FEDERATION OF HOTEL & RESTAURANT ASSOCIATION OF INDIA, ETC. versus UNION OF INDIA & ORS.

FEDERATION OF HOTEL & RESTAURANT ASSOCIATION OF INDIA, ETC. versus UNION OF INDIA & ORS.

The Expenditure Tax Act, 1987, being in pith and substance a tax on expenditure, falls within the legislative competence of Parliament under Article 248 and Entry 97 List I; classification of hotels based on room charges is reasonable and not arbitrary with rational nexus to fiscal policy objectives; the Act does not impose unreasonable restrictions under Article 19(1)(g).

Parties
Petitioner: Federation of Hotel & Restaurant Association of India, etc.; Respondent: Union of India & Ors.
Jurisdiction
India
Judgment Date
02 May 1989
Procedural Posture
Writ Petition / Final Judgment
Outcome
petitions dismissed
Legal Topics
Legislative Competence, Classification Under Article 14, Restrictions Under Article 19(1)(g), Expenditure Tax, Luxury Tax
Constitutional Law Tax Law Legislative Competence Classification Under Article 14 Restrictions Under Article 19(1)(g) Expenditure Tax Luxury Tax

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Parties

Federation of Hotel & Restaurant Association of India, etc.

Petitioner

Union of India & Ors.

Respondent

Procedural Posture

Writ Petition / Final Judgment

Legal Issues

  1. 1 Whether Parliament had legislative competence to enact the Expenditure Tax Act, 1987
  2. 2 Whether the classification of hotels based on room charges was arbitrary and violative of Article 14
  3. 3 Whether the Act imposed unreasonable restriction on freedom of trade under Article 19(1)(g)

Ratio Decidendi

The Expenditure Tax Act, 1987, being in pith and substance a tax on expenditure, falls within the legislative competence of Parliament under Article 248 and Entry 97 List I; classification of hotels based on room charges is reasonable and not arbitrary with rational nexus to fiscal policy objectives; the Act does not impose unreasonable restrictions under Article 19(1)(g).

Court Disposition

petitions dismissed

Orders

  • Act upheld as constitutionally valid
  • No relief granted to petitioners