ORDER In S.L.P.(C) No. 19097/2002:
1. Leave granted.
2. The challenge before the High Court in the writ petition filed by the appellants was to the constitutional validity of Section 3(B) of the Maharashtra Tax on Luxuries Act, 1987 (for short, 'Maharashtra Act'). The said provision is in pari-materia to Section 3(A) of the A.P. Tax on Luxuries Act, 1987 (for short, 'A.P. Act'). Section 3(B) of the Maharashtra Act reads as under:
" Section 3B: Levy of Luxury Tax on a tobacconist:-
1) Subject to the provisions of this Act and the Rules made thereunder, there shall be levied a tax on the turnover of receipts of a tobacconist.
2) There shall be levied a tax on the turnover of the receipts of a tobacconist, in so far as the turnover of receipts relates to the tobacco specified in column (2) of the Table hereunder, at the rates set put in column (3) thereof.
Provided that, the tax shall be levied under Sub-section (2), after deducting from such turnover, receipts in respect of which the tobacconist proves to the satisfaction of the Commissioner that,
a) tax on the very tobacco supplied by him whether by way of sale or otherwise has already been paid by any other person and in support thereof produces a proof of such payment; or
b) the tobacco has been supplied by way of inter-state consignment to another State, whether the consignment is to himself, or to any other person and further, in support of such claims, produces on demand a certificate as may be prescribed; or
c) the tobacco has been supplied by way of sale in the course of inter-state trade or commerce or in the course of export outside the territory of India and in support thereof produces a proof of such sale or export.
3. For the purposes of Sub-section (2), a sale shall be deemed to have taken place--
a) in the course of inter-state trade, if such sale has occasioned the movement of tobacco from Maharashtra to any other State; and
b) in the course of export outside the territory of India if the sale occasions such export."
The provisions of Section 3(A) of the A.P. Act have been reproduced in para 14 of the Constitution Bench decision in Godfrey Phillips India Ltd. and Anr. v. State of U.P. and Ors., 2005 (4) SCALE 465.
3. By the impugned judgment, the High Court, upholding the validity of the aforesaid Section 3(B), has dismissed the writ petition.
4. Examining the validity of Section 3(A) of the A.P. Act, this Court has held that the word 'luxuries' in Entry 62 of List II of the Constitution means the activity of enjoyment of or indulgence in that which is costly or which is generally recognized as being beyond the necessary requirements of an average member of society and not articles of luxury and, on that basis, came to the conclusion that this Entry does not permit the levy of tax on goods or articles. The point in issue is covered against the State by the judgment of the Constitution Bench in the case of Godfrey Phillips.
5. In this view, we set aside the impugned judgment of the High Court and hold that Section 3(B) of Maharashtra Act to be unconstitutional.
6. If the appellants have collected any amounts towards luxury tax from consumers/customers after obtaining interim orders from the High Court, they shall pay the said amount to the State Government.
7. The appeal is allowed accordingly.
8. I.A. No. 4 is allowed. The application for impleadment filed by the State of Karnataka is restored and the same is disposed of having become infructuous.
In S.L.P.(C) No. 700/2003:
9. Leave granted.
10. In view of the order passed in S.L.P.(C) No. 19097/2002, the impugned judgment of the High Court is set aside and the appeal is allowed.
11. If the appellants have collected any amounts towards luxury tax from consumers/customers after obtaining interim orders from the High Court, they shall pay the said amount to the State Government.