, as decided in the case of Narayanaswami v. Emperor AIR 1939 PC 47. Another decision relied on by the learned Departmental Representative is the decision reported in 1 SCR 896 : AIR 1961 SC 1559 wherein it is held that if the words of a statute are in themselves precise and unambiguous no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such cases best declaring the intention of the legislature. It is an equally well settled principle of construction that where alternative constructions are equally open that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system. In yet another case reported in 4 SCC 22 it is held "Where the legislature clearly declares its intent in the scheme of a language of the statute it is the duty of the court to give full effect to the same without scanning its wisdom or policy and without engrafting, adding or implying anything which is not congenial to or consistent with such express intent of the law giver. More so if the statute is a taxing statute". It was submitted by the learned Departmental Representative that in Shankari Prasad v. Union of India, the question was whether the power of amendment in article 368 of the Constitution includes the power to amend the fundamental rights. It was contended that such an amendment would be violative of article 13(2). It was held "We have here two articles each of which is widely phrased, but conflicts in its operation with the order. Harmonious construction requires that one should be read as controlled and qualified by the other. Having regard to the considerations adverted to above, we are of the opinion that in the context of article 13 "law" must be taken to mean rules or regulations made in the exercise of ordinary legislative power and not amendments to the Constitution made in exercise of constituent power, with the result that article 13(2) does not affect amendments made under article 368". He has relied on the decision reported in (1886) 11 AC 627 : 55 LJPC 69, 55 : LT 446 wherein it is held that "The meaning of section 3 of the Preventive Detention Act, 1950, is quite plain land only desperate hairsplitting can reduce it to an absurdity. Courts should not be astute to defeat the provisions of an Act whose meaning is, on the face of it, reasonably plain. Of course, this does not mean that an Act or any part of it, can be recast. It must be possible to spell the meaning contended for out of the words actually used".
39. Another decision quoted by the learned Departmental Representative is the decision reported in (1962) 2 SCR 295 : AIR 1961 SC 1107, wherein it is held "we should avoid a construction which would reduce the legislature to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result (Maxwell, 10th Edn. p. 7) and that manifest absurdity or futility, palpable injustice or absurd inconvenience or anomaly is to be avoided (Crater, 5th Edn. P. 82). While submitting the meaning of "restaurant" he has submitted that 11 "restaurant" means any premises, not being a restaurant situated in a hotel referred to in clause (1) of section 3, in which the business of sale of food or drink to the public is carried on and such premises at the beginning of any month, are equipped with, or have access or facilities for air-conditioning. He has cited the decision Hotel Mansarovar v. Union of India & Ors. (1995) 213 ITR 668 (AP). So far, as the unit is concerned, he has cited from Concise Oxford Dictionary 1990 Edn. wherein "Unit" is defined 1a an individual thing, person, or group regarded as single and complete, esps, for purposes of calculation; breach of the (smallest separate individuals or groups into which a complex whole may be analysed (the family as the unit of society). 2a. quantity chosen as a standard in terms of which other quantities may be expressed (unit of heat; SI unit; mass per unit volume 3 Brit. The smallest share in a unit trust. 4a. device with a specified function forming part of a complex mechanism. 5a. piece of furniture for fitting with others like it or made of complementary parts. 6a. group with a special function in an organisation. 7a. group of buildings, wards, etc., in a hospital a 8 the number "one" unit cell Crystallog the smallest repeating group of atoms, is, or molecules in a crystal. Unit cost the cost of producing one item of manufacture. Unit-holder Brit. A person with a holding in a unit trust, unit price the price charged for each unit of goods supplied. Unit trust Brit. An investment company investing combined contributions from any persons in various securities and paying them dividends in proportion to their holdings.
40. From the above narrated oral arguments and written submissions on behalf of the department it becomes quite clear that the assessee is under obligation to collect the expenditure-tax from the customers and to pay it to the government. In fact, the assessee did so but after an afterthought the assessee, it appears changed its mind to evade the payment of expenditure-tax by challenging the notice and denying its liability to pay the expenditure-tax. The assessee is at liberty; to raise several contentions small or big to defend itself, but the contentions raised by the assessee are so ticklish or trivial from which the assessee cannot take any benefit like an unjust enrichment.
41. It is not in dispute that the assessee collected the expenditure-tax from its customers. However, after collection of the same when the assessing officer started demanding the assessee, it found several excuses. It is not open to the assessee to say that it will collect the expenditure-tax from its customers but it will not pay to the government. All conditions or norms have been fulfilled for taxing the assessee to expenditure-tax, the tariff of the hotel of the assessee being Rs. 1,200 and above he cannot escape by not paying the expenditure-tax and it is not open to deny the liability on the part of the assessee.
42. We have seriously viewed the arguments advanced on behalf of the assessee and the arguments advanced on behalf of the department. We have gone through the facts as brought on record. We have also perused the contents of the documents furnished. A perusal of these documents, assessment orders, appellate order of the first appellate authorities shows that the Commissioner (Appeals) has already directed to consider the collection of expenditure-tax for the assessment year 1994-95 separately on establishing the claims on certain facts and evidence. He has also given certain directions with regard to the assessment year 1995-96. He has dismissed the appellants appeals for the assessment years 1996-97 to 1998-99. At the cost of repetition, it may be mentioned over here that the sufferer of the expenditure-tax is not the assessee but the person or persons staying in the hotel of the assessee and paying the bill. This gains significance when once they have paid the tax. In other words, the assessee is a mere agent of the government to collect the tax. Had he not collected the tax perhaps he would have some bona fide reason to put forth his submissions but in the present case, just to avoid the expenditure-tax the assessee is coming forward with so many lame excuses. The taxing authorities and the appellate authority have rightly brought it under the tax net and the assessee should not be allowed to escape. In this view of the matter, no interference is called for in the order of the Commissioner (Appeals) and we sustain his orders.
43. In the result, appeals of the assessee are dismissed. In view of our decision in these appeals, the appeals filed by the department have become infructuous and these are also dismissed as such.