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2015 (9) TMI 779

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..... n DTH services, the field having been occupied by the Entry 97 read with Entry 31 of List I of the Constitution of India cannot be accepted. Regarding double taxation on the same transaction - Held that:- There seems to be some misconception on the part of the petitioners to assume that there is only one event involved in the present case i.e. the Direct-To-Home (DTH) Broadcasting Service. It is the "entertainment" derived from the content that is the subject matter of tax - entertain tax under the Act and not the service of enabling the flow of content to Direct-To-Home (DTH) system. In a given case two concepts may be intertwined, the strands can easily be separated by employing the Aspect Theory and in respect of the service aspect, the taxable event is entertainment from the content. The ration of the decision in the case of Bharat Sanchar Nigam Limited [2006 (3) TMI 1 - Supreme court], shall not be applicable in the context of "entertainment" and "service", which are present in the instant case. While applying the "Aspect Theory" in the present case, the subjects which in one aspect and for one purpose fall within the powers of a particular Legislature, may in another a .....

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..... her prayed to issue appropriate writ directing the respondents not to levy tax, fees or duty under the Act and the Rules on the DTH Broadcasting Services provided by the respective petitioners in the State of Gujarat and to quash and set aside the impugned notices received by the respondent No.2 for recovery of entertainment tax. [3.0] For the sake of convenience, facts in Special Civil Application No.3430/2010 are narrated as the facts with respect to other petitioners are identical and similar. [3.1] It is the case on behalf of the respective petitioners that they provide DTH Broadcasting Services to subscribers across India. That the respective petitioners are DTH service providers having been granted license under section 4 of the Indian Telegraph Act, 1885 and the Indian Wireless Telegraphy Act, 1933 by the Government of India, Ministry of Information and Broadcasting to establish, operate a DTH platform and provide DTH Services. That the Central Government charges the petitioners service tax under the provisions of the Finance Act, 1994 and 2001 as amended from time to time. [3.2] That Indian Government on 15.03.2001 issued Guidelines for obtaining license for provid .....

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..... is for the whole of India and the petitioners are not required to get any permission / any other license from any of the authority for providing DTH Broadcasting services. It is the case on behalf of the petitioner that even otherwise, broadcasting is a subject matter which falls exclusively within the domain of the legislative competence of Union and States have absolutely no jurisdiction on the subject matter. [3.5] That the Act came to be amended by the State Legislature vide Act No.11 of 2009, which received the assent of the Government on 29.07.2009 and the said Act has come into force w.e.f. 01.08.2009. That as per section 6E of the Amended Act, notwithstanding anything contained in sections 3, 4, 6, 6A or 6B or any other provisions of the said Act, there shall be levied and paid, by the proprietor of every Direct-To-Home (DTH) Broadcasting Service, to the State Government, the entertainments tax, per television set which receives radio frequency signals for exhibition of films or moving pictures or series of pictures with the aid of a set top box or any other apparatus attached to it for securing transmission through Direct-To-Home (DTH) Broadcasting Service, a tax at th .....

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..... hereinafter. [4.0] Shri S.N. Soparkar, learned Senior Advocate has appeared with Shri Amar Bhatt, learned advocate appearing on behalf of the petitioner of Special Civil Application No.3430/2010 - Tata Sky Limited. Shri Sandip Laddha, learned Counsel has appeared with Shri Chetan K. Pandya, learned advocate appearing on behalf of the petitioner of Special Civil Application No.3539/2010 - Bharat Business Channel Ltd.; Shri Deven Parikh, learned Senior Advocate has appeared with Shri Chetan K. Pandya, learned advocate appearing on behalf of the petitioner of Special Civil Application No.4025/2010 - Dish TV India Ltd.; Shri Shalin Mehta, learned Senior Advocate has appeared on behalf of the petitioner of Special Civil Application No.3982/2010 - M/s. Bharti Telemedia Ltd. and Shri Kunal P. Vaishnav, learned advocate has appeared on behalf of the petitioner of Special Civil Application No.3599/2013 - Sun Direct TV Private Limited. All these petitions are opposed by Shri Kamal Trivedi, learned Advocate General appearing with Ms. Sangita Vishen, learned AGP appearing on behalf of the State of Gujarat. [5.0] Shri Soparkar, learned Counsel appearing on behalf of the petitioner of Spe .....

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..... th Entry 31 of List I of the Constitution of India. It is submitted that therefore the method of entertainment tax would amount to double taxation which is not permissible in law. [5.4] It is further submitted that the State Government has no legislative competence under Entry 62, List II read with Article 246(3) of the Constitution of India, to impose entertainment tax on entertainment that is not in a place of public and because the provision, in pith and substance, is within Entry 92C of List I and therefore beyond the legislative competence of the State, although it must be stated that during the hearing it has been pointed out that Entry 92C of List I is yet to be notified and therefore not in force. [5.5] It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that even otherwise the DTH services cannot be said to be providing entertainment . It is sumbitted that therefore the DTH services cannot be said to be providing entertainment . [5.6] It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that objective of the Gujarat Entertainment Tax Act, 1977 is to levy entertainment tax on t .....

