Kerala High Court
Keraleeyam Ayurvedic Resort vs The Commercial Tax Officer on 11 March, 2025
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
W.A. Nos.585 of 2018
& 709 of 2018 1 2025:KER:22193
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 11TH DAY OF MARCH 2025 / 20TH PHALGUNA, 1946
WA NO. 709 OF 2018
AGAINST THE JUDGMENT DATED 20.7.2017 IN W.P.(C) NO.36384 OF
2010 OF HIGH COURT OF KERALA
APPELLANT/S:
KERALEEYAM AYURVEDIC RESORT
A UNIT OF SD PHARMACY PVT. LTD.,
HAVING ITS REGISTERED OFFICE AT DHANWANTHARI BHAVAN,
ALAPPUZHA-688011, REPRESENTED BY ITS MANAGING DIRECTOR,
MR. K. RAMESH.
BY ADVS.
SRI.ANIL D. NAIR
SRI.ASISH MOHAN
SRI.P.JINISH PAUL
SRI.G.KRISHNAKUMAR MALLYA
KUM.MEKHALA M.BENNY
SMT.MARY JOSSY
SRI.R.SREEJITH
RESPONDENT/S:
1 THE COMMERCIAL TAX OFFICER(LUXURY TAX)
COMMERCIAL TAX OFFICE, ALAPPUZHA-688001.
2 STATE OF KERALA
REPRESENTED BY ITS SECRETARY (TAXES),
SECRETARIAT, THIRUVANANTHAPURAM-695001.
SRI. V.K. SHAMSUDHEEN, SR.GP
THIS WRIT APPEAL HAVING COME UP FOR HEARING ON 11.03.2025,
ALONG WITH WA NO.585/2018, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
W.A. Nos.585 of 2018
& 709 of 2018 2 2025:KER:22193
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 11TH DAY OF MARCH 2025 / 20TH PHALGUNA, 1946
WA NO. 585 OF 2018
AGAINST THE JUDGMENT DATED 20.7.2017 IN W.P.(C) NO.10008 OF
2011 OF HIGH COURT OF KERALA
APPELLANT/PETITIONER :
KERALEEYAM AYURVEDIC RESORT
A UNIT OF SD PHARMACY PVT.LTD.,
HAVING ITS REGISTERED OFFICE AT DHANWANTHARAI BHAVAN,
ALAPPUZHA-688011, REPRESENTED BY ITS MANAGING DIRECTOR,
MR.K.RAMESH.
BY ADV SRI.ANIL D. NAIR
RESPONDENTS/RESPONDENTS :
1 THE COMMERCIAL TAX OFFICER
(LUXURY TAX),COMMERCIAL TAX OFFICE,
ALAPPUZHA-688001.
2 STATE OF KERALA
REPRESENTED BY ITS SECRETARY (TAXES),
SECRETARIAT, THIRUVANANTHAPURAM-695001.
THIS WRIT APPEAL HAVING COME UP FOR HEARING ON 11.03.2025,
ALONG WITH WA NO.709/2018, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
W.A. Nos.585 of 2018
& 709 of 2018 3 2025:KER:22193
JUDGMENT
Easwaran S., J.
These intra-court appeals are preferred by the petitioner
being aggrieved by the judgment in W.P.(C) Nos.36384 of 2010 and
10008 of 2011.
