Luxury Tax on Hospital Rooms Above Rs1,000: Kerala HC Upholds Govt's Decision [Read Judgment]
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN
&
THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
FRIDAY, THE 9TH DAY OF DECEMBER 2016/18TH AGRAHAYANA, 1938
WA.No. 2006 of 2012 IN WP(C).1390/2009
------------------------------------------------------------------
JUDGMENT IN WP(C) 1390/2009
.....................
APPELLANT/PETITIONER:
RAJAH HEALTHY ACRES(P)LTD, PERUMANNUR.P.O,
CHALISSERY, PALAKKAD, REPRESENTED BY ITS
AUTHORISED SIGNATORY-DR.SREERAJ KUNNASSERY.
BY ADVS.SRI.V.V.ASOKAN
SRI.P.P.RAMACHANDRAN
RESPONDENTS/RESPONDENTS:
1. STATE OF KERALA REPRESENTED BY CHIEF SECRETARY
TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001.
2. THE SECRETARY (TAXES), GOVERNMENT OF KERALA, SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
3. THE COMMISSIONER, COMMERCIAL TAXES,
THIRUVANANTHAPURAM-695 001.
4. INSPECTING ASSISTANT COMMISSIONER (INVESTIGATION BRANCH),
DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD-678 001.
5. INTELLIGENCE OFFICER(IB), COMMERCIAL TAX COMPLEX,
PALAKKAD-678 001.
BY SR.GOVERNMENT PLEADER SRI.MOHAMMED RAFIQ
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31-10-2016 ALONG
WITH WA. 395/2013, THE COURT ON 09-12-2016 DELIVERED THE FOLLOWING:
Thottathil B.Radhakrishnan
&
Devan Ramachandran, JJ.
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W.A.Nos.2006 of 2012 & 395 of 2013
--------------------------------------------------------
Dated this the 9th day of December, 2016
JUDGMENT
Devan Ramachandran, J.
Luxury cars, luxury hotels - but luxury in hospitals:
this would have been unthinkable a couple of decades
ago. Hospitals were always scary and horrid with sterile
white walls and linoleum floors staring at you. Hospital
food was almost inedible dished out from its canteen and
mess. The staff - matter of fact and nurses unfriendly and
totally business like.
2. In the past, traditionally, hospitality industry
has been focused on restaurants, lodging houses and
hotels. But in the last couple of decades or so, its focus
became more on patients' satisfaction in hospitals and
hospitals are now more customer-focal and patient-
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centric. A lot of attention is now bestowed on physical
environment and services.
3. While the primary business of the hospitals is
still healing, accommodation has become much more
comfortable and several adscitious services, unthinkable
a few years ago, have become common place and routine
in many of the hospitals. It is recognised by the doctors
and healers that the ambience and surroundings of the
hospitals, especially the accommodation provided to the
patients would impact recovery and contribute to the
recuperative processes. Many of the hospitals now have
much better infrastructure as compared to earlier.
Furniture and interiors have been spruced up to give the
patients and bystanders all the comforts and luxuries as
are possible. The focus of hospitality in hospital is more
on the interior design, trained staff and technologies like
Televisions and inter connectivity and such other facilities
and patients are willing to pay for all these. The
WA2006/12 & 395/13 3
harbinger of these changes was the advent of what is
known as medical/ hospital tourism. Patients travel from
other countries and States for medical procedures on
account of the high costs and waiting lists in their home
town or home country coupled with availability of avant-
garde technologies, skills and marketing of the medical
care industry in Kerala. This has led to virtual
globalisation of the health care market place.
4. These changes were obviously noticed by the
Legislature of Kerala and by Kerala Finance Act, 2008
amendments were brought into the Kerala Tax on
Luxuries Act, 1976 ('the Act' for brevity), bringing into its
purlieus 'luxury' provided in a hospital and making it
mandatory that every hospital having not less than five
rooms for accommodation of patients and which charges
Rs.1,000/- or more per room, excluding the charges for
medicine, food and professional services, to be registered
under the provisions of the Act. The effect of this
WA2006/12 & 395/13 4
amendment was that the hospitals answering the
criterion specified in the Act would become exigible to
tax, for the luxury provided by them in the hospitals.
