KOCHI: The Kerala High Court on Tuesday observed that the State Government’s decision to levy the ‘Mangalya Nidhi’ cess on weddings and the associated celebrations conducted at hotels classified in the three-star category and above was unconstitutional.
Justice K Vinod Chandran passed the order on a batch of petitions filed by owners of auditoriums in the Kollam and Kasargod districts, challenging the decision to collect Mangalya Nidhi cess from them.
In the 2013 Budget, the Finance Minister had introduced a 3 per cent cess on the expenses related to celebrations held in connection with marriages. While passing the Finance Act, the cess was changed substantially, and a fixed slab was introduced at `10,000 for AC auditoriums and `5,000 for non-Ac auditoriums in the corporation and municipal areas. Cess of `7,500 and `3000 were levied in panchayat areas, for AC and non-AC auditoriums, respectively.
The cess is applicable to conference halls in all star hotels and auditoriums with seating capacity of more than 500 persons. The petitioners challenged levy of the cess, alleging that it was a tax on marriage, for which the State legislature lacked jurisdiction. They said that the functions related to marriages were part of religious and pious ceremonies, and that the cess would offend the freedom of practicing religion.
However, the government contended that the cess was levied not in the nature of any tax, but was simply a fee on the person who conducts celebrations in relation with marriages, and that the fund generated from the cess would be utilised for constituting a Mangalya Nidhi Fund for providing financial help to members of poor families for conducting marriages. According to the petitioners, there are marriage halls attached to churches, temples, mosques and other religious institutions, which do not fall under the category and do not come under the purview of the tax. “Hence, the classification is arbitrary and discriminatory, which also makes the cess unconstitutional,” the petitioners said.
The court observed that the legislation was ultra-vires of the power of the State legislature as conferred by the Constitution of India. “Hence, the State has no right to levy and collect the cess. The levy definitely is not a fees and can only be treated as a tax,” court held.