Yoga And Meditation Charges Are Subjected To Tax Under Kerala Tax On Luxuries Act: Kerala High Court

The Kerala High Court has held that yoga and meditation charges are subjected to tax under the Kerala Tax on Luxuries Act.

The bench of Justice A. K. Jayasankaran Nambiar and Justice Kauser Edappagath has upheld the tribunal's ruling in which the tribunal differentiated between the incomes, allowing certain deductions for the cost of medicines and professional charges related to ayurvedic treatments while including yoga and meditation charges and miscellaneous income in the taxable turnover. The Tribunal's ruling was primarily based on the definitions and exclusions specified under Section 4(2)(e) of the Kerala Tax on Luxuries Act.

The petitioner/assessee was assessed to tax under the Kerala Tax on Luxuries Act for the assessment year 2014–2015 on the room rent and ayurveda treatment charges, as well as the miscellaneous income, transportation charges, and yoga and meditation charges for the said year. The case of the petitioner before the authorities below was that it had been subjected to tax at a higher rate on the aforesaid income by treating it as a hotel and not as a hospital. It was also the case of the petitioner that the yoga and meditation charges, the ayurveda treatment charges, and the miscellaneous income could not have been included in the taxable turnover for the purposes of the Kerala Tax on Luxuries Act.

The assessing authority, however, rejected the claims of the petitioner and confirmed the demand against the petitioner assessee.

The First Appellate Authority, before whom the petitioner had preferred an appeal against the order of assessment, excluded the entire turnover representing the cost of medicines and professional charges, and the balance amount alone was subjected to assessment under the head ayurvedic treatment income.

However, the yoga and meditation charges and miscellaneous income of Rs. 3,18,691 were included in the taxable turnover even by the First Appellate Authority, which found that there was no challenge against the inclusion of yoga and meditation charges by the petitioner and that the miscellaneous income represented the taxable turnover of the hospital run by the assessee.

In the further appeal before the Tribunal, the Tribunal found that it was the petitioner assessee himself who had specified the excluded turnover in terms of Section 4(2)(e) of the Kerala Tax on Luxuries Act. Whatever was declared as not excluded was correctly subjected to tax under the Act by the lower authority. Similarly, when it came to the inclusion of yoga and meditation charges, it was found that there was no challenge to the inclusion of the said charges in the taxable turnover, and hence, the said inclusion had to be sustained. As regards the addition of the miscellaneous income of Rs. 3,18,691/-, it was found that the assessee's case was that the said income was generated from the sale of agricultural and waste products, and if that was in fact the case, the said income would merit exclusion from the taxable turnover for the purposes of luxury tax. The matter was, therefore, remanded to the assessing authority for the limited purposes of reconsidering the matter of the addition of miscellaneous income of Rs. 3,18,691 after verifying the accounts of the assessee.

“We are of the view that if the petitioner has any grievance regarding the correctness of the said order of the assessing authority, to the extent it does not adhere to the directions of the Tribunal in order, it is for him to agitate the same before the appellate authority, on merits,” the court said.

The court dismissed the writ petition filed by the assessee.

Citation: 2024 LiveLaw (Ker) 125

Counsel For Petitioner: Santhosh P.Abraham, V.V.Georgekutty

Counsel For Respondent: V.K. Shamsudheen

Case Title: Bethsaida Hermitage & Tourism (P) Ltd Versus State Tax Officer

Case No.: OP (TAX) No. 14 Of 2023

Click Here To Read The Order