w w w . L a w y e r S e r v i c e s . i n



M/S. Royal Goan Beach Resorts Llp (Formerly Royal Goan Beach Resorts Pvt Ltd), Represented by its General Manager, Jaison Chacko Anithanam v/s State of Kerala, Represented by Its Secretary to Government, (Taxes Department), Thiruvananthapuram & Another


Company & Directors' Information:- N V RESORTS PRIVATE LIMITED [Amalgamated] CIN = U55101DL2005PTC140042

Company & Directors' Information:- S V CORPORATION LLP [Active] CIN = AAQ-7877

Company & Directors' Information:- R P RESORTS PRIVATE LIMITED [Active] CIN = U55100KL1994PTC008387

Company & Directors' Information:- ROYAL INDIA CORPORATION LIMITED [Active] CIN = L45400MH1984PLC032274

Company & Directors' Information:- K V RESORTS PRIVATE LIMITED [Active] CIN = U55101KL2008PTC022372

Company & Directors' Information:- D AND J RESORTS PRIVATE LIMITED [Active] CIN = U55101KA2005PTC037192

Company & Directors' Information:- D D RESORTS PVT LTD [Active] CIN = U55101UP1996PTC085622

Company & Directors' Information:- J K RESORTS (INDIA) PRIVATE LIMITED [Active] CIN = U55101PB2010PTC033935

Company & Directors' Information:- E & G RESORTS PRIVATE LIMITED [Active] CIN = U55100MH2011PTC219298

Company & Directors' Information:- V B RESORTS PRIVATE LIMITED [Active] CIN = U92400MH2006PTC160282

Company & Directors' Information:- A P T AND CO LLP [] CIN = AAL-8025

Company & Directors' Information:- R D N A AND CO LLP [Active] CIN = AAM-4183

Company & Directors' Information:- K M A RESORTS PRIVATE LIMITED [Active] CIN = U55101KL2006PTC019473

Company & Directors' Information:- G L RESORTS LIMITED [Active] CIN = U55101AS2001PLC006625

Company & Directors' Information:- J K S RESORTS PRIVATE LIMITED [Active] CIN = U55101DL2005PTC139671

Company & Directors' Information:- C A P A (INDIA) LLP [] CIN = AAF-9325

Company & Directors' Information:- A B RESORTS PRIVATE LIMITED [Active] CIN = U55101CH1991PTC011581

Company & Directors' Information:- H. P. RESORTS CORPORATION PRIVATE LIMITED [Active] CIN = U55101PB2013PTC037173

Company & Directors' Information:- A V RESORTS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059863

Company & Directors' Information:- R & R RESORTS PVT LTD [Active] CIN = U55101WB1992PTC055530

Company & Directors' Information:- N K RESORTS PRIVATE LIMITED [Active] CIN = U55101UR2010PTC033163

Company & Directors' Information:- T K RESORTS PRIVATE LIMITED [Active] CIN = U55100PB2005PTC029014

Company & Directors' Information:- M D S & CO LLP [] CIN = AAF-2760

Company & Directors' Information:- A A A M & CO LLP [Active] CIN = AAT-1669

Company & Directors' Information:- K J M RESORTS INDIA PRIVATE LIMITED [Active] CIN = U55102KL1997PTC011072

Company & Directors' Information:- O AND S RESORTS PRIVATE LIMITED [Amalgamated] CIN = U55101DL2005PTC137184

Company & Directors' Information:- S. J. RESORTS PRIVATE LIMITED [Strike Off] CIN = U55101UR2007PTC032446

Company & Directors' Information:- R C A AND CO LLP [Active] CIN = AAU-3441

Company & Directors' Information:- D B Y & CO LLP [] CIN = AAF-3364

Company & Directors' Information:- C A N V A S & CO LLP [] CIN = AAG-1661

Company & Directors' Information:- E I U INDIA LLP [] CIN = AAG-0189

Company & Directors' Information:- S S S R & COMPANY LLP [Active] CIN = AAS-6238

Company & Directors' Information:- V K N RESORTS PRIVATE LIMITED [Active] CIN = U55100MH1998PTC113913

