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M/s Radiant Satellite Private Ltd. Versus The Commercial Taxes Officer

2015 (5) TMI 913 - RAJASTHAN HIGH COURT

Levy of entertainment tax - Subscriber - Section 4AA of the Rajasthan Entertainment and Advertisement Act, 1957 - Applicability of the case of Purvi Communication [2005 (3) TMI 438 - SUPREME COURT OF INDIA] - Held that:- M/s Bhaskar Multinet (Private) Ltd. is also an MSO as its claim before the AO, DC(A) and so also the Tax Board has been that it is an MSO. The DC(A) so also the Tax Board in para 7 & 8 of the impugned order has reproduced the contention of M/s Bhaskar Multinet (Private) Ltd. whe .....

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e case of Purvi Communication P. Ltd. (supra), holds the field and I do not find any distinguishing features in between the facts in the instant cases viz-a-viz the facts in the case of Purvi Communication P. Ltd. (supra) - Decided in favour of Revenue. - S.B. Sales Tax (VAT) Revision Petition No.96 to 107/2012, S.B. Sales Tax (VAT) Revision Petition No.7 to 28/2011, S.B. Sales Tax (VAT) Revision Petition No.140 to 151 /2012 - Dated:- 8-5-2015 - Hon'ble Mr. Justice J. K. Ranka,J. For the App .....

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et, ld. counsel for the Revenue contended that the issue in the present bunch of petitions is identical and similar to the one decided by the coordinate Bench of this Court at principal seat, Jodhpur in the case of M/s Sky Media (P) Ltd. Vs. Asstt. Commissioner, Commercial Taxes: SB Sales Tax Revision No.263/2012, decided on 16/02/2015 and therefore, in the light of the said judgment, the present matter is required to be considered. 3. Brief facts are that the assessees namely; M/s Radiant Satel .....

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ntertainment tax. The AO held that in view of the amended definitions and charging provisions contained under Section 4AA of the Act, 1957, the proprietor of cable TV network, providing cable services, shall also be liable to pay the entertainment at the rate not exceeding ₹ 600/- per subscriber every year and at such rates the State Government may notify from time to time in the Official Gazette. The AO, in the light of the judgment of the Apex Court in the case of State of West Bengal Vs .....

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cable connection with their names and addresses but despite being granted reasonable time and sufficient opportunities, the assessee (MSO) neither filed the monthly details in the prescribed Form-5 nor did it provide the requisite information. On the contrary, it was claimed by the assessee before the AO that it is not providing any entertainment to the subscribers through the cable network at the place of their choice and thus, the notification dt.08/03/2006 has no applicability on the assesse .....

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lusion that the assessee is the proprietor of the cable television network and as per Section 4AA of the Act and in the light of the notification and amendment dt.08/03/2006, the entertainment tax is levied @ ₹ 20/- per subscriber for the entertainment services being provided through cable operators by the assessee (MSO). Since the requisite information namely; names and addresses of the cable subscribers were not provided but only names of 189 cable operators were provided, therefore, adv .....

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Purvi Communication (supra) was based on West Bengal Entertainment-cum-Amusement Tax Act, 1982 whereas the Act of Rajasthan was separate. 5.1 The Revenue carried the matter in appeal before the Tax Board, who, after analyzing the material available on record and considering the amendments made in the Entertainment Tax Act particularly Section 3(5) by the Rajasthan Finance Act, 2011 with retrospective effect from 25/2/2008 and in the light of the judgment rendered by the Hon'ble Apex Court in .....

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the order of the DC(A) and sustained the order of the AO. Hence petitions by the assessee. 6. In the case of M/s Bhaskar Multinet (Private) Ltd., the matter was carried in appeal before the DC(A), who upheld the view of the AO by holding that the judgment rendered in the case of Purvi Communication (supra) is wholly applicable and that the assessee is one who is receiving signals from satellite and the same are being transmitted to sub-cable operator and through the sub-cable operator, it is tra .....

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s contained in the Act, 1957, allowed the appeals filed by the assessee and quashed & set aside the order passed by the DC(A) vide order dt.29/10/2010. Hence petitions by the Revenue-department. 7. Thus, on the one hand, in the case of M/s Radiant Satellite Private Ltd, the Tax Board upheld the order passed by the AO and therefore, the assessee (MSO) has filed these petitions, while in the case of M/s Bhaskar Multinet (Private) Ltd., on the other hand, the Tax Board has allowed the appeal of .....

