Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2017 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 627 - HC - VAT and Sales TaxEntertainment tax - who is liable to pay - the grievance of the petitioner (MSOs) is that by virtue of the circular dated 17.12.2012 they are being foisted with the liability to collect and pay entertainment tax when, according to them, such liability/responsibility is that of the cable operators - also it is contended that the circular dated 17.12.2012 is, in any event, without the authority of law and cannot be sustained in view of the provisions of the said Act and the said Rules - Held that: - tax is levied on entertainment. It is not on the content provider or the content transporter or the person entertained. The subscriber may be the person on whom the incidence of the tax falls. But, that is not the subject matter of the tax. The tax is collected by the proprietor and paid to the Government in the manner prescribed. If there is any ambiguity or vagueness associated with any of the components of the tax which includes the person who is liable to pay the tax, then the validity of the tax/levy itself would be in jeopardy and if that was the case, then it would be for the Legislature to do the needful in the matter. Fortunately for us, the Legislative intent is clear as indicated above. It is only the circular dated 17.12.2012 which has brought in the ambiguity - Such ambiguity is impermissible in law particularly in the field of taxation. We do not understand as to how the Entertainment Tax Officer held the MSOs and LCOs jointly and severally responsible for payment of entertainment tax. It appears that because of the change over to the new system, the Entertainment Tax Officer was finding it difficult administratively to regulate the collection of taxes and it is perhaps for this reason that in the circular dated 17.12.2012, it is mentioned that ‘it would be ideal for the Department in the changed situation” to collect tax only through MSOs. The circular dated 17.12.2012 is without any authority of law. The respondents claim that the said circular has been issued in exercise of the powers u/s 46 of the said Act. That power is given to the Commissioner. We have not been shown any provision whereby the Entertainment Tax Officer derives its power from the Commissioner. In any event, the Commissioner can only issue directions which are not inconsistent with the provisions of the said Act or the Rules. MSOs to the extent that they directly provide cable service to the subscribers without the intervention of any LCO, would be regarded as the ‘proprietors’ u/s 7(1) and would be liable to collect and pay the entertainment tax to the Government. However, where the MSOs provide the service through the LCOs, the individual LCOs having their own subscriber networks, would be regarded as the proprietors in respect of their individual networks and would be liable to collect the entertainment tax and pay the same to the Government. Petition allowed - decided in favor of petitioner.
|