TMI Blog2009 (8) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... ls are not comparable to other class of cable TV subscribers who get access to large number of other channels and entertainment programmes. So much so, we do not find any substance in the allegation of discrimination pertaining to exclusion of subscribers who have taken only cable connection giving Doordarshan channels only. This contention also, therefore, fails and is rejected. The right to collect tax unlike in other statutes is not left to the discretion of the cable TV operators, but the statute makes it their duty to collect and remit the same to the Government. Thus the constitutional validity of the legislation upheld. - W.P. (C) Nos. 33966, 32816 of 2006 - - - Dated:- 27-8-2009 - RAMACHANDRAN NAIR C.N. AND ABDUL REHIM C.K. , JJ. The judgment of the court was delivered by C.N. RAMACHANDRAN NAIR J. The connected W.P. (C)s are filed by cable operators challenging the constitutional validity of the provisions introduced to the Kerala Tax on Luxuries Act, 1976 (hereinafter called, the Act ) by the Finance Act, 2006 with effect from April 1, 2006, authorising levy of luxury tax at the rate of Rs. 5 per connection per month to be collected and remitted by every cabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the State Legislature has no authority to introduce the tax on cable TV operator or on their subscribers under entry 62 of List II of the Seventh Schedule to the Constitution of India which gives authority to the State to levy taxes on luxuries, including taxes on entertainments, amusements, betting and gambling. In the first place, counsel relied on a decision of the Supreme Court in Godfrey Phillips India Ltd. v. State of U.P. reported in [2005] 139 STC 537; [2005] 2 SCC 515 and contended that a cable TV connection enjoyed by a customer cannot be termed a luxury enjoyed by the customer. The finding of the Supreme Court relied on by the counsel is the following: Hence on an application of general principles of interpretation we would hold that the word 'luxuries' in entry 62 of List II means the activity of enjoyment of or indulgence in that which is costly or which is generally recognised as being beyond the necessary requirements of an average member of society and not articles of luxury. It is worthwhile to note that the Supreme Court has mainly held that there can be no luxury in respect of a commodity which is not the case here because here tax is levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of entertainments and, therefore, within the legislative competence of the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution of India to make a law for the levy and collection of tax on such entertainments. In our view, it makes no difference whether the Legislature has treated cable TV connection, which essentially shows entertainment programmes, movies, etc., as an entertainment or a luxury because in either case the subject of legislation is within the powers of the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution of India. We, therefore, reject the contention of the petitioners that the legislation is beyond the legislative competence of the State under entry 62 of List II of the Seventh Schedule to the Constitution of India. The next contention raised by the petitioners is that the field is one occupied by Central legislation inasmuch as there is service tax payable by the cable TV operators for the services rendered by them to the subscribers. No doubt section 66 read with sections 65(22) and 65(105)(zs) of the Finance Act, 1994, provides for service tax on service rendered by cab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same or composite transactions may involve liability for service tax on services rendered and sales tax on sale of goods. If the ratio of the above decision is applied herein, then certainly the Central Government can levy service tax on the charges received by the cable service provider for the taxable services rendered by them and at the same time, the subscribers enjoying the luxury from the cable TV connection, could be made liable for payment of luxury tax. As already noted by us, the incidence of luxury tax is not on the cable operators, but under the Act they are just required to collect luxury tax along with charges payable to them by the subscriber and remit the same to the Government. We do not find the statutory duty cast on the cable operators for the collection and remittance of tax from the subscribers can be considered arbitrary as claimed by them because petitioners are regularly collecting charges from the subscribers every month and along with charges payable to them, they can recover the luxury tax also and remit the same to the Government. In view of our finding above that the petitioners cannot have any grievance against imposition of luxury tax which direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... els besides exhibiting large number of entertainment programmes of their own including movies, sports, etc. In fact, anybody installing a TV with antenna will have access to Doordarshan channels without any payment, whereas cable TV subscribers get access to pay-channels and lot of entertainment programmes shown by cable TV operators. Therefore, those who have access to only programmes from Doordarshan channels are not comparable to other class of cable TV subscribers who get access to large number of other channels and entertainment programmes. So much so, we do not find any substance in the allegation of discrimination pertaining to exclusion of subscribers who have taken only cable connection giving Doordarshan channels only. This contention also, therefore, fails and is rejected. Senior counsel appearing for the petitioners raised a contention that the definition of proprietor contained under section 2(h) of the Act is not amended to cover cable network operator to be covered under it and in view of this lacuna, levy is not permissible against the cable TV operator. We are unable to accept this contention because even without inclusion of cable TV operator under clause (h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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