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see does not fall within the notification dt.08/03/2006 and cannot be said to be the proprietor and once the assessee is not a proprietor, the question of invoking provisions of Section 4AA of the Act, 1957 does not arise. It was further contended that the judgment of the Hon'ble Apex Court in the case of M/s Purvi Communication (supra) was based on the definition as contained under the West Bengal Entertainment-cum-Amusement Tax Act, 1982 and the said definition is totally inapplicable on t .....

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6-2007 on 08/03/2006, had granted such concessions/relaxations but the same has not been considered. It was further contended that under the West Bengal Entertainment-cum-Amusement Tax Act, 1982, sub-cable operator means "a person, other than any owner or person who is a cable operator referred to in the sub-section, who, on the basis of an agreement, contract or any other arrangement made between him and such cable operator, receives signals from such cable operator and provides cable serv .....

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or sets or a holder of a video cassette player set or set top box, in addition to the tax referred to in section 4 whereas under the Act, 1957, Section 4AA provides that the proprietor of a cable television network providing cable service shall be liable to pay entertainment tax at such rates not exceeding rupees six hundred per subscriber for every year, as the State Government may, from time to time, notify in the Official Gazette, in this behalf and accordingly, in the light of the aforesaid, .....

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ed by this Court in the case of M/s Sky Media (P) Ltd. (supra) has not considered several issues and has been decided on its peculiar facts. 9. Per-contra, ld. counsel for the Revenue contended that the AO has come to a correct conclusion and certainly the assessee is a proprietor and squarely falls within the notification dt.08/03/2006 and Section 4AA of the Act, 1957. She further contended that in so far as the charging section is concerned, it is not under challenge as the vires has not been .....

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Commissioner, Commercial Taxes (supra) has also considered all the submissions raised by counsel for the assessee and has analyzed every judgment and the same very definitions and the question as to who can be said to be a proprietor has been adequately considered and answered and contended that when this Court has already come to a conclusion on the same material,same facts, same Act, same Notifications and same definitions then in the light of the said judgment, nothing survives. 10. I have h .....

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e case so also the coordinate Bench of this Court at Principal Seat, Jodhpur in the case of M/s Sky Media (P) Ltd. (supra) and the judgment rendered by the Hon'ble Apex Court in the case of Indusind Media & Commun. Ltd. (supra) and in my view, the controversy in the instant petitions is identical and same, which has been considered by this Court in the case of M/s. Sky Media (P) Ltd. (supra) and I am not persuaded with the arguments advanced by counsel for the assessees, as no distinguis .....

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ifies that the proprietor of direct to home broadcasting service shall be liable to pay entertainment tax at the rate of 10% of the subscription charges as per subscriber. [No.F.12(15)FD/Tax/2008- 91] By order of the Governor, (Rajat Kumar Mishra) Secretary to Government" 13. It would also be appropriate to quote sub-sections 3(4A), Section 4AAA, Rules 18BBBB and Rules 18BBBBB:- "Section (4A) "direct to home broadcasting service" means distribution of multi channel television .....

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tem or otherwise, other than entertainment to which section 4 applies, at such rates not exceeding twenty percent of the payment for admission for every subscriber, as the State Government may, notify in this behalf. (2) Notwithstanding anything contained in sub section (1), the State Government may fix the rates of tax for the tax payable under this section a fixed amount, as may be notified but not exceeding rupees fity, per subscriber per month or part thereof. (3) Nothing in sub section (1) .....

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y hotels and restaurant." Section 4AAA. "Levy of tax on direct to home broadcasting service- The proprietor of a direct to home broadcasting service shall be liable to pay entertainment tax at such rates, not exceeding twenty percent of the monthly subscription charges per subscriber, as the State Government may, from time to time, notify in the Official Gazette, in this behalf and different rates may be notified for different categories of subscribers." Rules 18BBBB-"Permiss .....

