Keraleeyam Ayurvedic Resort Vs Commercial Tax Officer (Luxury Tax) (Kerala High Court)
In the case of Keraleeyam Ayurvedic Resort vs. Commercial Tax Officer (Luxury Tax), the Kerala High Court upheld the earlier decisions of the assessing authorities, tribunal, and single judge, affirming that the resort’s services, including Ayurvedic treatment, were subject to luxury tax. The appellant, operating as an Ayurvedic hospital and resort, argued that the Ayurvedic treatment was the primary service, with accommodation being ancillary. However, the tax authorities and appellate bodies found that the primary revenue of the resort was derived from providing accommodation and leisure services like boating, trekking, and cultural performances. The Ayurvedic treatment was viewed as incidental to the main business of resort operations, not the main activity.
The Kerala High Court rejected the appellant’s appeal, emphasizing that the resort did not produce evidence showing that income from accommodation was secondary to the Ayurvedic treatments provided. The tribunal’s decision was based on the brochures submitted by the appellant, which highlighted resort activities such as houseboat stays, elephant rides, and cultural performances, further proving that the Ayurvedic treatments were supplementary to the resort’s primary services. The court concluded that the services rendered by the appellant were primarily those of a resort with an incidental Ayurvedic component, making them liable for the luxury tax. The appeals were dismissed, and the penalty imposed earlier was upheld, with no further orders on costs.