Company & Directors' Information:- A P RESORTS PRIVATE LIMITED [Active] CIN = U55101JK2013PTC003836

Company & Directors' Information:- U AND I RESORTS PRIVATE LIMITED [Active] CIN = U55100AN2009PTC000115

Company & Directors' Information:- P AND S RESORTS INDIA PRIVATE LIMITED [Strike Off] CIN = U55101KL2006PTC019352

Company & Directors' Information:- T M CHACKO AND CO PVT LTD [Active] CIN = U01119KL1957PTC001726

Company & Directors' Information:- S B RESORTS PRIVATE LIMITED [Active] CIN = U55204AP2014PTC095375

Company & Directors' Information:- S P RESORTS PRIVATE LIMITED [Strike Off] CIN = U45201OR2011PTC012963

Company & Directors' Information:- ROYAL GOAN BEACH RESORTS PRIVATE LIMITED [Converted to LLP] CIN = U18759GA1995PTC003100

Company & Directors' Information:- P G C RESORTS (INDIA) PRIVATE LIMITED [Active] CIN = U55101TZ2009PTC015156

Company & Directors' Information:- M. G. RESORTS PRIVATE LIMITED [Active] CIN = U45200UP2006PTC032590

Company & Directors' Information:- K L RESORTS PVT LTD [Strike Off] CIN = U55102KL1994PTC008129

Company & Directors' Information:- J S ROYAL PRIVATE LIMITED [Active] CIN = U70100UP2021PTC149300

Company & Directors' Information:- K M S RESORTS PVT LTD [Strike Off] CIN = U55101HP1994PTC014873

Company & Directors' Information:- B S RESORTS PRIVATE LIMITED [Strike Off] CIN = U55101CH1998PTC021876

Company & Directors' Information:- G P RESORTS PRIVATE LIMITED [Strike Off] CIN = U55102MH1996PTC100147

Company & Directors' Information:- ROYAL GOAN BEACH RESORTS PRIVATE LIMITED [Not available for efiling] CIN = U00069KA1995PTC018759

Company & Directors' Information:- M B S P & CO LLP [] CIN = AAI-4025

Company & Directors' Information:- Y N G AND CO LLP [] CIN = AAJ-6096

Company & Directors' Information:- ECOIRIA LLP [Active] CIN = AAO-2501

Company & Directors' Information:- V S K A & COMPANY LLP [Active] CIN = AAU-5542

Company & Directors' Information:- F A M S & CO LLP [Active] CIN = AAU-9603

Company & Directors' Information:- R S D RESORTS PVT LTD [Strike Off] CIN = U55101CH1991PTC011691

Company & Directors' Information:- N K R G AND CO LLP [Active] CIN = AAX-4256

Company & Directors' Information:- H N C P & CO LLP [Active] CIN = AAT-5981

Company & Directors' Information:- V G R A N D & CO LLP [Under Process Of Strike Off] CIN = AAO-5777

Company & Directors' Information:- P C INDIA RESORTS PRIVATE LIMITED [Active] CIN = U55101MH2001PTC130996

Company & Directors' Information:- K B H RESORTS PRIVATE LIMITED [Strike Off] CIN = U55100PB2006PTC030411

Company & Directors' Information:- K C G RESORTS PRIVATE LIMITED [Active] CIN = U55101HR2009PTC039831

Company & Directors' Information:- H. S. RESORTS INDIA PRIVATE LIMITED [Active] CIN = U55101UR1999PTC024888

Company & Directors' Information:- D P S RESORTS PRIVATE LIMITED [Active] CIN = U55204UP2011PTC046717

Company & Directors' Information:- A S R RESORTS PRIVATE LIMITED [Active] CIN = U55101DL2006PTC155838

Company & Directors' Information:- R B RESORTS PRIVATE LIMITED [Active] CIN = U55101DL2011PTC214512

Company & Directors' Information:- M. M. RESORTS PRIVATE LIMITED [Under Process of Striking Off] CIN = U70109DL2013PTC259872

Company & Directors' Information:- O N S RESORTS PRIVATE LIMITED [Strike Off] CIN = U55101PB2000PTC023508

