HOTEL MANASASAROVAR Vs. UNION OF INDIA

JUDGEMENT

(1.) The constitutionality of the amendments made to sections 2 to 5, 7 and 15 of the Expenditure Tax Act, 1987 (for short, "the Act"), by the Finance (No. 2) Act, 1991, is under challenge in this batch of writ petitions. Except in Writ Petition No. 14175 of 1991, the petitioner in the other writ petitions are hoteliers. In Writ Petition No. 14175 of 1991, the petitioner is a practising advocate. Because of the commonality of questions involved for adjudication, we are inclined to dispose of all the writ petitions by this common judgment.

(2.) The Act of 1987, as it stood prior to the Amendment Act of 1991, was enacted to provide for the levy of a tax on expenditure incurred in certain hotels. Section 3 laid down that the Act shall apply : "(1) In relation to any chargeable expenditure incurred in a hotel wherein, the room charges for any unit of residential accommodation at the time of the incurring of such expenditure are four hundred rupees or more per day per individual. (2) Where a composite charge is payable in respect of residential accommodation and food, the room charges included therein shall be determined in the prescribed manner. (3) ...."

(3.) It was provided by section 4 that the tax was 20 per cent. of the chargeable expenditure. Section 5 contained the meaning of "chargeable expenditure", section 7 provided that in respect of a hotel in relation to which chargeable expenditure was incurred, the hotelier was responsible for collection, section 15 dealt with the penalty for failure to collect or pay the expenditure-tax.