Parliament can impose Service Tax on Restaurants & Hotels – Bombay HC

By CA Sandeep Kanoi Service Tax Featured , Judiciary April 8, 2014

TaxGuru Citation: 2014 taxguru.in 125
Case Name: Indian Hotels and Restaurant Association Vs Union of India (Bombay High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Bombay High Court

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CA Sandeep Kanoi

Bombay HC dismisses writ filed by Indian Hotels and Restaurant Association and upholds validity of service tax levy on air-conditioned restaurants serving liquor u/s 65(105)(zzzzv) of Finance Act and held the levy as constitutional.

Rejects Kerala HC’s single Judge ruling in Kerala Classified Hotels and Resorts Association for want of categorical finding that tax in question covered by State List –

The learned Single Judge of Kerala High Court beyond referring to three Supreme Court judgments, namely, Associated Hotels of India Ltd. (supra), Northern India Caterers Limited (supra) and K.Damodarasamy Naidu (supra), neither observes or holds that the tax in question is covered by the State List (Entry 54). A categoric finding in that regard is necessary. The analysis of the learned Single Judge and of the Constitutional definition, with respect, cannot be accepted. The attempt by the learned Single Judge to get over the judgments of the Honourable Supreme Court relied upon by the learned Additional Solicitor General, does not commend to us. The learned Single Court Judge has not underscored and noted the distinction, with respect, referred by us in detail. We are, therefore, unable to agree with the view of the learned Single Judge of Kerala High Court.