Kerala High Court Upholds Tribunal's Decision that Yoga and Meditation Charges Are Subjected To Tax under Kerala Tax on Luxuries Act

Kerala High Court Upholds Tribunal's Decision that Yoga and Meditation Charges Are Subjected To Tax under Kerala Tax on Luxuries Act

The Kerala High Court, in a decision by Justices A. K. Jayasankaran Nambiar and Kauser Edappagath, affirmed that charges for yoga and meditation are liable to taxation under the Kerala Tax on Luxuries Act.

The court upheld the tribunal's decision, which distinguished between various sources of income, permitting deductions for expenses related to medicines and professional fees for ayurvedic treatments while deeming charges for yoga, meditation, and other miscellaneous income as taxable turnover. The tribunal's decision was primarily guided by the definitions and exclusions outlined in Section 4(2)(e) of the Kerala Tax on Luxuries Act.

The petitioner/assessee faced tax assessment under the Kerala Tax on Luxuries Act for the assessment year 2014–2015, encompassing charges for room rent, ayurveda treatments, miscellaneous income, transportation, yoga and meditation services. The petitioner asserts that they were taxed at a higher rate as their income was treated as if they were operating a hotel rather than a hospital. Additionally, they argued that charges for yoga, meditation, ayurveda treatments, and miscellaneous income should not have been considered part of the taxable turnover under the Kerala Tax on Luxuries Act.

The assessing authority dismissed the claims of the petitioner and upheld the tax demand against the petitioner assessee.

The First Appellate Authority, to whom the petitioner had appealed the assessment order, opted to exclude the complete turnover comprising the cost of medicines and professional charges. The remaining amount alone was then considered for assessment under the category of ayurvedic treatment income.

Nevertheless, the First Appellate Authority included both the yoga and meditation charges and the miscellaneous income amounting to Rs. 3,18,691 in the taxable turnover. The authority noted that the petitioner did not contest the inclusion of yoga and meditation charges and determined that the miscellaneous income constituted part of the taxable turnover of the assessee's hospital.

Upon further appeal before the Tribunal, it was determined that the petitioner assessee had previously specified the excluded turnover under Section 4(2)(e) of the Kerala Tax on Luxuries Act. Consequently, any turnover declared as not excluded was deemed appropriately subjected to tax by the lower authority. Similarly, regarding the inclusion of yoga and meditation charges, no challenge had been raised against their inclusion in the taxable turnover, leading to their sustained inclusion.

Concerning the additional miscellaneous income of Rs. 3,18,691, the assessee contended that this income originated from the sale of agricultural and waste products. If verified to be accurate, such income would qualify for exclusion from the taxable turnover for luxury tax purposes. Therefore, the matter was remanded to the assessing authority for reconsideration of the inclusion of the aforementioned miscellaneous income, contingent upon a thorough verification of the assessee's accounts.

The court observed that if the petitioner has any grievances regarding the accuracy of the order issued by the assessing authority, especially if it does not comply with the directions given by the Tribunal, it is the petitioner's responsibility to address these concerns before the appellate authority, presenting them on their merits. Consequently, the court dismissed the writ petition filed by the assessee.