RAMKRISHAN HOTELS PVT LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) BY this petition under Article 226 of the Constitution of India, the petitioner has challenged order dated 17th July, 2000 passed by the first respondent, viz., the State of Gujarat in exercise of powers under section 9(2) of the Gujarat Taxes and Luxuries (Hotels and Lodging Houses) Act, 1977 directing the petitioner to pay Rs.36,035/- towards Luxury Tax, Rs.36,035/- towards fine and Rs.4,000/- for compounding the offence, totalling to Rs.76,070/- as well as the order dated 1st January, 2000 passed by the second respondent, that is, the Deputy Commissioner (Tax on Luxuries), State of Gujarat, Gandhinagar.

(2.) THE petitioner, a private limited Company, is running a hotel popularly known as 'Hotel Panchsheel' at Baroda. By a show-cause notice dated 27th August, 1999 issued by the second respondent, the petitioner was called upon to show cause as to why tax to the tune of Rs.86,484/- should not be recovered for the grounds (in all eight in number), stated in the said show-cause notice. In response to the show-cause notice, the petitioner filed its reply dealing with each of the grounds. THE second respondent by an order dated 1st January, 2000, dealt with each of the grounds separately and accepted the explanation of the petitioner in respect of the first four grounds and as well as the eighth ground. However, in relation to the fifth, sixth and seventh grounds, the second respondent did not accept the same. As per the fifth ground the bills in respect of rooms No.107 and 310 indicated that tariff had been charged at the rate of Rs.400/- which was not in consonance with the Room Tariff Form No.2. THE explanation tendered by the petitioner was to the effect that the rooms had been given on discounted rates and that as per the Act of 1966, Luxury Tax was to be paid on the amount actually recovered and as such, there was no intention to evade payment of taxes. THE second respondent found that the room tariff as per the Form No.2 was Rs.700/-, however, with the intention to evade payment of tax, tariff had been charged at Rs.400/- and that the bills did not indicate that any discount had been granted. He, therefore, did not accept the explanation. THE sixth ground was that on the date of search, it was found that the bills opened in respect of rooms No.109, 202 and 204 allotted to tourists showed that tariff had been charged at a higher rate than prescribed under Form No.2 and as such the same was not in consonance with Form No.2. THE explanation tendered by the petitioner was that the employee at the reception was a new person and had recovered the tariff at a higher rate and that tax had accordingly been paid on the said amount. THE second respondent held that as per rule 2 of the Rules, in case there was any increase or decrease in the tariff, it was necessary to inform the concerned officer. That the Management of the hotel had, in relation to ground no.5, charged lower rate of tariff and tried to conceal tax and that in respect of the present ground, tariff had been charged at a higher rate than allowed under Form No.2 and as such, had tried to evade payment of tax. That it was only upon the discrepancy being noticed that they had paid tax on the amount of tariff shown in the bill. He, therefore, did not accept the explanation of the petitioner. In relation to the seventh ground, it was found that in June, 1999, on random checking, in case of several bills, discount had not been shown. THE explanation tendered by the petitioner was that tariff had been charged in accordance with the provisions of law and that they had paid the tax on the amount of tariff charged by them. That through oversight, the discount was not shown in the bills which was a technical error. THE second respondent found that in some cases, the petitioner had charged higher tariff rate and in some cases at a lower tariff rate and that in most cases the tariff had been charged at Rs.400/- and has tried to evade payment of tax. He, therefore, did not accept the said explanation. On the basis of the aforesaid findings recorded by him, the second respondent assessed the tax at Rs.86,484/- and imposed one and a half times the penalty thereon which came to Rs.1,29,726/- and also imposed compounding charges of Rs.10,000/- under section 15(1) of the Act. Being aggrieved, the petitioner challenged the aforesaid order dated 1st January, 2000 before the first respondent by way of appeal. THE first respondent, by the impugned order, has concurred with the findings recorded by the second respondent. However, in the facts and circumstances of the case, the first respondent took note of the fact that the hotel management was regularly maintaining Form No.3 and had also deposited the amount of tax. He, therefore, modified the order passed by the second respondent and assessed the tax for a period of five months instead of twelve months as computed by the second respondent and accordingly assessed the tax payable at Rs.36,035/-; reduced the penalty amount under section 7 of the Act to Rs.36,035/-; and compounding charges to Rs.4,000/-. Accordingly, the amount payable by the petitioner under the order passed by the second respondent was reduced from Rs.2,26,210/- to Rs.76,070/-.

(3.) FROM the facts noted hereinabove, it is apparent that in the light of the discrepancies noted by the second respondent, a show-cause notice came to be issued to the petitioner which culminated into the order dated 1st January, 2000 whereby the second respondent upon appreciation of the evidence on record came to the conclusion that the fifth, sixth and seventh charges had been proved against the petitioner and did not accept the explanation given by the petitioner qua the said charges. In the petitioners? appeal before the first respondent, the first respondent has concurred with the findings of fact recorded by the second respondent. He, however, considering the facts and circumstances of the case as well as the conduct of the petitioner, viz., regularly maintaining Form No.3 and depositing the amount of tax, has reduced the assessed amount as well as the amount of penalty and compounding charges. Thus, both the authorities below have upon appreciating the evidence on record come to the conclusion that the fifth, sixth and seventh charges have been proved against the petitioner. In appeal by the petitioners, the first respondent has adopted a reasonable approach and has reduced the assessed amount as well as amount of penalty and compounding charges. In the circumstances, the conclusion arrived at by the first respondent being based on concurrent findings of fact recorded by both the authorities below after appreciation of the evidence on record, does not warrant any interference by this Court in exercise of powers under Article 226 of the Constitution of India.