Company & Directors' Information:- KERALA RESORTS PVT LTD [Strike Off] CIN = U55102KL1982PTC003650

Company & Directors' Information:- R S A C & CO LLP [Active] CIN = AAX-1702

Company & Directors' Information:- A B D AND CO LLP [] CIN = AAG-4228

Company & Directors' Information:- D G K T & CO LLP [Active] CIN = AAY-0763

Company & Directors' Information:- R H D B & CO LLP [] CIN = AAF-9564

Company & Directors' Information:- N J S R & CO LLP [Active] CIN = AAS-6904

Company & Directors' Information:- M S T S AND CO LLP [] CIN = AAJ-9789

Company & Directors' Information:- A G N & CO LLP [Active] CIN = AAT-3343

Company & Directors' Information:- A H S G & CO LLP [Active] CIN = AAU-8429

Company & Directors' Information:- J K J S & CO. LLP [] CIN = AAI-5880

Company & Directors' Information:- G K RESORTS PRIVATE LIMITED [Active] CIN = U55101DL1996PTC083411

Company & Directors' Information:- A B A M & CO. LLP [] CIN = AAF-2113

Company & Directors' Information:- M N S H & CO LLP [] CIN = AAG-4390

Company & Directors' Information:- T & R INDIA LLP [] CIN = AAH-4079

Company & Directors' Information:- S G S R & CO LLP [] CIN = AAH-3391

Company & Directors' Information:- D M M & COMPANY LLP [] CIN = AAJ-7431

Company & Directors' Information:- Y S K AND CO LLP [Active] CIN = AAN-5713

Company & Directors' Information:- J K K & COMPANY LLP [Active] CIN = AAX-1522

Company & Directors' Information:- K L S AND CO LLP [] CIN = AAJ-7210

Company & Directors' Information:- A Y K J & CO LLP [Active] CIN = AAS-7373

Company & Directors' Information:- K N A AND CO LLP [Active] CIN = AAU-0083

Company & Directors' Information:- H S K & CO LLP [Active] CIN = AAT-9072

Company & Directors' Information:- S D U AND CO LLP [Active] CIN = AAM-9609

Company & Directors' Information:- ROYAL GOAN BEACH RESORTS LLP [] CIN = AAI-4250

Company & Directors' Information:- R S M RESORTS PRIVATE LIMITED [Active] CIN = U17291PB2008PTC031591

Company & Directors' Information:- GOAN RESORTS PRIVATE LIMITED [Under Process of Striking Off] CIN = U55101GA2003PTC003351

Company & Directors' Information:- I A M RESORTS PVT LTD [Strike Off] CIN = U55101CH2006PTC029845

Company & Directors' Information:- M. N. RESORTS PRIVATE LIMITED [Strike Off] CIN = U55101DL2007PTC168774

Company & Directors' Information:- A D RESORTS PRIVATE LIMITED [Active] CIN = U55101DL2010PTC201715

Company & Directors' Information:- A TO Z RESORTS PRIVATE LIMITED [Strike Off] CIN = U55101DL2011PTC227025

Company & Directors' Information:- A N A RESORTS PRIVATE LIMITED [Active] CIN = U55101DL2011PTC227078

Company & Directors' Information:- T N M RESORTS PRIVATE LIMITED [Active] CIN = U55101HR2021PTC093063