5. These amendments were immediately
challenged by the appellants herein, which are hospitals
providing Allopathic and Ayurvedic treatments and
conventional methods of medical attention to various
patients who come to them. The appellants mounted the
challenge against the amendments before the learned
Single Judge primarily on the ground that the
amendments are beyond the legislative power of the
State of Kerala under Entry 62 List II of VII Schedule of
Constitution of India. The primary line of their attack was
that levy of luxury tax under Entry 62 List II of VII
Schedule of the Constitution would be permissible only if
'luxury' is provided in the hospitals and since they do not
provide any luxury, but are only places of healing, the
legislature has grossly exceeded in its competence while
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legislating, for which it had no sanction under the
relevant entry of the VII Schedule of the Constitution. The
appellants had, in the writ petitions, detailed the various
treatments and medical care attention that are being
provided to their patients and they submit that the
emphasis of the hospitals is to provide treatment to cure
the diseases of the patients and by no stretch of
imagination can it be said that any 'luxury' is being
provided in the hospitals. The appellants asserted that
patients would never go to a hospital for luxury. The
immediate and proximate cause for their challenge before
the learned Single Judge was that the appellants were, by
the authorities under the Act, sought to be assessed and
penalised under the relevant provisions of the Act for not
obtaining registration under the Act and for not
maintaining or returning the assessments as mandated by
the provisions contained therein. The challenge of the
appellants obviously was that they are not liable to be
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registered under the Act or to be assessed thereunder
and that, consequently no penalty could be imposed on
them for the alleged violations mentioned in the
impugned notices issued by the tax authorities.
6. The learned Single Judge, after elaborate
consideration of all the materials and factors, dismissed
the writ petitions and repelled the challenge against the
constitutionality of the impugned amendments holding it
to be within the legislative competence of the State
Legislature and finding it to be intra vires the
constitutional mandate.
7. We have heard these appeals in detail and we
are in conformity with the findings of the learned Single
Judge for the reasons, as we will presently state, which
are not in variance with those given by the learned Single
Judge, but complementary to it. We are also in conclusion
that the amendments made to the Act, bringing into its
sweep luxury in hospitals, do not suffer from any
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constitutional infirmity and is intra vires the legislative
competence of the State Legislature in making such
amendments.
8. A multitude of judgments of the Hon'ble
Supreme Court mirrors that there is presumption in
favour of validity of the Statute. The courts are to
presume that a particular law is intra vires and not ultra
vires. The courts are also expected to construe the
provisions of a Statute in such a way so as not to make it
ultra vires but intra vires. If certain provisions of law,
construed in one way, would make them consistent with
the Constitution and another possible interpretation
would make them unconstitutional, the courts are, under
the mandate of various binding precedents of the Hon'ble
Supreme Court, to lean in favour of the former
construction which would make the Statute valid. The
Rule of Interpretation, which is now settled, is that the
construction which leads to unconstitutionality or that
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results in invalidity rather than validity must be avoided
(see Express Newspapers (Private) Ltd. v. Union of
India (AIR 1958 SC 578), which is locus classicus on this
point).
9. Once a presumption is validly attached to a
Statute, the burden would be on him, who attacks it, to
show that there has been a transgression of constitutional
principles (see Charanjit Lal v. Union of India (AIR
1951 SC 41)). This principle has its underpinning, on the
further presumption that the legislature understands and
correctly appreciates the needs of its own people and that
its laws are made to correct the problems made manifest
by experience and that its discriminations are based on
adequate grounds (this principle has been initially
enunciated in Middleton v. Texas Power and Lights
Co. (246 US 152) and accepted by the Hon'ble Supreme
Court in Madhya Pradesh v. Radhakrishnan (AIR 1979
SC 249)). The courts have to keep in mind that the
WA2006/12 & 395/13 9
legislature is free to recognise degrees of harm and may
confine its restrictions to those cases where the need is
deemed to be the clearest.
10. Chief Justice Chagla in Nusserwanji v. State
of Bombay (AIR 1951 Bom 210) has stated this principle
with felicity that "however repugnant and legislation may
be to the conception which the court has, of what is right
or wrong however drastic provisions of such legislation
may be, if it does not, in fact, contravene any of the
Articles of the Constitution which lay down the
fundamental rights, then it would be the duty of the court
to uphold that legislation" .
11. It is now well settled that a law made by a
Parliament or Legislature can be struck down by the
courts only on two grounds, namely, the legislature lacks
legislative competence and that it has been passed in
violation of any of the fundamental rights guaranteed in
Part III of the Constitution or any other constitutional
WA2006/12 & 395/13 10
provision. The Hon'ble Supreme Court in State of A.P. v.
