TMI Blog1984 (4) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... arned judge, however, chose not to express any opinion on the points. To avoid remand and delay, we have heard the learned counsel on all the points. Mr. T. K. Pal, learned counsel for the writ petitioner respondent, submitted that (1) The impugned statute was in pith and substance, covered by Entry 31 of List I to the Seventh Schedule, and not by Entry 62 of List II. Hence, the State Legislature was not competent to enact it. (2) The statute violated the commerce clause enshrined in art. 301 of the Constitution and was void for transgressing its constitutional limitation on legislative power. (3) The Act infringed the fundamental right guaranteed by art. 19(1)(a) of the Constitution. 1. Legislative competence. For the writ petitioner, it was submitted that the subject-matter of the statute is covered by Entry 31 of List I which says : " 31. Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication." Learned counsel submitted that television was a form of communication like wireless broadcasting. It is a public utility service. Since it is covered by Entry 31 of List I, Parliament had exclusive jurisdiction to legislate on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms including export duties' would be wholly redundant. Entries 43 and 44 relate to incorporation, regulation and winding up of corporations. Entry 85 provides separately for corporation tax. Turning to List 11, Entries I to 44 form one group mentioning the subjects on which the States could legislate. Entries 45 to 63 in that list form another group and they deal with taxes. Entry 18, for example, is 'Land' and Entry 45 is 'Land revenue'. Entry 23 is 'Regulation of mines' and Entry 50 is 'Taxes on mineral rights'. The above analysis -and it is not exhaustive of the entries in the Lists-leads to the inference that taxation is not intended to be comprised in the main subject in which it might on an extended construction be regarded as included, but is treated as a distinct matter for purposes of legislative competence. And this distinction is also manifest in the language of article 248, clauses (1) and (2) and of Entry 97 in List I of the Constitution." The position was summed up in para 55 of AIR 1958 SC 468 (9 STC p. 341) by observing that under the scheme of the Entries in the Lists, taxation is regarded as a distinct matter and is separately set out. Similarly in State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the tax (namely, entertainment tax) was immaterial. It is equally well settled that when the validity of the exercise of power is in issue, it will be referable to jurisdiction which confers Validity upon it and not to a jurisdiction under which it would be nugatory, though the section is not referred to or a different or a wrong section of different provision was mentioned. Hazayi Wal Kuthiala v. ITO [1961] 41 ITR 12; AIR 1961 SC 200 (SC) at p. 202 and Municipal Corpn., Allahabad v. Ben Hiraben Manilal, AIR 1983 SC 537 at p. 539. In our opinion, even though the term " luxury " has not been used in the provisions of the Act, yet it is open to the learned counsel to submit that in pith and substance, the impugned Act levies tax on luxury within the meaning of Entry 62 of the State List. Having cleared the deck of the preliminaries, let us now examine the provisions of the Act. The impugned Act is entitled " The West Bengal Entertainment-cum-Amusements Tax Act, 1982." It came into force on April 1, 1983. The preamble to the Act states: " Whereas it is expedient to provide for the levy and collection of entertainment-cum-amusement tax on and from the holders of tele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear from s. 6(5) whereunder a person is entitled to refund of the tax if he satisfies the authority that he had not used the set throughout the year. The charging provision of the Act is clear. It creates liability on the fact of ownership or possession of the set, its user or non-user being immaterial. Section 6(5) relates to the mode of collection. It provides a measure of exemption or refund of tax paid. It has no material bearing to the creation of the liability of the tax. On the other hand, it affirms the liability, but gives a locus poenitentiae for refund on proof of certain facts. In our opinion, the tax is on the television set leviable on its holder. It is well settled that the primary guide for determining the nature of the tax is the charging section. Identification of the subject-matter of a tax is to be found in the charging section, i.e., the section which creates the liability to pay tax, as distinguished from the mode of assessment and the machinery by which it is assessed. (See Ralla Rain v. Province of East Punjab, AIR 1949 FC 81). In the same decision, the Federal Court rule that the intrinsic character of a tax is not to be determined by the mode of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessities. Modern examples are taxes levied on the purchase of jewellery, perfume and tobacco. ' It has further been said : 'In the 19th and 20th centuries, increased taxes have been placed on private expenditure upon alcohol, tobacco, entertainment and automobiles. Such expenditure is superfluous in the sense that a large part of it may be said to be in excess of what is required for economic efficiency and personal well-being, although the expenditure affects large numbers of people.' " It will be seen that in the context of Entry 62, the term " luxury has not been used in the sense of pertaining to the exclusive preserve of the rich. It was emphasised that the fact that the use of an article is popular among the poor sections of the population would not detract from its description or nature being an article of luxury. In other words, the term " luxury " has been used in Entry 62 to identify things which are other than the necessaries of life, which are superfluous and not indispensable or which are taken to with a view to enjoy, amuse or entertain ourselves. Applying this test, it is self-evident that a television set is not, from any point of view, a necessity of life ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied and normally this is to be ascertained from the charging provision. Considering the matter from this angle it cannot be gainsaid that the impugned statute levies tax on the article known as the television set and not on the activity of telecasting programmes. It is a tax on luxuries. Since we are of the opinion that the impugned statute levies tax on luxuries, it is not necessary to consider the further question whether the tax is on entertainment and amusement within the meaning of Entry 62. Article 19(1)(a)of the Constitution : The next submission of the learned counsel for the writ petitioner was that the impugned tax is an infringement of the petitioner's right to acquire information as a part of his right under art. 19(1)(a) as being an unreasonable restriction. The submission is misconceived. In the Bank Nationalisation case, AIR 1970 SC 564, it was held that the direct operation of the Act upon the fundamental right forms the real test. Indirect or ancillary effect is immaterial and irrelevant, Bennett Coleman and Co. Ltd. v. Union of India, AIR 1973 SC 106 (a decision relied on by the writ petitioner) accepts this test. In that case, the newsprint policy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the transmission of information inter-State is a form of intercourse. 3. The television can be brought within the meaning of the word 'intercourse' as used in article 301 of the Constitution. 4. By the impugned Act, tax is not actually sought to be imposed upon a television set but upon the programme which is telecast through the set. 5. The tax sought to be imposed by the Act is to augment the State's revenue. As such, it cannot be said to be in public interest, 6. The Act affects the freedom of intercourse through the media of television guaranteed under article 301 of the Constitution. 7. The Act is not saved by article 304 of the Constitution. The crucial finding is that the tax is on the programme that is telecast through the set. We are unable to agree with this finding. To recapitulate, the subject-matter of tax is to be gathered from the charging provision. It does not depend upon an indirect or remote effect of the levy. We have already held that the tax is on the holder of the television set. It is not on the activity of telecasting of the programme. It is, hence, incorrect to say that the Act affects the freedom of intercourse through the media of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates art. 301. The learned single judge did not go to that extent. The learned single judge has held that the tax sought to be imposed by the Act is to augment the State revenues and as such it cannot be for public interest. He observed (at p. 81 1) : " If the tax was imposed, e.g., to promote the television industry in West Bengal or to provide free television sets to educational institutions, or even if a part of the tax was utilised for such purpose, then it could be said that the tax was in public interest. " The power of taxation is one of the attributes of internal sovereignty of the State, just like the power of eminent domain whereunder the State can acquire private property for public purposes. Latham C.J. defined a tax : " A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not a payment for services rendered. " Mathews v. Chickory Marketing Board, 60 CLR 263 at p. 276. This observation was approved by the Supreme Court in Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Shri Shirur Mutt, AIR 1954 SC 282. In that case, Mukherjea J. held that a tax is a public impost with ..... 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