IMPORTANT POINTS
For evasion of payment of luxury tax, penalty cannot be imposed under Section 17A of the Act. This is for the reason that the provision contained in Section 17(2)(b) of the Act takes care of that situation by providing punishment for such act- Evasion of luxury tax is not an act specifically mentioned under Section 17A of the Act-Punishment is provided under Section 17(2)(b) for evasion of payment of luxury tax, in view of the provision contained in Section 17A(d) of the Act, penalty cannot be levied under Section 17A for committing such act-Failure to get registration under the Act and failure to file monthly returns under the Act attract levy of penalty-The assessee has not collected luxury tax from the patients-The assessee immediately paid the luxury tax due pursuant to the order passed by the assessing authority-The amount of penalty payable by the petitioner can be reduced to Rs. 1,00,000/-.

1. Mens-rea means guilty mind. Is mens-rea sine qua non for imposing penalty on an assessee under a taxing statute? This question essentially falls for consideration in this revision petition.

2. The petitioner/assessee is a hospital. It did not get itself registered under Section 4E of the Kerala Tax on Luxuries Act, 1976 (hereinafter referred to as the Act). It did not file returns of luxury tax as required under Section 5 of the Act. It did not pay luxury tax for the period from 01.04.2012 to 31.12.2012.

3. The assessing authority, after complying with the necessary formalities, assessed luxury tax on the petitioner to the tune of Rs. 3,09,370/-. The assessing authority also imposed a penalty of Rs. 6,18,740/- on the petitioner, it being twice the amount of the tax not paid.

4. The petitioner paid the luxury tax pursuant to the order passed by the assessing authority. The petitioner challenged in appeal the order of the assessing authority imposing penalty on it. The appellate authority confirmed the order of the assessing authority imposing penalty on the petitioner but reduced the amount of penalty to Rs. 3,09,370/-. Further appeal filed by the petitioner before the Kerala Agricultural Income Tax and Sale Tax Appellate Tribunal was dismissed. This revision petition is filed challenging the order of the Tribunal.

5. We have heard Sri. Julian Xavier, learned counsel for the petitioner and Sri. V.K. Shamsudheen, learned Senior Government Pleader.

6. Learned counsel for the petitioner has submitted that the assessee was not aware of the amendment made to the Act in the year 2008 bringing hospitals within the purview of the Act. He would submit that non-registration of the hospital under the Act and non-payment of the luxury tax by the petitioner was not intentional. Learned counsel would contend that mens-rea on the part of the assessee is an essential element to impose penalty under the Act.

7. Per contra, learned Senior Government Pleader would contend that mere violation of the provisions of the Act would attract imposition of penalty on the assessee. He has contended that it is not necessary to establish mens-rea to impose penalty under Section 17A of the Act.

8. Section 2(fb) of the Act states that luxury provided in a hospital means accommodation for residence for use of amenities and services provided in a hospital the rate of charges of which, excluding charges of food, medicine and professional services, is one thousand rupees per day or more. Section 4(1) (iii) of the Act provides for levy and collection of tax in respect of luxury provided in a hospital. Section 4(2)(e) of the Act states that luxury tax shall be levied and collected in respect of a hospital, for charges of accommodation for residence for use of amenities and services, at the rate of ten per cent per room where the gross charges, excluding charges of food, medicine and the professional services, is one thousand rupees per day or more. Section 4(3) of the Act states that the luxury tax shall be collected by the proprietor and paid within such period and in such manner as may be prescribed. Section 4E of the Act provides that every hospital having not less than five rooms to be rented for accommodation of patients for treatment or otherwise for which gross charges excluding charges for food, medicine and professional services is one thousand rupees or more per room, shall get itself registered with such authority and in such manner as may be prescribed.

9. Section 5 of the Act provides that every proprietor liable to pay luxury tax under the Act shall submit such return in such manner and within such period as may be prescribed. Section 6(1) states that on receipt of a return under Section 5, if the assessing authority is satisfied that the return is correct and complete, it shall assess the proprietor on the basis thereof. Section 6(2) states that if the proprietor fails to submit the return under Section 5 in due time or if the return submitted by hi