Mc Dowell & Co. ((1996) 3 SCC 709) had reiterated this
very emphatically in its observations contained therein,
which, for easy reference, is extracted as below:
"The power of Parliament or for that matter, the
State Legislatures is restricted in two ways. A law
made by Parliament or the legislature can be struck
down by courts on two grounds and two grounds
alone, viz., (1) lack of legislative competence and (2)
violation of any of the fundamental rights guaranteed
in Part II of the Constitution or of any other
constitutional provision. There is no third ground. .....
........ It is enough for us to say that by whatever name
it is characterised, the ground of invalidation must
fall within the four corners of the two grounds
mentioned above. In other words, say, if an
enactment is challenged as violative of Article 14, it
can be struck down only if it is found that it is
violative of the equality clause/equal protection
clause enshrined therein. Similarly, if an enactment
is challenged as violative of any of the fundamental
rights guaranteed by clauses (a) to (g) of Article 19
(1), it can be struck down only if it is found not saved
by any of the clauses (2) to (6) of Article 19 and so on.
No enactment can be struck down by just saying that
it is arbitrary or unreasonable. Some or other
constitutional infirmity has to be found before
invalidating an Act. An enactment cannot be struck
down on the ground that court thinks it unjustified.
Parliament and the legislatures, composed as they
are of the representatives of the people, are supposed
to know and be aware of the needs of the people and
what is good and bad for them. The court cannot sit
in judgment over their wisdom."
WA2006/12 & 395/13 11
12. We note that the appellants have challenged
the amendments made to the Act not on the ground that
they are violative of the fundamental rights or other
provisions of the Constitution, but singularly on the
ground that those amendments have been made in excess
of the powers available to the State Legislature under
Entry 62 List II of VII Schedule of the Constitution of
India. We remind ourselves that in Naresh Shridhar
Mirajkar v. State of Maharashtra (AIR 1967 SC 1) the
Hon'ble Supreme Court has cautioned that courts should
not cover the grounds and make observations not directly
involved in the proceedings and thus commanding that
unless a point arises for consideration and decision out of
the pleadings of the parties, the court shall not express
its opinion on such remarks. Since the challenge is on the
singular premise as aforementioned and no other, we will
confine our consideration of the matter and examination
of the law solely as to whether, in making these
WA2006/12 & 395/13 12
amendments, the legislature had exceeded its powers of
legislation under List II of VII Schedule. The pleadings
and submissions would indicate irrefragably that the
challenge to the amendments is in the realm of legislative
competence of the State Legislature on the specific
hypostasis of the the appellants' contention that the
amendments are beyond the competence of the
legislature only because there can be no activity in any
hospital, which could be termed or classified as 'luxury'.
13. The Act has been obviously legislated by the
Legislature of Kerala invoking its nomothetic powers
under Entry 62 List II of VII Schedule of the Constitution
of India. Entry 62 relates to 'taxes on luxuries, including
taxation on entertainments, betting and gambling'. The
Act was originally enacted in the year 1976 and it was
intended to be an Act to provide for levy and collection of
tax on luxury offered in the hospitals and lodging houses.
However, by the Finance Act, 1994, the words 'provided
WA2006/12 & 395/13 13
in the hospitals and lodging houses' were omitted and
thus the Act was re-cast to be one for the levy and
collection of tax on luxury. The fact that the State
Legislature is competent to legislate on luxuries is
obvious from Entry 62 List II of VII Schedule of the
Constitution. The assertions essentially, in these writ
appeals, impelled by the appellants are that there is no
luxury in hospitals and that therefore, nothing can be
taxed under the Act. This contention is further sought to
be invigorated by them avouching that hospitals provide
nothing intended to be luxury and that by artificially
defining 'luxury provided in a hospital', as is done by the
impugned amendments, the legislature has professed
contrary to the field of legislative power under Entry 62
List II of VII Schedule of the Constitution. The appellants
would, however, concede, when asked pointedly, that if
there is any luxury, within its meaning as is defined under
the Act, provided by hospitals, then it would be within the
WA2006/12 & 395/13 14
constitutional ambit of the legislature to bring it to the
sweep of the Act.
