TMI Blog2011 (1) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 3 read with first proviso of sub-section (2) of section 3 of the Act. Meaning thereby that the publication of a draft notification has been dispensed with for fixation of rate of entertainment duty. Thus, the argument that the draft notification was not published, is not tenable as the same was expressly dispensed with. - 19345,19368, 20002,2000320005 of 2004 & 443 of 2005 - - - Dated:- 3-1-2011 - HEMANT GUPTA AND RAJESH BINDAL , JJ. APPENDIX [The decision of the Division Bench of the Punjab and Haryana High Court consisting of Hemant Gupta and Rajesh Bindal JJ. in Chrysalis International (P) Ltd. v. State of Haryana and others (C.W.P. Nos. 19345, 19368, 20002, 20003 and 20005 of 2004 and 443 of 2005 decided on August 29, 2008) is printed below: ] HEMANT GUPTA J. This order shall dispose of Civil Writ Petition Nos. 19345, 19368, 20002, 20003 and 20005 of 2004 and 443 of 2005, challenging the levy of entertainment duty under the Punjab Entertainments Duty Act, 1955 (for short, the Act ) as applicable to the State of Haryana. In C.W.P. No. 19345 of 2004, the petitioner is a private limited company, which has introduced and started a new activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment; . . . (i) 'ticket' means the pass or token for the purpose of securing admission to an entertainment. 3.. Duty on payments for admission to entertainment. (1) A person admitted to an entertainment shall be liable to pay an entertainments duty at a rate, not exceeding one hundred and twenty five percent of the amount of payment for admission which the Government may specify, by a notification in this behalf, and the said duty shall be collected by the proprietor and rendered to the Government in the manner prescribed. It may be noticed that the tax at 125 per cent has since been reduced to 25 per cent vide notification dated June 29, 2001 in respect of other entertainments other than picture, cinematography exhibitions. In the writ petition filed by M/s Chrysalis International (P) Ltd., the petitioner has relied upon an order passed by the honourable Supreme Court on November 1, 2002, whereby the matter was remitted back to the appellate authority under the Act in the case of petitioner itself. The learned counsel also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out that the petitioner has established entertainment centre within its premises and is engaged in games/sports offered to be played by the visitors on payment of fixed but different rates of admission. It is alleged that the activity of the petitioner is fully covered under the term entertainment . It has been further pointed out that the definition of the term entertainment is inclusive and not exclusive, which means that the term entertainment could be expanded to various other type of entertainments which were similar to the entertainment of various types mentioned in section 2(d) of the Act. Thus, it was pointed out that the petitioners are liable to pay the entertainment duty on account of playing of the game of Go-Karting . In Geeta Enterprises' case [1983] 4 SCC 202; AIR 1983 SC 1098, the petitioner has installed a machine with the video screen in its parlour. The petitioner permitted the persons to enter the premises without any charge to view a show on the video which consisted mainly of sports, games, etc., played on the screen of the video. According to the petitioner he did not charge any admission fee, but the electronic machines imported from Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e honourable Supreme Court was seized of the question of payment of entertainment duty from the visitors to a theatre. It was found that even where the ticket is not issued for an individual show but payment is received by means of a lump sum as subscription or contribution to any society, or by season ticket or for the right of admission to a series of entertainments or during a certain period of time, or for any privilege, right, facility, thing combined with the right of admission to any entertainment without further payment or at a reduced charge, the entertainment duty is payable on the lump sum. In Commissioner of Income-tax v. Patel Brothers and Co. Ltd. [1995] 215 ITR 165 (SC); AIR 1995 SC 1829, the word entertainment appearing in section 37 of the Income-tax Act, 1961, was found to connote something which may be beneficial for the mental or physical well being but is not essential or indispensable for human existence. A bare necessity, like ordinary meal is essential or indispensable and, therefore, is not entertainment. If such bare necessity is offered by another, it is hospitality but not entertainment. Having heard learned counsel for the parties at some leng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onourable Supreme Court in Geeta Enterprises' case [1983] 4 SCC 202; AIR 1983 SC 1098, we shall broadly examine each activity undertaken by the petitioners for the purposes of examining whether such activity is liable for entertainment duty. Firstly, we will examine the activity of Go-Karting which is subjectmatter of C.W.P. Nos. 19345 and 19368 of 2004. In Go-Karting, the player pays fixed amount for playing the game for a limited time. By playing the game on a machine to be provided by the petitioner, he is entertaining himself and thus, the test No. 4 as laid down by the honourable Supreme Court in Geeta Enterprises' case [1983] 4 SCC 202; AIR 1983 SC 1098 is satisfied. As per the said condition, the operator, who himself feels entertained by playing the game of Go-Karting is also entertaining himself and thus, liable to pay entertainment duty. The other condition, i.e., the game is open to public is not disputed. Similarly, the playing of the game of Go-Karting may involve some skill, but it also provides amusement to the operator of the game. The activities of bowling alley, video games, billiards and pool table, subject-matter of C.W.P. Nos. 20002, 20003 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the petitioner, though the duty has been reduced to 25 per cent vide notification dated June 29, 2001. In respect of the said argument, suffice it to say that prior to notification dated June 29, 2001, the entertainment duty was 125 per cent but the same was reduced to 25 per cent on June 29, 2001. Therefore, prior to June 29, 2001, the entertainment duty at 125 per cent would be payable, but thereafter, it would be payable at 25 per cent. Another argument raised is that the notification imposing entertainment duty at 125 per cent was not published keeping in view the provisions of section 3 of the Act. It is also contended that there was no draft publication of the notification as contemplated in sub-section (2) of section 3 of the Act and therefore, the levy of duty at 125 per cent or 25 per cent is in contravention of the statutory provisions. The file pertaining to levy of 125 per cent entertainment duty in terms of the notification dated September 1, 1977, is admittedly not available, in view of the averments made in the written statement itself. The proviso to sub-section (2) of section 3 of the Act, contemplates that if the Government considers that an order specif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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