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2001 (3) TMI 871 - SC - VAT and Sales TaxWhether the State Legislature is competent to enact law to levy tax under entry 62 of List II of the Seventh Schedule on admission of cars/motor vehicles inside the drive-in-theatre? Held that:- Appeal allowed. In pith and substance the levy is on the person who is entertained. Once it is found there is a nexus between the legislative competence and subject of taxation, the levy is justified and valid. We, therefore, find that the State Legislature was competent to enact sub-clause (v) of clause (i) of section 2 of the Act. We accordingly hold that the impugned levy is valid. Thus the High Court fell in serious error in holding that sub-clause (v) of clause (i) of section 2 of the Act is ultra vires entry 62 of List II of the Seventh Schedule.
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