14. The word luxury is not one of easy definition.
The Act defines luxury in Section 2(ee) of the Act to mean
a 'commodity or service that ministers comfort or
pleasure'. One of the earliest cases where the meaning of
'luxury' was attempted to be answered was Abdul Kadir
(A.B.) v. State of Kerala (1962) Supp. 2 SCR 741). The
Hon'ble Supreme Court, after very elaborate
consideration as to whether tobacco was an article of
luxury, concluded by answering it in the manner
extracted as under:
"According to that entry, the State Legislatures can
make laws in respect of 'taxes on luxuries, including
taxes on entertainments, amusements, betting and
gambling'. Question, therefore, arises as to whether
tobacco can be considered to be an article of luxury.
The word 'luxury' in the above context has not been
used in the sense of something pertaining to the
exclusive preserve of the rich. The fact that the use of
an article is popular among the poor sections of the
population would not detract from its description or
nature of being an article of luxury. The connotation
of the word 'luxury' is something which conduces
enjoyment over and above the necessaries of life. It
WA2006/12 & 395/13 15
denotes something which is superfluous and not
indispensable and to which we take with a view to
enjoy, amuse or entertain ourselves."
15. Almost forty years later, in Godfrey Phillips
India Ltd. v. State of U.P. ((2005) 139 STC 537), the
Hon'ble Supreme Court again considered several other
writ petitions filed by the manufacturers, dealers and
sellers of tobacco who were challenging imposition and
levy of tax by various state legislatures on tobacco and
tobacco products by treating them as 'luxuries' within the
meaning of Entry 62 List II. All the earlier judgments
including Abdul Kadir were considered by the Hon'ble
Supreme Court in assessing the issue as to whether
'luxury' would mean an article or a thing or whether it
could be construed to be an experience of comfort and
pleasure in the circumferential purlieus of Entry 62 List
II of VII Schedule of the Constitution. The Hon'ble
Supreme Court then held that the word 'luxuries' in Entry
62 List II means the activity of enjoyment or an
WA2006/12 & 395/13 16
indulgence, which is generally recognised as being
beyond the necessary requirements of an average person
and that it does not mean an article of luxury. The
emphatic declaration of law thus made by the Hon'ble
Supreme Court is found in paragraph 85 of the judgment,
which deserves a complete reading and is, therefore,
reproduced below:
"Hence on an application of general principles of
interpretation, we would hold that the word
"luxuries" in entry 62 of List II means the activity of
enjoyment or indulgence in that which is costly or
which is generally recognised as being beyond the
necessary requirements of an average number of
society and not articles of luxury."
16. The Hon'ble Supreme Court also applied the
principle of 'noscitur a sociis' with respect to the
construction of Entry 62 List II of VII Schedule of the
Constitution and concluded unambiguously that the
words appearing therein 'including taxes on
entertainments, amusements, betting and gambling' were
not restrictive in its application to define luxury but that
WA2006/12 & 395/13 17
the words have been deliberately used in order to make
the scope of the defined word correspondingly wider. The
Hon'ble Supreme Court on this locus observed:
"In the context of entry 62 of List II this would not
mean that the word "luxuries" would be restricted to
entertainments, amusements, betting and gambling
but would only emphasise the attribute which is
common to the group. If luxuries is understood as
meaning something which is purely for enjoyment
and beyond the necessities of like, there can be no
doubt that entertainments, amusements, betting and
gambling would come within such understanding.
Additionally, entertainments, amusements, betting
and gambling are all activities. "Luxuries" is also
capable to meaning an activity and has primarily and
traditionally been defined as such. It is only
derivatively and recently used to connote an article of
luxury. One can assume that the coupling of these
taxes under one entry was not fortuitous but because
of these common characteristics.
Where two or more words are susceptible of
analogous meaning are clubbed together, they are
understood to be used in their cognate sense. They
take, as it were, their colour from and are qualified by
each other, the meaning of the general word being
restricted to a sense analogous to that of the less
general."
17. Once the meaning of the word 'luxury' is thus
ascribed, we only have to then appraise the nomothetic
competence, obtained to the State Legislature under VII
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Schedule of the Constitution of India, to make the
impugned amendments to the Act. The specific entry, ad
rem the impugned amendments, in VII Schedule of List II
in Entry 62 is "Taxes on luxuries, including taxes on
entertainments, amusements, betting and gambling". The
competence of the State Legislature to enact on the
matter of 'luxuries' is, therefore, incontestable since
Article 246 of the Constitution grants exclusive power to
make laws with respect to any of the matters enumerated
in List II to the State Legislature.
