Law: Central Excise and Salt Act, (I of 1944)

Section: 3

Law: Constitution of Pakistan, 1973

Section: 199

(Central Excises and Salt Act (1 of 1944)].......S 3---Excise duty as levied on hotels---All service facilities and utilities including catering supplies and merchandise provided or rendered by a hotel would he subject to payment of excise duty---Amount of security deposit, however, does not fall either in the category of service facilities or utilities provided by hotel or return received in lieu thereof, and as such it could not be subjected to the charge of excise duty under Act I of 1944. (b) Central Excises and Salt Act (1 of 1944)--- ---S.3---Constitution of Pakistan (1973), Art. 199---Excise duty charged on security deposit found to he not justifiable in law ---Assessee's case was remanded to Authority for re-determination of the excise duty payable by him in accordance with law. ORDER SAEEDUZZAMAN SIDDIQUI, J.--This petition under Article 199 of the Constitution is filed by Messrs Taj Mahal Hotels Limited Karachi to challenge the order of respondent No.4 whereby the Shopping Arcade situated within the premises known as "Taj Mahal Hotel Complex" has been treated as part of the hotel business and excise duty has been assessed on the monthly rent, air-conditioning charges, telephone line rent, local calls, betterment tax and electricity charges received by the petitioner from shop keepers and cabin holders of Taj Mahal Hotel Complex. The respondent No.4 also imposed excise duty on the amount of Rs. 77,50,000 which was received by the petitioner by way of security deposit from the tenants occupying the shops and cabins in the Shopping Arcade. At the hearing of the petition the learned counsel for the petitioner stated that he is only challenging the levy of excise duty on the sum of Rs.77,50,000 which was received by the petitioner as security deposit from shop keepers and cabin-holders in the complex.-From the order of respondent No.4 it is quite clear that on the aforesaid amount of Rs.77,50,000 Excise Duty has been assessed on two grounds. Firstly, it was treated as a compensatory amount in view of low rent received by the petitioner from the shop keepers and cabin holders and secondly in view of subsections (12) and (13) of Section 12 of Income Tax Act…

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