In RAJAH HEALTHY ACRES(P)LTD. vs STATE OF KERALA, a division bench of the High Court of Kerala has upheld the levy of ‘luxury tax’ from hospitals as legally sustainable and intra vires the provisions of the Constitution. The court was considering the plea made by various hospitals against the levy of luxury tax, which had been imposed. The Kerala Finance Act 2008, brought certain amendments to the Kerala Tax on Luxuries Act,1976. The amendment brought into its purview of ‘luxury’ provided in a hospital and making it mandatory that every hospital having not less than five rooms for accommodation of patients and which charges Rs.1,000 or more per room, excluding the charges for medicine, food and professional services, to be registered under the provisions of the Act. These amendments were impugned on two counts: (i) It was beyond the scope of the legislative power to make an amendment to Entry 62 List II Of VII schedule of Constitution of India. (ii) Levy of luxury tax under the...