Company & Directors' Information:- A P A R & CO LLP [Active] CIN = AAS-8336

Company & Directors' Information:- A A M K & CO LLP [Active] CIN = AAT-0385

Company & Directors' Information:- V U D & CO LLP [Active] CIN = AAT-1391

Company & Directors' Information:- A K M W AND CO LLP [Active] CIN = AAF-4352

Company & Directors' Information:- M B D & CO LLP [] CIN = AAG-6725

Company & Directors' Information:- S R J N & CO LLP [] CIN = AAH-0969

Company & Directors' Information:- A T M S & CO LLP [] CIN = AAH-2210

Company & Directors' Information:- J J J AND COMPANY LLP [] CIN = AAH-6513

Company & Directors' Information:- B G K & CO LLP [] CIN = AAI-2849

Company & Directors' Information:- M N K D & CO LLP [] CIN = AAI-9526

Company & Directors' Information:- D S R V AND CO LLP [] CIN = AAJ-5358

Company & Directors' Information:- R M BEACH RESORTS LLP [] CIN = AAJ-8252

Company & Directors' Information:- K D M AND CO LLP [] CIN = AAJ-9144

Company & Directors' Information:- S P K G & CO LLP [] CIN = AAK-1705

Company & Directors' Information:- V D S R & CO LLP [] CIN = AAK-2237

Company & Directors' Information:- M A S P N & CO LLP [] CIN = AAK-4575

Company & Directors' Information:- N P K & COMPANY LLP [] CIN = AAL-7453

Company & Directors' Information:- J B S K & CO LLP [Active] CIN = AAN-2033

Company & Directors' Information:- D R P B AND CO LLP [Active] CIN = AAN-7871

Company & Directors' Information:- PALVIT DEVELOPERS LLP [Active] CIN = AAO-3310

Company & Directors' Information:- N G V R AND COMPANY LLP [Active] CIN = AAO-4093

Company & Directors' Information:- J A S N & CO LLP [Active] CIN = AAP-0336

Company & Directors' Information:- R S A G AND CO LLP [Active] CIN = AAP-1444

Company & Directors' Information:- P R P A & COMPANY LLP [Active] CIN = AAT-7868

Company & Directors' Information:- S M B C & COMPANY LLP [Active] CIN = AAU-0557

Company & Directors' Information:- L M R K & CO LLP [Active] CIN = AAV-4030

Company & Directors' Information:- S L B M AND CO LLP [Active] CIN = AAV-4289

Company & Directors' Information:- V K & COMPANY LLP [Active] CIN = AAW-7564

Company & Directors' Information:- D A M & CO LLP [Active] CIN = AAW-8134

Company & Directors' Information:- N A D & CO LLP [Active] CIN = AAW-9504

Company & Directors' Information:- A B R & CO LLP [Active] CIN = AAX-0331

Company & Directors' Information:- V H P A & CO LLP [Active] CIN = AAY-1712

Company & Directors' Information:- N C A P & COMPANY LLP [Active] CIN = AAY-2026

Company & Directors' Information:- B M P S & CO LLP [Active] CIN = AAW-9364

Company & Directors' Information:- J K J & CO LLP [] CIN = AAE-5439

Company & Directors' Information:- S G C O & CO LLP [] CIN = AAI-0379

Company & Directors' Information:- G P S & CO LLP [] CIN = AAI-0872

Company & Directors' Information:- K K A B & CO LLP [] CIN = AAJ-3296

Company & Directors' Information:- C S D AND CO LLP [] CIN = AAJ-4629

Company & Directors' Information:- M P G V & CO LLP [] CIN = AAJ-5351

Company & Directors' Information:- A T S G & CO LLP [] CIN = AAK-3751

Company & Directors' Information:- G G S H & CO. LLP [] CIN = AAL-8083

Company & Directors' Information:- J N S V & CO LLP [Active] CIN = AAM-6900

Company & Directors' Information:- S P K T & CO LLP [Active] CIN = AAN-7572

Company & Directors' Information:- S H A & CO LLP [Active] CIN = AAO-4028

Company & Directors' Information:- R S S P K & CO LLP [Under Process Of Strike Off] CIN = AAR-2109