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which may be so required by the Commissioner." Rules 18BBBBB- "Payment of tax for direct to home broadcasting service. (1) The proprietor of a direct to home broadcasting service liable to pay tax in accordance with section 4AAA of the Act, shall maintain a true and correct record of the number of subscriber, the amount received from each subscriber and the amount of tax. (2) The proprietor of a Direct to Home broadcasting service shall be required to deposit tax payable within seven d .....

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Act of 1957 read with Rules 18BBBB and 18BBBBB of the Rajasthan Entertainments & Advertisements Rules, 1957 (for short, 'Rules of 1957') and this Court in DB Civil Writ Petition No.6012/2011, Tata Sky Ltd. Vs. The State of Raj. & anr. vide order dt. 19/08/2014 held that the State Legislature had legislative competence to levy entertainment tax on all payments for admission to an entertainment through direct-to-home (DTH) and had rejected the claim of the aforesaid assessees. It i .....

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zing the above controversy, this Court, in the case of M/s Sky Media (P) Ltd. (supra) framed the following question:- "Whether the assessee M/s Sky Media (P) Ltd. Jodhpur, a Multi System Operator (MSO), falls within the definition of 'Proprietor' and the charging provision of the Rajasthan Entertainments & Advertisements Act, 1957 and is liable to pay entertainment tax on the satellite signals or electronic TV signals provided to the cable operators, who further transmit the sam .....

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rator, will clearly fall within the ambit and scope of the definition Proprietor' read with the charging provision of Section 4AA of the amended law, irrespective of the fact that there is no separate definition of such MSO, cable operator or sub-cable operator in the Rajasthan Act. A closer scrutiny of the definition of Proprietor', who falls within the tax net under the said law would reveal that even MSO like the present assessee is undoubtedly a person connected with the organization .....

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of the chain of persons or agencies or organization providing such entertainment and since the definition of the "Proprietor" clearly covers such an assessee, therefore, it cannot be contended, as has been contended by the assessee, that in the absence of a specific definition in the definition clause of cable operator or Multi System Operator, they would not fall within the tax net. There is another angle to counter the argument of learned counsel for the assessee. While reading the .....

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uot; qua MSO, a service provider or entertainment provider or a proprietor providing such entertainment. Thus, by a harmonious reading of the definitions, the chain of agencies or persons providing entertainment is clearly established in the amended definitions inserted in the Act of 1957. The details of such amendments brought from time to time in the Rajasthan Entertainment & Advertisement Tax Act, 1957 having relevance for Cable Network Service are enumerated below for ready reference:- S .....

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ice" & DTH Rajasthan Finance Act, 2011 25.02.2008 4 Section 3(6) Definition of "Entertainment Tax" From the inception of the Act of 1957 From the inception of the Act of 1957 5 Section 3(8) Definition of "Proprietor" From the inception of the Act of 1957 From the inception of the Act of 1957 6 Section 3[11(A))] Definition of "Subscriber" inserted Rajasthan Finance Act, 1999 26.03.1999 7 Section 4AA Levy of "Tax on cable service" Rajasthan Finance .....

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the assessee would fall within the scope of charging provision of the Act of 1957, under the retrospectively amended provisions of the Act and the present assessees would also fall within the definition of 'Proprietor' as defined under Section 3 (8) of the Act and is liable to pay entertainment tax under the charging provisions of Section 4AA of the said Act of 1957. 18. The above clearly brings out the actual facts of the instant two assessees and on analyzing the facts viz-a-viz the ju .....

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it has been categorically admitted that it is MSO. Therefore, once it is an admitted fact, then in the case of M/s Bhaskar Multinet (Private) Ltd. as well, the aforesaid judgments hold good. 20. In my view, the judgment of the Hon'ble Apex Cort in the case of Purvi Communication P. Ltd. (supra) has rightly been applied by the Tax Board in the case of M/s. Radiant Satellite Private Ltd. and by this Court in the case of M/s Sky Media (P) Ltd. (supra) and thus the judgment in the case of Purvi .....

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f the case, in our opinion, the High Court was justified in confirming the order passed by the Mamlatdar dated 18th October, 1999. Two issues arise for our consideration in the present appeals viz.: (i) Whether the appellants, who are Multi System Operators, are liable to pay Entertainment Tax, and (ii) Whether the facts and circumstances of the case warrant imposition of penalty on the appellants. The first issue is no longer res integra as this Court, in the case of State of West Bengal V. Pur .....

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