(Per Chief Justice) In this petition under Article 226 of the Constitution the petitioner has challenged the assessment order under Expenditure Tax Act, 1987 in respect of the payments made by him to the Hotel Corporation of India Ltd. -respondent No.3 herein under the licence agreement dated 6th March, 1987. Under the said licence agreement the petitioner was conducting the business of beauty parlour and barber saloon in an area admeasuring 740.35 sq. ft. approximately on the ground floor of the said Hotel near Mumbai Air Port. The petitioner had to pay to the respondent a sum of Rs.13,400/- per calender month as and by way of licence fee and further a sum of Rs.8,884/- as and by way of service charges for air conditioning and maintenance of the public area in front of the shop aggregating to Rs.22,284/- per month and also monthly compensation of Rs.1500/- as rent for imported/indigenous beauty parlour/barber saloon equipment, fixtures and fittings in the shop on quarterly basis. The petitioner was also required to pay separately electricity and telephone rental charges to the respondent.

2. The provisions of Section 5 of the Act as applicable at the relevant time read as under:

5. Meaning of chargeable expenditure - For the purposes of this Act, chargebale expenditure means any expenditure incurred in, or payments made to, a hotel to which this Act applies, in connection with the provisions of, (a) any accommodation, residential or otherwise; or (b) food or drink by the hotel, whether at the hotel or outside, or by any other person at the hotel; or (c) any accommodation in such hotel on hire or lease; or (d) any other service at the hotel, either by the hotel or by any other person, by way of beauty parlour, health club, swimming pool or other similar services. (emphasis supplied).

3. The dispute as raised by the petitioner in this petition is that payments for the licence fee made by the petitioner to the hotel for the premises in question could not be subjected to levy of tax under the Act. It is contended that words “any accommodation, residential or otherwise” or the words “any accommodation in such hotel on hire or lease” would not cover the case of accommodation taken on licence basis. The petitioner further contends that the word “hire” would have reference to only movable property and would not include any immovable property taken on licence basis. It is contended that there is well known distinction between “Lease” and “Licence”. Hence, for the accommodation taken by the petitioner on licence basis, no expenditure tax was payable on the licence fee paid by the petitioner to respondent No.3. The learned counsel for the petitioner fairly invited our attention to a decision of the Delhi High Court in the case of R.L.Jain and others Vs. Union of India and others reported in 1989 Tax Law Reports 1063 which is against the petitioner covered by the above decision.

4. Having heard the learned counsel for the parties, we find substance in the submissions made on behalf of the respondent that the payment made by the petitioner in respect of the premises taken on licence basis fall within the provisions of Section 5 (a) and (c) of the Act. In fact, clause (a) and clause (c) overlap and therefore, licence fee in respect of the shop in question would fall under sub clause (a) as well as sub clause (c) of the Act.

5. The expression “any accommodation in such hotel on hire .......” in Section 5(c) of the said Act would include amounts payable under a license/leave and license agreement. This is clear from the use of the term “hire” in respect of “accommodation”. Section 5(c) for the present purpose may be paraphrased thus:-

“5. Meaning of chargeable expenditure. - For the purposes of this Act, chargeable expenditure means any ............................payments made to, a hotel to which this Act applies, in connection with the provision of , -

(a) .....................................................................

b) .