Company & Directors' Information:- A A S S & COMPANY LLP [Active] CIN = AAT-4426

Company & Directors' Information:- R R S J & CO LLP [Active] CIN = AAV-8062

Company & Directors' Information:- A R B R & CO LLP [Active] CIN = AAX-6334

Company & Directors' Information:- S K B & COMPANY LLP [Active] CIN = AAT-5051

Company & Directors' Information:- P R S S & CO LLP [Active] CIN = AAW-2115

Company & Directors' Information:- G A S A & CO LLP [Active] CIN = AAU-4365

Company & Directors' Information:- S P A S AND CO LLP [Active] CIN = AAS-9005

Company & Directors' Information:- S K R AND COMPANY LLP [Active] CIN = AAB-9330

Company & Directors' Information:- C S AND CO LLP [] CIN = AAL-5204

Company & Directors' Information:- M M G S AND CO LLP [Active] CIN = AAW-8857

Company & Directors' Information:- A J M S & CO LLP [Active] CIN = AAS-6794

Company & Directors' Information:- S B S S & CO LLP [] CIN = AAG-2178

Company & Directors' Information:- P Y S & CO LLP [] CIN = AAG-9715

Company & Directors' Information:- P U M & CO LLP [Under Process Of Strike Off] CIN = AAP-1869

Company & Directors' Information:- P V R A & CO LLP [Active] CIN = AAP-2457

Company & Directors' Information:- K S N C & CO LLP [Active] CIN = AAQ-8095

Company & Directors' Information:- A R N P AND CO LLP [Active] CIN = AAS-7063

Company & Directors' Information:- N M G K & COMPANY LLP [Active] CIN = AAU-2181

Company & Directors' Information:- S H A P AND COMPANY LLP [Active] CIN = AAU-5309

Company & Directors' Information:- B K Y & CO LLP [Active] CIN = AAU-7172

Company & Directors' Information:- B R D P & CO LLP [Active] CIN = AAV-4924

Company & Directors' Information:- S R B A & CO LLP [] CIN = AAF-9001

Company & Directors' Information:- C S M & CO LLP [Active] CIN = AAW-1462

Company & Directors' Information:- A C C A & CO LLP [] CIN = AAF-2112

Company & Directors' Information:- K A M AND CO LLP [Active] CIN = AAU-7380

Company & Directors' Information:- S C M K & CO LLP [Active] CIN = AAT-2422

    OP (Tax). No. 4 of 2019

    Decided On, 26 November 2020

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE K. VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE T.R. RAVI

    For the Petitioner: Joseph Kodianthara (Sr.), V. Abraham Markos, Abraham Joseph Markos, Isaac Thomas, Alexander Joseph Markos, Sharad Joseph Kodanthara, Advocates. For the Respondents: R1, R2, V.K. Shamsudheen, Senior Government Pleader.