2. The brief facts necessary for the disposal of the appeals are
as follows:
The appellant/petitioner claims that they are running an
Ayurvedic hospital, a part of S.D. Pharmacy Private Limited and
also a manufacturer of Ayurvedic medicines. The assessments were
made prior to the amendment brought to the Luxury Tax Act
through the Kerala Finance Act, 2008, incorporating "hospital"
within the ambit of Luxury Tax Act. The definition of "hospital"
after the amendment includes a nursing home, therapy centre,
rejuvenation or recuperation centre, nature care or cure centre,
Ayurvedic cure or care centre and other treatment. However, for
levy of Luxury Tax prior to the amendment, it must be shown that
the appellant was running a hotel in terms of Section 2(e) of the
Luxury Tax Act. The assessing authority found that the nature of
the activity of the appellant is to provide accommodation to the
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tourists and also providing Ayurvedic treatment to sick and non-
sick persons, and their main income is derived from providing
accommodation to the tourists. Therefore, the assessing authority
was of the opinion that the wellness treatment provided by the
appellant, along with accommodation, is liable to be taxed. The
appellant was thus assessed by an order dated 30.9.2009 for the
tax. Immediately after the order of assessment, the appellant was
also visited with an order of penalty. Aggrieved by the order of
assessment and penalty, the appellant preferred statutory appeals
before the Deputy Commissioner (Appeals) and the same was
dismissed. As against the said order, the appellant filed statutory
appeals before the appellate tribunal. The appellate tribunal, by
order dated 16.8.2010, dismissed the appeals and modified the
demand of penalty to the extent of tax payable. Aggrieved by the
order of the tribunal confirming the order of assessment and
penalty, the appellant approached the writ court by preferring the
aforementioned writ petitions.
3. The learned Single Judge who considered the writ petition
found that inasmuch as the appellant has not chosen to produce
any books of accounts before the authority to show that the income
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derived from the renting act of accommodation was incidental to
the main activity of providing treatment to the patients, refused to
interfere in the order of assessment. However, considering the
peculiar facts, it reduced the penalty to 50% of the tax payable.
Aggrieved by the aforesaid judgment, the present intra-court
appeals are preferred by the petitioner.
4. Heard Sri. Anil D. Nair, the learned Senior counsel
appearing on behalf of the appellant assisted by Ms. Mekhala M.
Benny, and Sri. V.K. Shamsudheen, the learned Government
Pleader appearing on behalf of the respondents.
5. On a consideration of the rival submissions raised across
the Bar, we find that these appeals have to fail for multiple reasons.
As noticed above, the learned Single Judge has found that the
appellant did not produce the books of accounts in order to
establish that the income derived out of the rent received from the
accommodation is incidental to the treatment given to the
inpatients by the appellant. In our considered view, the said finding
of the learned Single Judge does not call for any interference,
especially since the same falls within the realm of finding of facts.
The appellant having failed to prove that the income derived out of
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the accommodation was incidental to the treatment extended by
the appellant, we are of the view that the appellant cannot succeed.
Still further, a reading of the order passed by the appellate tribunal
shows that the main activities of the appellant as per the brochures
produced before the assessing officer, are canoeing, motor boat
cruises, houseboat stay, trekking, Alleppey beach visit, coir factory
visit, elephant ride, Kathakali, temple dance, dramas,
Mohiniyattam and Kalaripayattu. Therefore, in the light of these
activities, the tribunal took note of the fact that the main activities
of the appellant are not running the hospital but providing a resort
and other facilities and the Ayurvedic treatment is only incidental
to that of the facilities. The tribunal further found that the tariff
rate of the rooms described are inclusive of the breakfast and other
facilities. Hence, the tribunal was of the view that while imparting
Ayurvedic treatment to the inpatient, though a special diet is given
in accordance with the treatment and the medicine given, the fact
that an extra person is accommodated in the resort is charged with
a rate and the fact that the breakfast, lunch, and dinner have been
provided, shows that the appellant is not running an ayurvedic
treatment centre but a resort where the incidental facility of
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ayurvedic treatment is being given to the occupants.
In the light of the findings rendered by the tribunal as well
as by the learned Single Judge, we are of the view that they are
essential in the realm of finding of facts which cannot be
re-appreciated by us while considering these intra-court appeals.
Therefore, we are of the view that there is no merit in these
appeals, and accordingly, the same is dismissed. No order as to
costs.
Sd/-
DR. A.K.JAYASANKARAN NAMBIAR
JUDGE
Sd/-
EASWARAN S.
JUDGE
NS