18. The function of the Lists in Schedule VII of the
Constitution is not to confer a power but to merely
demarcate the legislative field and so must, as far as
possible, be given a broad and comprehensive
interpretation. The doctrine of liberal interpretation has a
special application in the ambit of various legislative
powers included in the VII Schedule because the
allocation of the subjects to the Lists is not by way of
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scientific or logical definitions but by way of a mere
simplex enumeratio of broad categories (see Assistant
Commr, Urban Land-tax v. Buckingham and
Carnatic ((1970) 1 SCR 268). None of the items in the
Lists are to be read in a narrow or restrictive sense. In
construing an entry in a list conferring legislative powers,
the widest possible construction, according to their
ordinary meaning, must be put upon the words used
therein (see Punjab Distilling Industries Ltd. v. CIT
(AIR 1965 SC 1862) and Balaji v. Income-tax Officer,
Akola (AIR 1962 SC 123)). In Check-post Officer v.
Abdulla (AIR 1971 SC 792), these principles were re-
stated very powerfully. It was unequivocally affirmed that
a legislative entry does not merely enunciate powers; it
specifies a field of legislation and widest import and
significance be attached to it. The power to legislate on a
specified topic includes power to legislate in respect of
matters which may fairly and reasonably be said to be
WA2006/12 & 395/13 20
comprehended therein.
19. The impugned amendments to the Act define
luxury provided in a hospital under Section 2(fb) as
"accommodation for residence for use of amenities and
services provided in a hospital, the rate of charges of
which, excluding charges of food, medicine and
professional services, is one thousand rupees per day or
more''. Section 4 of the Act further deals with levy and
collection of luxury tax and specifies in sub-clause (e)
therein that in respect of a hospital, for charges of
accommodation for residence for use of amenities and
services, tax be levied at the rate of ten percent per room
where the gross charges, excluding charges of food,
medicine and professional services, is one thousand
rupees per day or more. Section 4, which is also one of
the impugned amendments, thereafter makes it
mandatory that tax can be collected for the luxury
provided in any such institutions.
WA2006/12 & 395/13 21
20. The impugned amendments, even on an ex
facie examination, would show that what is sought to be
taxed as 'luxury' in a hospital is only the accommodation
for residence and for use of amenities and services
provided, excluding the charges of food, medicine and
professional services. However, the provisions do not
treat all such accommodations and amenities as 'luxury',
but only those, the charges for which is one thousand
rupees per day or more. Similarly, for the purpose of levy
of tax on such luxury, registration of the hospital is
mandated only if such hospital has five or more rooms to
be rented for accommodation of which the gross charges
excluding food, medicine and professional charges is
rupees one thousand or more per room.
21. We see that what is attempted by the
Legislature is not to tax the fundamental and inherent
services of a hospital like food, medicine and professional
charges, but only the luxury of accommodation with
WA2006/12 & 395/13 22
adscitious amenities, and that too, the gross value of
which per day is more than rupees one thousand. These
amenities and facilities are not intended for recovery,
healing or treatment of the patients but are obviously
intended for better comfort and pleasure of both the
patient and bystander in a room. The Act defines the
word 'luxury' to mean a commodity or service that
ministers comfort or pleasure. The facilities that are
provided in a hospital which are beyond the essential
requirements like food, medicine, and professional
services and a basic room have been accepted as luxury
by the legislature in classifying them as such under the
Act through the impugned amendments.
22. The definition of luxury in Godfrey Phillips
(supra) has been declared by the Hon'ble Supreme Court
to mean an activity of indulgence or enjoyment in that
which is costly or which is generally recognised as
beyond the necessary requirements of an average
WA2006/12 & 395/13 23
number of society and not articles of luxury. Hence, such
activity which is intended to provide comfort and
pleasure beyond the requirements of the constitutive
facilities of a hospital ,which are essentially in the nature
of food, medicine and professional services and a basic
accommodation, would then satisfy the definition and
tests of luxury laid down by the Hon'ble supreme Court in
Godfrey Phillips (supra). The tax levied is not on the
article providing luxury but on the experience of such
luxury. To employ a simple analogy - tobacco is an article
of luxury and smoking is the luxury. In such view of the
matter, it is irrefutable that the amendments impugned in
these appeals do not seek to tax any article of luxury per
se but only the experience of the luxury relating to good
accommodation and other amenities not linked directly to
therapeutic, sanative or ameliorative constituents or
components of the services given to a patient under its
care by the hospitals. As we have already noticed above,
WA2006/12 & 395/13 24
the word 'luxury' has been defined in the Act itself and,
therefore, that definition would prevail and it is
competent on the part of the legislature to give it a wide
meaning so as to take in all such experience which
ministers comfort or pleasure. This is completely and
wholly within the competence of the Legislature to enact
upon under Entry 62 of the VII Schedule of the
Constitution, the matter being intrinsically and
irreparably related to 'luxuries' as obtaining in the said
Entry.
