TAJ VIEW HOTEL Vs. STATE OF U P

JUDGEMENT

(1.) THE question for consideration in this case is as to whether the interest payable because of late deposit of 'luxury tax' payable by Hotels under the provisions of Uttar Pradesh Taxation and Land Revenue Act 1975 (U.P. Act No.8 of 1975) would start running: (a) from the date on which the said tax is actually collected by the petitioner from the customer, as contended by the petitioners. or (b) from the date on which the liability of the customer for payment arose i.e. the billing dates or the date on which the hotel room was occupied by the customer, as contended by the respondents.

(2.) THE petitioners contend that the liability to pay interest would begin from the date on which the tax is actually realized by the hotel from the customer. In support, reliance has been placed on the use of the words "realized from" in the definition given in Section 3 (f) of the Act, which is reproduced below:

(3.) THUS, because (a) that there would be no liability to pay interest if the tax is paid within the prescribed period; and (b) the interest is payable only on the amount remaining unpaid at the end of the prescribed period; therefore the liability of paying interest would start at the end of the prescribed period and would be confined to the tax remaining unpaid at the end of that period.