Judgment Text

M/S. Royal Goan Beach Resorts Llp (Formerly Royal Goan Beach Resorts Pvt Ltd), Represented by its General Manager, Jaison Chacko Anithanam Versus State of Kerala, Represented by Its Secretary to Government, (Taxes Department), Thiruvananthapuram & AnotherFor the Petitioner: Joseph Kodianthara (Sr.), V. Abraham Markos, Abraham Joseph Markos, Isaac Thomas, Alexander Joseph Markos, Sharad Joseph Kodanthara, Advocates. For the Respondents: R1, R2, V.K. Shamsudheen, Senior Government Pleader.T.R. Ravi, J.1. Sri Mithun Davis, the owner of Edassery Kayal Resorts, leased out his property to M/s. Prestige Holiday Resorts Pvt.Ltd (hereinafter referred to as the lessee company), who in turn entered into a management agreement with M/s.Royal Goan Beach Resorts LLP, the petitioner herein, for running the hotel. The petitioner entered into an agreement with M/s. Regal Vacation Concepts Private Ltd(hereinafter referred to as Time share company), who is doing business of Timeshare, agreeing to provide accommodation to the guests who are booked through the time share company, at the rate of Rs.1,600/- per night, provided the company makes a minimum booking of at least 500 nights in a year. The lessee company, the petitioner and the Time share company are all sister concerns. The business module, though it looks very impressive and can be a study material for a business management student on its viability; we are not called upon to research into such intricacies. We are only expected to answer a challenge to an order passed by the assessing authority, confirmed in appeal before the Tribunal, whereby the petitioner has been assessed to luxury tax.2. The assessment relates to the year 2014-15. The assessment was completed by fixing the rental value of the rooms let out to guests at an average rate of Rs. 3,562/- per night. According to the petitioner the amount received by them for the rooms which were booked through the time share company was only at the rate of Rs.1,600/- per night. It is contended that the petitioner was catering to two types of guests viz, Walk-in guests and Member guests, the member guests being the guests who were booked through the time share company. Noting that there are no invoices to prove that the guests were charged at Rs.1,600/- per day and there was no ledger accounts showing the receipt of Rs. 92,40,312/- received from members, the assessing officer concluded that no reasonable and prudent man could have run a business in the manner contended by the petitioner. The assessing officer proceeded to assess to the best of his judgment by estimating the total receipts for 6334 nights of declared occupancy at the rate of Rs. 3,562/- per day for a room. The assessing officer adopted the rate at which the walk-in guests were billed, as the average rate for arriving at the amounts received from the guests booked by the time share company.3. On receipt of the notice regarding the above proposal, the petitioner filed a reply pointing out that the petitioner, the lessee company and the time share company are three different entities, who have entered into agreements regarding the manner in which the resort is to be run. It was pointed out that the guests of the time share company are provided accommodation by the petitioner on the basis of an agreement entered into between the petitioner and the time share company, agreeing on a subsidised rate of Rs.1,600/- per night. According to the petitioner, a sum of Rs.200/- representing the luxury tax portion for occupancy of the room alone, is being collected from such guests, since the consideration for accommodating such guests is paid directly by the time share company. As such, no invoices are raised against the guests separately showing that the rental is Rs.1,600/- for each day of their occupancy. It was contended that the Kerala Tax on Luxuries Act does not permit imposing luxury tax on the basis of an estimated rental, instead of the actual amount received for letting out the rooms. According to the petitioner, a sum of Rs. 92,40,312 received from the time share company represents the amount received for accommodating the guests who were booked through them.4. The assessing officer found that the receipt of the amount from the time share company leads to an inference that the assessee has used colourable devices to avoid tax, as envisaged in M/s. Mc Dowells Company Ltd., reported in [AIR 1986 SC 649]. The other reasons stated in the order are that the assessee has not disclosed the collection of Rs.200/- per room per day towards tax, from the guests and that the memorandum of understanding between the petitioner and the time share company is not in stamped paper. The details of an invoice showing the payment of Rs. 200/- per day towards luxury tax is also annexed in the assessment order.5. The petitioner challenged the assessment order before the Deputy Commissioner(Appeals). The Appellate Authority relied on the judgment in M/s Mahindra Holidays and Resorts India Ltd. v. Intelligence Officer, reported in [2017(2) KLT 217] [rendered by one among us KVC(J)], which was rendered in the case of assessees who were engaged in time share arrangements as well as accommodating non-member guests. This Court found that as far as such persons are concerned, the payment for the occupancy has already been collected in advance, in the form of membership fee, and hence such occupancy should also be assessable to tax under the Kerala Taxes on Luxuries Act. Appellate authority found that the rate to be applied as per the Luxury Tax Act is on such value, which in the case of accommodation in a hotel, is the charge per room per day at the time the taxable event occurs, which is the time when they enjoy the facility. The appellate authority confirmed the order of the assessing authority regarding the computation of luxury tax, but held that the forfeiture of the collected tax of Rs. 10,93,800/- was not correct, since there was no case for the assessing officer while issuing the notice, that the collected tax has not been paid. The appellate authority directed modification of the order of assessment to that limited extent.6. The assessee challenged the appellate order before the Tribunal, By Exhibit P6 order, the Tribunal dismissed the appeal. The Tribunal also found that the rate contract with the time share company is a colourable device and dubious method to evade payment of tax and that the memorandum of understanding between the petitioner and the time share company is not in a stamped paper.7. Heard Sri Joseph Kodianthara, Senior Advocate, instructed by Sri Abraham Joseph Markose, on behalf of the petitioner and Sri V.K.Shamsudheen, Senior Government Pleader, on behalf of the Revenue.8. The Senior Counsel submits that the reliance placed on Mahindra (supra) for justifying the estimation of the amount collected from the guests of the time share company was not correct. Mahindra (supra) was a case where the assessee itself was a time share company who was also engaged in accommodating non-members as guests. It was in the above circumstances that the rate payable by non-members was used as the measure for arriving at the rate at which the members occupied the rooms. Therein the measure on which tax had to be applied, ie: the rent per day was not clear. The assessee had failed to provide details of the consideration received from the members to determine the measure by computing the probable rent received. The model agreements itself also provided for liquidated damages on failure to provide accommodation after booking, at the rates applicable for outside guests dependent on the season. That was a case where the members have not paid any amounts for their accommodation. In the case before us, it is not the time share company which is the assessee. The assessee has accommodated guests who were booked through the time share company at a discounted rate, based on a memorandum of understanding with the time share company. We agree with the Senior Counsel