Hiring charges are considered a service provided by the hotel and are taxable under the Kerala Tax on Luxuries Act, 1976.

JUDGMENT :

The brief facts of the case of the petitioner are as follows:-

The petitioner has filed annual return for the year 2007-08 under Section 5 of the Kerala Tax on Luxuries Act,1976 (for short 'the Act'). The first respondent, the assessing authority, the Commercial Tax Officer (Luxury Tax), Kannur, found that the accounts were not acceptable and notice was issued under Section 6(2) of the Act, proposing to complete assessment by adding income under the various heads, totalling to an amount of Rs.22,07,574/-. On receipt of the notice, the petitioner filed a detailed reply contending that the swimming pool charges cannot be taxed as it is from non-residents of the hotel and the addition of hall rent is improper as the amount is below taxable and the other collections such as the hire charges, sight seeing charges, lawn charges, charges on services, miscellaneous receipts, insurance claim received, new year programme collection etc. were not from the residents of the hotel, but from non-residents and hence they were not taxable. The first respondent, however, found that the said arguments raised by the petitioner were not acceptable and Ext.P1 assessment order was passed by the first respondent. Thereafter, Ext.P2 notice of assessment and demand was issued to the petitioner, calling upon to pay an amount of Rs.3,10,519/-under the luxury tax and the petitioner was to pay an amount of Rs.1,47,939/- after deducting the amount of Rs.1,62,580/- already paid towards the said tax. A notice of demand for payment of interest under Section 10(2) was also issued to the petitioner as per Ext.P3 directing the petitioner to pay an amount of Rs.69,531/-. The petitioner filed appeal along with an interlocutory application for stay of collection of tax before the second respondent-Deputy Commissioner (Appeals)-II, Kozhikode evidenced by Exts.P4 and P5 respectively. The second respondent, as per Ext.P6, dismissed the appeal, confirming the demand raised by the first respondent. Further, the petitioner filed a second appeal against Ext.P6 order before the Tribunal and the said appeal was also dismissed by the Tribunal as per Ext.P7 order. Thereafter, the respondents initiated steps for recovery of the amount by issuing notice to the bank for payment of the amount from the account of the petitioner and Ext.P8 is the letter sent by the Bank to the petitioner enclosing the statutory notice in Form 6 sent by the third respondent. Subsequently, Ext.P9 letter was sent by the petitioner to the bank requesting not to honour the request of the third respondent. The petitioner was informed by the bank that they had already paid the dues from the STDR account and the balance amount is parked on the petitioner's current account, evidenced by Ext.P10. Aggrieved by Exts.P1, P6, P7 and P8, the petitioner has approached this Court with the above writ petition.

2. The first respondent has filed counter affidavit contending as follows:-

Proceedings were initiated against the petitioner for assessment under Section 6(2) of the Act, since there is suppression of turnover for the assessment year 2007-08. The petitioner preferred an appeal before the first appellate authority, but the authority dismissed the appeal. Challenging the same, the petitioner filed second appeal before the Tribunal and that was also dismissed by the Tribunal. Assessment under Section 6(2) of the Act was completed on the ground that suppression of taxable turnover was unearthed on the verification of profit and loss account and other documents. It was also clearly found that the collection of amount from swimming pool, hall rent and other collections exigible to tax were suppressed by the petitioner. As per the Kerala Tax on Luxuries Act, 1976, every amenities provided in a hotel except food and liquor is taxable. Luxury tax is to be levied and collected for the accommodation of residence in a hotel and also for the amenities and services provided in a hotel. At the same time, the sight see