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2013 (4) TMI 373 - SC - Service TaxDemand of entertainment tax on DTH (direct to home) broadcast provided to the respective customers on payment of subscriptions - whether on the basis of the provisions of the 1936 Act, it is permissible or possible for the State of Madhya Pradesh to levy on what in the lexicon of broadcasting is called direct-to-home or in short DTH - Held that:- On a careful examination of the 1936 Act as a whole, and more particularly on a conjoint reading of clauses “Admission to an entertainment”,“Entertainment” and “Payment of admission” along with section 3 creating the charge and section 4 providing the collection machinery, agreement with the submission made on behalf of the appellants that the provisions of 1936 Act are applicable only to place-related entertainment. Thus the provisions of the 1936 Act cover an entertainment which takes place in a specified physical location to which persons are admitted on payment of some charge as defined under clause (d) of section 2 of the 1936 Act. On behalf of the State the imposition of levy on DTH justified on the basis of sub-clause(4) of clause (d) of section 2 is untenable as section 2(d)(iv) is only the measure of tax and it does not create the charge which is created by section 3. Under section 3 read with section 2(d) and section 2(a), the charge or levy of tax is attracted only if an entertainment takes place in a specified place or locations and persons are admitted to the place on payment of a charge to the proprietor providing the entertainment. In the present case, as DTH operation is not a place-related entertainment, it is not covered by the charging section 3 read with section 2(a) and 2(b) of the 1936 Act. Consequently, the question of going to section 2(d)(iv) does not arise. Moreover, even if section 2(d)(iv) is to be read as an extension of section 3 and, thus, as a part of the charge, it does not make any difference at all because section 2(d)(iv) refers to “entertainment” which takes us back to section 2(b) and finally to section 2(a). The machinery for collection of duty provided under the 1936 Act has no application to DTH. It is well settled that if the collection machinery provided under the Act is such that it cannot be applied to an event, it follows that the event is beyond the charge created by the taxing statute. See: Commissioner of Income Tax v. B.C. Srinivasa Setty, (19811981 (2) TMI 1 - SUPREME COURT), Commissioner of Income-Tax Ernakulam, Kerala v. Official Liquidator, Palai Central Bank Ltd.. (1984 (10) TMI 41 - SUPREME COURT), PNB Finance Limited v. Commissioner of Income Tax I, New Delhi (2008 (11) TMI 7 - SUPREME COURT) Thus the 1936 Act cannot be extended to cover DTH operations being carried out by the appellants.
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