TMI Blog2013 (4) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government. In that regard, it is stated on behalf of the appellant, that in 1991 the Government of India appointed a Tax Reform Committee under the Chairmanship of Dr. Chelliah. The recommendations made by the Tax Reform Committee were accepted and the service tax was introduced in the budget for the year 1994- 1995 through the Finance Act, 1994 under the residuary entry 97 of List 1 of the 7th Schedule of the Constitution of India. Under the Act, service tax is levied on the notified services provided or to be provided. 5. For the purpose of levy of service tax on broadcasting, the expression broadcasting has been defined specifically under section 65(15) of the Finance Act. The broadcasting services were brought within the purview of the service tax under section 65(105)(zk) of the Finance Act, 1994 as amended with effect from July 16, 2011. Later on, DTH service was brought within the purview of the service tax with effect from June 16, 2006. 6. Under section 67 of the Finance Act, the value of taxable service is the gross amount charged by the service provider for provision of service. 7. On March 24, 2006, the appellant got a licence from the Government of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. (63) B-5-9-2006-2-V- In exercise of the powers conferred by sub section (1) of Section 3 of the Madhya Pradesh Entertainment Duty and Advertisements Tax Act 1936 (No 30 of 1936) the State Government hereby prescribed the rate of Entertainment Duty at 20 percent in respect of every payment for admission to an Entertainment other than Cinema, Video Cassette Recorder and Cable service. This notification shall come into force with effect from the date of publication. By order and in the name of the Governor of Madhya Pradesh. 12. Following the notification dated May 5, 2008, a demand notice dated June 10, 2009 was issued by the Excise Commissioner Madhya Pradesh, Gwalior, to the appellant. The contents of the notice, insofar as relevant for the present, are as under: S.No.7-Ent./2009-10/173 Gwalior Date 10.06.2009 To, Tata Sky, Sub: Levy of Entertainment Duty on Direct to Home Entertainment Service You are providing entertainment in the State of Madhya Pradesh by Direct to Home (DTH) to registered consumers on monthly payment basis. Whereas: 1. Under section 3(1) of the Madhya Pradesh Entertainment Duty and advertisements Tax Act, 1936 except cinema hal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No.10148 of 2009, challenging the demand and collection of entertainment duty at the rate of 20 percent under section 3(1) of the 1936 Act. The writ petition was eventually dismissed by the High Court by its judgment and order dated August 20, 2010 and the matter is now brought to this Court. 18. Before proceeding further, it needs to be stated that the controversy in all the appeals relates to the demand and realization of entertainment tax under the 1936 Act, which means for the period between the commencement of operation by the appellant in the year 2006 and March 31, 2011, i.e., the day prior to the coming into force of the new Act, called the Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adiniyam, 2011. Further, in course of hearing of the appeals Mr. Dave learned counsel appearing for the State of Madhya Pradesh submitted that he proposed to defend the demand and realization of the impugned tax only for the period between May 5, 2008, the date of the notification issued under section 3(1) of the 1936 Act and the coming into force of the new Act on April 1, 2011. It is, therefore, made clear that this judgment deals with the question of levy of entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny payment for seats or other accommodation in any form in a place of entertainment; ii) any payment for a programme or synopsis of an entertainment; iii) any payment made for the loan or use of any instrument or contrivance which enables a person to get a normal or better view or hearing or enjoyment of the entertainment, which without the aid of such instrument or contrivance such person would not get; iv) any payment made by a person by way of contribution or subscription or installation and connection charges or any other charges, by whatever name called, for providing access to any entertainment, whether for a specified period or on a continuous basis; v) any payment, by whatever name called for any purpose whatever, connected with an entertainment, which a person is, required to make in any form as a condition of attending, or continuing to attend the entertainment, either in addition to the payment, if any, for admission to the entertainment or without any such payment for admission; vi) any payment, made by a person, who having been admitted to one part of a place of entertainment is subsequently admitted to another part thereof, for admission to which a paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment to represent the right of admission to entertainment in respect of which the entertainment duty is payable. (4) xxx (i) xxx (ii) xxx 29. Section 3-A deals with entertainment duty payable by proprietor of V.C.R. or V.C.P. and this provision was inserted in the Act with effect from May 1, 1999. 30. Section 3-B was inserted in the 1936 Act with effect from April 1, 2001. Sub-section (1) of section 3-B deals with entertainment duty payable by cable operator and it makes a cable operator, providing access to entertainments through cable service to subscribers of such service, not being owner or occupants of rooms of hotel or lodging house, liable to pay duty at the rate of twenty rupees per month per subscriber in urban and cantonment areas. Sub-section (2) of section 3-B makes every proprietor of hotel or lodging house, providing access to entertainments in the rooms of a hotel or lodging house through the cable service of his own or obtained through any cable operator liable to pay a consolidated amount of duty per month determined on the basis of number of rooms. 31. Section 3-C deals with levy of Advertisement Tax. 32. The machinery for effectuating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 8 provides the rule making powers. Section 9 gives the power of entry and inspection and section 9-A makes production and inspection of accounts and documents obligatory. Section 10 deals with recovery of arrears of entertainment duty. Section 10 provides protection to persons acting in good faith and bars any suit or prosecution or other proceedings against officers and servant of the Government. Section 11 deals with delegation of powers and section 12 bars imposition of entertainment duty by any local authority. 35. On a careful examination of the 1936 Act as a whole, and more particularly on a conjoint reading of clauses (a) [ Admission to an entertainment ], (b) [ Entertainment ] and (d) [ Payment of admission ] along with section 3 creating the charge and section 4 providing the collection machinery, we find ourselves in agreement with the submission made on behalf of the appellants that the provisions of 1936 Act are applicable only to place-related entertainment. In other words, 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck to section 2(b) and finally to section 2(a). 38. We have held that DTH is not covered by the provisions of section 3 read with section 2(a), 2(b) and 2(d) of the 1936 Act. The issue gets further settled on reference being made to the mechanism of collection of the charge as provided under section 4 of the 1936 Act. Section 4(1) mandates that no person shall be admitted to any entertainment other than entertainment by V.C.R. except with a ticket stamped with an impressed, embossed, engraved or adhesive stamp issued by the State Government of nominal value equal to the duty payable under section 3; sub-section (2) of section 4 provides for different modes specified thereunder for payment of the amount of duty due on the entertainment. Neither the provision of section 4(1) nor any of the modes provided under section 4(2) can be made applicable for collection of duty on DTH operation. Further, it is noted above that section 8 provides rule making powers. In exercise of the powers under that provision the Madhya Pradesh Entertainment Duty and Advertisement Tax Rules 1942 were framed. A perusal of the Rules makes it absolutely clear that the collection mechanism under the 1936 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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