that the measure adopted in Mahindra (supra) can have no application to the case on hand. In the case on hand, the assessee has received the charges for accommodating the guests from the time share company. According to the assessee, they are liable to pay luxury tax only for the amount which they have received for accommodating the guests, which is a discounted rate. We notice that if the finding of the authorities is to be upheld, it would mean that tax is being permitted to be levied also on the discounts given by the assessee to the guests in the form of lesser rates for accommodation. The Kerala Tax on Luxury Act does not contemplate levy of luxury tax on such estimated amounts. Tax is levied in respect of any luxury provided in a hotel at the rates prescribed in the Act on the basis of the gross charges for that accommodation. Mahindra (supra) was a case where such gross charges was not possible of determination owing to the fact that there were no payments made when the charging event occurred. Since it was a case where the payments for enjoyment of the luxury were made in advance in the form of membership fee, which quantum also stood undisclosed, this Court adopted the amounts charged to non-members as the measure to be adopted for members as well. In the case on hand, the assessee has received the charges on behalf of the guests from the time share company. In such circumstances, it was not open to the authorities to make additions to the amounts so received, based on the amounts that could have been charged if the guests were treated as walk in guests. Or else, the Assessing Officer if was of the opinion that there is a colourable device employed, ought to have issued notice to the sister concern, the time share company and examined their books of accounts; which was permissible but not attempted.9. The Senior Government Pleader attempted to justify the levy and contended that there are no ledger entries regarding the payment made by the members and there are no invoices raised for the amount of Rs.1,600/- per day, as contended by the assessee. The above argument cannot be accepted since the assessee does not have a case that they have raised separate invoices on the guests who were booked through the time share company. It is their specific case that the payment for the accommodation of such guests have been received from the time share company. They have also provided the break up of the two types of guests they had accommodated during the assessment year and also given the details of amounts received from the time share company. In fact, in the assessment order it has been specifically stated that the admission by the assessee that they have received Rs.92,40,301/- from the time share company would lead to an inference that the assessee had used colourable devises to evade tax. We do not think such a conclusion is possible. So also, the mere fact that the memorandum of understanding between the assessee and the time share company is not in stamp paper does not lead to an inference that there is no agreement. It can be seen from the order itself that the time share company was incorporated as early as in the year 2000, much before the assessment year in question. As such, there is no justification for suggesting that the memorandum of understanding was created later. Even the invoice which has been annexed to Ext.P4 would show that the guest was billed only for amounts other than the accommodation charges, which would support the contention of the assessee regarding the agreement with the time share company. Moreover, the judgment in Mahindra (supra) was rendered in the year 2017, much after the assessment order; which will rule out any attempt to escape from the rigour of the judgment.10. The Senior Government Pleader submitted that the original petition itself was not maintainable and relied on the judgments of Constitution benches of the Hon'ble Supreme Court in T.C.Basappa v. T.Nagappa and others reported in [AIR 1954 SC 440] and Hari Vishnu Kamath vs Syed Ahmad Ishaque and others reported in [1955 SCR 1104] which lays down the law regarding the exercise of jurisdiction to issue a writ of certiorari.11. Basappa (supra) was a judgment rendered by a Five Judge bench of the Hon'ble Supreme Court. Hari Vishnu (supra) is a later decision rendered by a Seven Judge Bench, which also considers Basappa (supra). Reference to the later decision is sufficient for considering the contention raised by the Senior Government Pleader. The gist of the contention is that this Court is not sitting in appeal over the order of the Tribunal and it is only in cases where there is an error of law apparent on the face of the record that exercise of jurisdiction under Article 226 is mandated.12. In paragraphs 21 and 22 of Hari Vishnu (supra) the Hon'ble Supreme Court, after referring to several judgments on the issue culled out the following propositions:(1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it.(2) Certiorari will also be issued when the court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice.(3) The court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the court will not review findings of fact reached by the inferior court or tribunal, even if they be erroneous. This is on the principle that a court which has jurisdiction over a subject-matter has jurisdiction to decide wrongly as well as rightly, and when the legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior court were to rehear the case on the evidence, and substitute its own findings in certiorari.(4) A writ of certiorari could be issued to correct an error of law. But it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record.(5) What is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case.13. Subsequently, another Five Judge Bench of the Hon'ble Supreme Court in Syed Yakoob v. K.S.Radhakrishnan reported in [AIR 1964 SC 477] in paragraph 8 held that what can be corrected by a writ has to be an error of law and that where it is manifest or clear that the conclusion of law recorded by an inferior Court or Tribunal is based on an obvious misinterpretation of the relevant statutory provision, or sometimes in ignorance of it, or may be, even in disregard of it, or is expressly founded on reasons which are wrong in law, the said conclusion can be corrected by a writ of certiorari. The Court also took note of a situation where the impugned error of law may not be obvious or patent on the face of the record as such and the Court may need an argument to discover the said error and held that even in such cases, there can be no doubt that what can be corrected by a writ of certiorari is an error of law and the said error must, on the whole, be of such a character as would satisfy the test that it is an error of law apparent on the face of the record.14. The above judgments have been referred to with approval in many later decisions of the Hon'ble Supreme Court. (for instance, Assistant Commissioner of Income Tax v. Saurashtra Kutch Stock Exchange Ltd reported in [(2008) 14 SCC 171)]. It can thus be seen that a writ of certiorari can be issued even in cases where the order of a statutory Tribunal is expressly founded on reasons which are wrong in law, provided that, the impugned conclusion is plainly inconsistent with the relevant statutory provision and no difficulty is experienced by the High Court in holding that the said error of law is apparent on the face of the record. The development of law in England, regarding the issuance of a writ of certiorari for correcting errors of law, has been succintly stated by Sri H.M.Seervai in his book "Constitutional law of India" Fourth Edition, Volume 2, in paragraphs 16.113 to 16.115. The author has described it as a rediscovery of a power which the Court of King's Bench had long possessed. Before 1951, there was a view that certiorari did not lie to correct an error committed in the exercise of jurisdiction. However, in 1951, the Courts corrected the above view and went forwar

