The luxury tax under the Kerala Building Tax Act remains valid post-101st Amendment, tracing constitutional authority to Entry 49 of List II, demonstrating legislative competence.

JUDGMENT

This writ petition has been instituted by the petitioner seeking to challenge the demand of luxury tax under the provisions of Section 5A of the Kerala Building Tax Act , 1975 (hereinafter referred to as ‘the Act’), pursuant to Exts. P3 and P4 issued by the 4^th respondent herein. According to the petitioner, the demand has been created for the period subsequent to the 101^st Constitution Amendment, which came into force on 16.09.2016, on account of which there could not be any levy of luxury tax under the provisions of of the Act, thereafter.

2. Heard Sri. Mayankutty Mather, the learned Senior Counsel instructed by Sri. S. Parvathy, the learned counsel for the petitioner, as well as Sri. Mohammed Rafiq, the learned Special Government Pleader (Taxes), on behalf of the respondents.

3. The learned Senior Counsel, Sri. Mather, would fairly point out that the issue arising for consideration has been considered by a learned Single Judge of this Court in the judgment reported as Ison George v. State of Kerala and Others (2020 KHC 4126), which has been confirmed by the Division Bench of this Court in Ison George v. State of Kerala (2025 (4) KLT 79). However, he would add that the afore judgments have been rendered without addressing the issue in its correct perspective.

4. According to Sri. Mather, the imposition of luxury tax under Section 5A of the Act is traceable to the powers under Entry 62 of List II of the Constitution of India , as has already been considered and decided by the Division Bench of this Court in Sudhakaran v. State of Kerala (2004 (2) KLT 706). He would also rely on the aforesaid judgment to contend that the Division Bench of this Court has categorically found the nature of the luxury tax, as also why the imposition was geared to the Act as against the provisions of the Kerala Tax on Luxuries Act, 1976. He would further add that the Division Bench in Sudhakaran (supra) has categorically found that luxury tax under of the Act is required to be imposed by the revenue authorities, and that is why the legislature has not thought it fit to include it under the provisions of the 1976 Act, though the tax is one on luxury.

5. Therefore, according to him, the subsequent Division Bench of this Court in Ison George (supra) was not correct in sustaining the imposition of tax with reference to the power under Entry 49 of List II of the Constitution of India . The afore judgment has been rendered without making a reference to the law laid down in Sudhakaran (supra). He would further add that the Division Bench in Ison George (supra) has found contrary to the principles laid down in Sudhakaran (supra) on all the three points considered therein. He would further point out that the impact of the 2023 amendment to the Act, 1975, by which the term ‘luxury tax’ was substituted as ‘additional tax’, was also not placed before the Division Bench when it rendered the decision in Ison George (supra). He would therefore conclude by stating that the judgment in Ison George (supra) is only per incuriam.

6. He has also placed reliance on the judgments in Sundeep Kumar Bafna v. State of Maharashtra and Another ( 2014 KHC 4190 ) and Sha Faesal (Dr.) and Others v. Union of India and Another (2020 KHC 6235).

7. Per contra, Sri. Mohammed Rafiq, the learned Special Government Pleader (Taxes), would contend that the levy could be sustained with reference to the provisions of Entry 49 of List II of the Constitution of India , since the Division Bench of this Court, while rendering Sudhakaran did not have an occasion to consider the afore issue, and the constitutionality was challenged only w