Ayurvedic Treatment Is Only Incidental To Facilities Provided By Assessee In Resort, Liable To Be Taxed: Kerala High Court

The Kerala High Court stated that ayurvedic treatment is only incidental to facilities provided by assessee in a resort, hence liable to be taxed. “the main activities of the assessee 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, the main activities of the assessee are not running the hospital but providing a resort and other facilities and the Ayurvedic treatment is only incidental to that of the facilities” observed the Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. In this case, the appellant/assessee are running an Ayurvedic hospital, a part of S.D. Pharmacy Private Limited and also a manufacturer of Ayurvedic medicines. The assessing authority found that the nature of the activity of the assessee is to provide accommodation to the 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 assessee, along with accommodation, is liable to be taxed. The assessee was thus assessed by an order for the tax. Aggrieved by the order of assessment and penalty, the assessee preferred statutory appeals before the Deputy Commissioner (Appeals) and the same was dismissed. As against the said order, the assessee filed statutory appeals before the appellate tribunal. The appellate tribunal 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 assessee approached filed writ petition. The bench agreed with the Single Judge that the assessee 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 assessee. The bench stated 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 assessee is not running an ayurvedic treatment centre but a resort where the incidental facility of ayurvedic treatment is being given to the occupants.” In view of the above, the bench dismissed the appeal. Case Title: Keraleeyam Ayurvedic Resort v. The Commercial Tax Officer (Luxury Tax) Case Number: WA NO. 709 OF 2018Citation: 2025 LiveLaw (Ker) 196 Counsel for Appellant/ Assessee: Anil D. Nair Counsel for Respondent/ Department: V.K. Shamsudheen Click Here To Read/Download The Order

Ayurvedic Treatment Is Only Incidental To Facilities Provided By Assessee In Resort, Liable To Be Taxed: Kerala High Court

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Ayurvedic Treatment Is Only Incidental To Facilities Provided By Assessee In Resort, Liable To Be Taxed: Kerala High Court

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