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d to say that "certiorari lay also to correct an error of law apparent on the face of the order, that is, a proposition of law stated in the order which on an examination by the court is found to be erroneous" (see R. v. Northumberland Compensation Appeal Tribunal Ex p. Shaw reported in (1951)1 K.B 711). The above judgment is referred to in Hari Vishnu (supra).15. Applying the above principles to the facts of the case before us, we are satisfied that the orders impugned before us are orders containing apparent errors of law. As already observed, the reliance placed on Mahindra (supra) was legally wrong since the said judgment was rendered in a totally different set of facts. So also, the entire conclusion drawn by the statutory authorities and the Tribunal are not in accordance with the scheme of the Kerala Taxes on Luxury Act. The Act does not permit any estimation of the amounts charged by the assessee for the luxury provided, when there is sufficient material to show the actual charges levied. The measure of tax being clear there was no cause for the Assessing Officer to resort to best judgment. The computation adopted to determine the room rent per day on an artificial basis is an error apparent from the order itself, especially in the face of there being contrary evidence; in the form of the agreement, the receipt of the total amounts for residence in consonance with the agreement, as also the vouchers for the luxury tax collected issued to ascertained guests sponsored by the time share company.In the result, the original petition is allowed. Exts.P4, P5 and P6 orders are quashed. The respondents are directed to finalize the assessment of luxury tax taking into account the actual amount charged by the petitioner for accommodating the guests booked through the time share company. The parties shall bear their respective costs.
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