23. The final assault, so as to say, that the
petitioners make on the impugned amendments is
underpinned on the submission that it is irrational and
without sufficient purpose. They make the assertions
vehemently on the basis that the value of Rupees One
thousand, which is treated to be the value that makes
accommodation and amenities a 'luxury' is completely
irrational, since it is exiguous and very meagre. It is their
WA2006/12 & 395/13 25
assertion that the accommodation and amenities provided
for a value of Rupees one thousand and more would not
qualify it to be a luxury as is commonly understood. We
have examined this submission with some care. The
legislature should be presumed to have taken in its grasp
all criteria and conditions which are within the scope of
its cognizance in terms of the powers conferred on it and
must be accepted as having been made for the purpose of
achieving certain objectives. Interpretation of these
provisions cannot be done mechanically but in an organic
manner. We have to adopt an interpretation which does
not retard or impede the objectives that are sought to be
achieved. The legislature has classified accommodation
and other amenities under the umbra of 'luxury' placing a
pecuniary threshold of Rupees one thousand, obviously
based on the relevant social and economic parameters of
the people of the State.
WA2006/12 & 395/13 26
24. As we have already seen above, the term
luxury has been defined to exclude all the essential
components of healing and care given by the hospital and
includes only that which is not essential to such
therapeutic care or healing. The legislature obviously
thought that such accommodation and amenities beyond
the pecuniary limit of Rupees one thousand can be
classified as luxury and it is not something that the courts
can interfere with merely because the perception which it
holds, even it does, that such pecuniary limits are too low
in order to classify as a luxury. We have to be aware of
the fact that the legislature legislates for all the people of
the State. It is intended to cater to all the classes in the
socio-economic and cultural categories of people and it
should be presumed that such legislation has been made
taking into account all the relevant criterion including the
economic one so as to cater not to a particular class but
the entire citizenry. Legislation stems from the
WA2006/12 & 395/13 27
experience of the evils and should not, therefore, be
impeded by the particular beliefs or opinion that certain
classes of people would hold. The wisdom of legislature
has to be respected as being for the good of the citizenry
at large and not to the sentiments of a few. The power
given under the Constitution to legislate is large and wide
and must be construed as such. The famous words of
Justice Holmes in Bain Peanut Co. v. Pinson (282 US
499) is to be remembered that "the machinery of
government would not work if it were not allowed a little
play in its joints". The duty of the court is only to
interpret the provisions of the Constitution in a liberal
spirit and to achieve the purposes and ideals set out in
the Statute. As changes come in political and social life,
the legislature is competent to adopt and evolve the
Statutes in such a manner so as to answer such changes.
Even though the powers granted do not change, the
manner of its exercise would always depend upon the
WA2006/12 & 395/13 28
evolving socio- economic and political scenario but
emotions, sentiments, unfounded suspicions, wild
apprehensions and imaginary threats would obtain no
place while assessing the validity of such legislation. We
have no doubt that the legislature has taken into
consideration various criterion like the experience over
the time, the mischief that is sought to be redressed, the
requirements that are sought to be achieved and the
purpose for which a tax is imposed. The classification of
such accommodation and amenities as 'luxury', if it costs
Rupees one thousand or more per day, is, therefore, made
by the legislature for constitutionally sound principles
and cannot, therefore, be obtruded by this Court in
exercise of its powers under Article 226 of the
Constitution of India. The legislature must surely be given
the credit of being aware of the developments on the
subject from time to time and be credited with the
capacity to control and exercise the purposes and
WA2006/12 & 395/13 29
requirements for which the power was committed to it
under the Constitution. This is what is recognised as the
doctrine of 'generic interpretation' meaning the entitlement
to execute the power, with respect to new developments of
the same subject that arise from time to time, under the
control of the Authority to which the power is vested.
25. In view of the above and for the reasons that we
have already stated in this judgment, we hold that the
impugned amendments to the Act have been enacted by the
legislature within its competence and therefore, is intra
vires of the Constitution of India.
For these, the writ appeals fail and they are
dismissed. In the circumstances of the case, there will be
no order as to costs.
Thottathil B.Radhakrishnan, Judge
Devan Ramachandran, Judge
tkv