SREE NARAYANA DHARMA SAMAJAM Vs. COMMERCIAL TAX OFFICE

JUDGEMENT

(1.) Penalty imposed under section 17A of the Kerala Tax on Luxuries Act, 1976 (hereinafter referred to as, "the Act"), in respect of the assessment years 2005-06 to 2007-08 as per exhibits P12 to P14 orders, followed by exhibits P15 to P17 demand notices, are under challenge in this writ petition. That apart, the petitioner also seeks to declare section 4(2)(c)(i) of the Act and exhibit P18 circular as ultra vires to the Constitution. The petitioner has got a further case that the petitioner is entitled for the benefit of the proviso to section 4(1) of the above Act. The petitioner is stated as a charitable institution registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955. The petitioner is managing and administering Ayyappankavu temple and runs a Higher Secondary School, another English medium school and is also having an "auditorium", which according to the petitioner is functioning within the premises of the temple. As per section 4(1) of the Act, luxury tax is leviable in respect of any luxury provided in a hotel, house boat, hall, auditorium or kalyanamandapam or places of like nature, which are rented for accommodation for residence or used for conducting functions whether public or private exhibition. However, there is a proviso, which says that the above sub-section shall not apply to halls and "auditorium" located within the premises of places of worship owned by such religious institutions.

(2.) The main case of the petitioner is that the auditorium owned by the petitioner is within the premises of the place of worship and hence there cannot be any instance of luxury tax, in view of the proviso to section 4(1). But without any regard to the said provision, notices were issued to the petitioner proposing penalty for non-registration and payment of tax as prescribed, finally leading to the penalty orders and demand notices, which in turn are under challenge.

(3.) On receipt of exhibit P1 notice, asking the petitioner to produce the accounts to determine the liability towards luxury tax for the different assessment years from 2005-06 to 2008-09, the petitioner filed exhibit P3 reply, pointing out among other things that, by virtue of the proviso to section 4(1), auditorium owned by the petitioner within the premises of place of worship stands exempted from any levy. It is also stated that the rent being collected is well within the statutory limit and only sparingly did it exceed the limit of Rs. 3,000.