COMMISSIONER, FOR COMMERCIAL TAXES, THE JOINT COMMISSIONER (INTELLIGENCE), OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND THE STATE OF KARNATAKA, BY ITS SECRETARY, FINANCE DEPARTMENT AND OTHERS ETC. ETC. Vs. HENNUR BY IT

JUDGEMENT

(1.) THESE batch of writ appeals are preferred by the State, challenging that portion of the learned Single Judge's order interpreting Section 3D of the Kamataka Tax on Luxuries Act, 1979 (for short, hereinafter referred to a 'the Act'), holding that the Section does not stipulate any levy on the mere existence of the facility and the tax is leviable only on the member who utilises the facility available in the club.

(2.) THE Karnataka Legislature, in order to augment the revenue of the State, proposed to levy tax on luxuries provided in hotels and lodging houses and therefore, it enacted Karnataka Tax on Luxuries Act, 1979 which came into force from 31st March, 1979. At the inception, there was no provision for levy and collection of tax on luxuries provided in a club. In fact, as the law stood then, the word 'club' was included in the definition of the word hotel'. It was inserted by Act No. 5/2000 giving retrospective operation. However, the legislature, by way of an amendment to the Act, inserted Section 3D by way of substitution by Act No. 3/2004 and it was declared that it shall be deemed to have been substituted with effect from 01.04.2003. In other words, retrospective effect was not given by the legislature expressly restricting its operation only from 01.04.2003. The constitutional validity of the said provision was challenged by the Respondents herein by filing writ petitions before this Court.

(3.) THE Respondents - clubs have not challenged that portion of the order of the learned Single Judge upholding the constitutional validity of Section 3D of the Act. The order upholding the constitutional validity has attained finality. Therefore, this Court in these appeals is called upon to decide, whether the interpretation placed by the learned Single Judge on Section 3D is correct or not?