Ramachandran Nair, J.

1. This WP(C) filed challenging the constitutional validity of levy of luxury tax on Cable TV Operators with effect from 01/04/2006 was dismissed by this Court along with a few other cases upholding the amendment made to the Kerala Tax on Luxuries Act, 1976 (hereinafter referred to as the Act for short). However, on appeal filed before the Honourable Supreme Court, the Supreme Court remanded the case vide judgment dated 03/02/2011 giving freedom to the petitioners to amend the WP(C) raising additional grounds in addition to those raised in the WP(C). Based on direction of the Supreme Court, the petitioners were allowed to amend the WP(C) and on the amended WP(C) the respondents took notice and filed counter affidavit.

2. We have heard learned Senior counsel Shri. Dushyant Dave along with learned counsel Shri. Saji Varghese appearing for the petitioners and also learned Advocate General Shri. K.P. Dandapani along with learned Special Government Pleader (Taxes) Shri.Sojan James appearing for the respondents. Both sides have also filed written argument notes, which also we have perused.

3. The Act was amended by Finance Act, 2006 introducing luxury tax on cable TV operators @ Rs.5/- per connection to be collected and remitted from every subscriber of cable TV. The amendment made with effect from 01/07/2006 was challenged before this Court mainly on the ground that service provided by the cable TV operators do not amount to "luxury" within the meaning of Entry 62 of IInd List of the VIIth Schedule to the Constitution as well as the definition of that term contained in the Act. Another ground raised was that the provisions are discriminatory and violative of Article 14 of the Constitution of India in as much as Direct- to-Home operators providing same service to consumers were not subjected to luxury tax. This Court however rejected the contentions by holding that cinema and various entertainment programmes provided to subscribers by cable operators answer the description of "luxury" under the Act, and the levy is in fact on subscribers and petitioners are only required to collect and remit the tax. The judgment was challenged in appeal and during the pendency of the Appeals in the Supreme Court, the Government retrospectively amended the Act by exempting from liability those cable TV operators who had less than 7500 connections given to subscribers. This retrospective amendment was raised as a new ground before the Supreme Court for challenging the judgment and in turn the provisions of the Act. Besides this, the petitioners also raised the contention before the Supreme Court that this Court in the judgment has not considered the challenge against the constitutional validity with reference to Direct-to-Home operators who are also providing same service. Taking note of these contentions namely the subsequent amendment and petitioners' challenge based on Article 14 with reference to Direct-to-Home operators, the Supreme Court set aside the judgment and remanded the matter for enabling the petitioners to amend the WP(C) raising additional grounds for consideration by this Court.

4. Learned Senior Counsel Shri. Dushyant Dave appearing for the petitioners argued in support of all the grounds raised including the additional grounds raised after remand by the Supreme Court. The first ground raised by him is that the service rendered by the cable TV operators falls under Entry 92C, List I of the VIIth Schedule of the Constitution which is covered by the Finance Act, 1994 providing for service tax on cable TV operators. Since the field is fully occupied by Central legislation, the State has no authority to levy tax under the Act in exercise of powers under Entry 62 of List II of the VIIth Schedule of the Constitution of India is the contention raised. Learned Advocate General appearing for the respondents on the other hand, relied on the decision of the Supreme Court in State of West Bengal & Others v. Pur