Case Law Details
The petitioner does not have a contention that the Resort owned by the petitioner does not come under the definition of “Hotel”. The Resorts are assessed under the LT Act and have also been remitting such tax as collected from the non-members who are residing in their facility and for any facility other than accommodation enjoyed by the members too. The definition also, as seen above, takes in all residential accommodation by way of business provided for a consideration. The definition itself would amply include the petitioner. As to the luxury provided in a hotel, it is the accommodation for residence or use and the other amenities and services. It has been found that the timeshare arrangement fundamentally and essentially provides for the residence of the members for specified days, on specified seasons, in specified types of rooms. The rates are also clear from Section 4, which depend upon the charges for accommodation and has to be applied on such charges for accommodation on a per-day basis.
The members when they book a holiday in a facility which has fixed rent or tariff, subject to availability are allowed the accommodation by virtue of the membership which has been obtained by passing of monetary consideration. The provision for using the accommodation for residence, can only be within the period of validity of the agreement between the parties, i.e., the holiday provider and the member. The assessee admits that rent or tariff for various types of accommodation, depending upon the seasons and also the importance of the location, varies and it has increased over the years. The increase in rent/tariff does not affect a member, since accommodation is promised on the membership being granted, which is also on the basis of fees which factors all the above elements which go into determining the rent/tariff. However, when a member who had taken a membership years back enjoys facility far later, within the validity period, what he enjoys is the facility that the Resort offers to any one in that particular season in that particular type of room; for which a rate/tariff is fixed by the Resort itself. When a non-member is provided accommodation for residence or use, the said fixed rate or tariff is collected. When a member takes up residence, it is offered in lieu of the amounts collected in advance; the measure of which is clearly decipherable from the fixed rate or tariff at that point of time when the residence or use of accommodation is enjoyed. This is the value taken by the assessee too, to determine liquidated charges when due. The value of the facility offered has to be determined on the basis of the value as assessable when the facility is enjoyed. The value so fixed by the assessee themselves, are the charges on which the rates are to be applied. The rate to be applied as per the LT Act, is on such value, which in the case of accommodation in a hotel is the charges per room per day at the time the taxable event occurs.
On the above interpretation, there can be no confusion in finding the measure. It is also pertinent that the assessee has not offered details of the amounts received from each of the members, to compute the charges for accommodation for the period in which they enjoyed the stay within the State of Kerala. In such circumstances, there can be no fault found in adopting the fixed room rent or tariff per day for the purpose of levying the tax. In this context, it is also to be noticed that the tax applied under the LT Act is one on the person who enjoys the accommodation and the assessee could collect such tax from the members.
The mere fact that advance payment was taken as membership fee cannot lead to a conclusion that the accommodation provided/offered to the member is free of cost. The assessee itself, as contended before the IT Appellate Tribunal, splits up the membership fees to the subsequent years to cover the obligation of providing for an accommodation for residence or use. U.K.Monu Timbers has no application, since it only dealt with the question of best judgement assessment that could be made in a penalty proceeding. There is no estimation made in the present case and the penalty is imposed on the actual occupation of the rooms, and the per-day charges of such rooms; as supplied by the assessee.
JUDGEMENT
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