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..... . It is submitted that the definition of entertainment events in section 66(24) refers to the exhibition of cinematographic films, circus, concerts etc. all of which are events in public places. It is further submitted that the budget speech of the Finance Minister for the year 2012-13 states that the negative list has been carefully drawn up keeping in view the federal nature of our polity . It is submitted that therefore it is clear that the service tax is excluded on the matters which are within in the legislative competence of the States, and imposed on matters which are outside it. It is submitted that the aforesaid indicate that the word entertainment is a reference only to entertainment in places of public resort. [5.12] It is further submitted Shri Soparkar, learned Counsel appearing on behalf of the petitioner that in the case of M/s. Tata Sky Ltd. v. State of M.P., the Hon'ble Apex Court observed that the rules framed under the Madhya Pradesh Entertainment Duty and Advertisement Tax Act of 193 cannot be extended to cover DTH operations being carried out by the petitioners. It is further submitted that in the aforesaid decision the Hon'ble Supreme Court ha .....

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..... ld that the levy of entertainment tax on DTH Broadcasting services suffers from arbitrariness in classifying DTH as a separate class from Section 4E / Cable TV for adopting a different rate of tax. [5.14] It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that even as held by the Hon'ble Supreme Court in the case of Federation of Hotel Restaurant Association of India v. Union of India reported in (1989)74 STC 109 , the classification must be rational, based on some qualities and characteristic which are to be found in all the persons grouped together and absent in the others left out in the class. It is submitted that the differential rates must have a rational nexus with the object sought to be achieved by the law. [5.15] It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that the State has sought to justify the difference in the rates by alleging that the quality of presentation is better in the DTH than by the means of Cable TV and that there is a difference in technology with the technology of the DTH being more advance than the cable TV. It is submitted that however the said a .....

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..... s that a receipt shall be issued for every payment made towards installation and other charges. However, the DTH operators operates on a prepaid model and therefore, there is no issuance of receipts to the subscribers and the payments are also made by the customers online etc. It is submitted that therefore, the aforesaid Rule has been framed without proper application of mind and without understanding the business environment of the DTH operators. It is submitted that Rule 13 further requires that a copy of the receipt shall be kept in the receipt book. It is submitted that the same is unworkable for DTH operations. It is submitted that therefore, the impugned Rules are violative of Article 14 of the Constitution of India. Making above submissions and relying upon above decisions, learned Counsel appearing on behalf of the petitioner has requested to allow the present Special Civil Applications and grant the reliefs as prayed for. [7.0] Shri Shalin Mehta, learned Senior Advocate appearing on behalf of the petitioner of Special Civil Application No.3982/2010 - M/s. Bharti Telemedia Ltd. has made following submissions over and above the submissions made by Shri S.N. Soparkar, .....

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..... ertainment and therefore, the levy of entertainment tax on the DTH broadcasting services is absolutely illegal and arbitrary. [7.2] It is further submitted that section 6E of the Entertainment Tax Act, 2009, which imposes entertainment tax on DTH Broadcasting services can be upheld as a valid piece of legislation only if the incidence of tax is on entertainment. It is submitted that if the incidence of the entertainment tax is not on entertainment but on service, the charging section of tax fails. It is submitted that in the present case section 6E provides for a tax at the annual rate of ₹ 200 per TV set which received radio frequency signals for exhibition of films or moving pictures or series of pictures with the aid of the set top box or any other apparatus attached to it for securing transmission through DTH Broadcasting service. It is submitted that thus the tax is not on gross receipts from the entertainment but at the telephone sets which receive broadcasting service. It is submitted that the petitioner is already paying service tax at the rate of 10.3% of its gross receipts as provided under the Finance Act. It is submitted that therefore the State Government cann .....

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..... service tax can be levied by including value of entertainment in service and conversely, no entertainment tax can be levied by including the cost of service in the value of entertainment. It is submitted that in the present case section 6E hits the service itself by charging entertainment tax on the service attribute, viz. TV set of the subscribers which receives DTH broadcasting service. It is submitted that aforesaid makes section 6E vulnerable and incompatible with BSNL. [7.5] It is further submitted that the reliance placed upon the decision of the Hon'ble Supreme Court in the case of State of West Bengal and Ors. v. Purvi Communications Private Limited and Ors. reported in (2005)3 SCC 711 by the State Government to defend section 6E is absolutely misplaced and not applicable to the facts of the case on hand. Making above additional submissions, it is requested to allow the present Special Civil Applications and grant the reliefs as prayed for. [8.0] Shri Sandip Laddha, learned Counsel appearing on behalf of the petitioner of Special Civil Application No.3539/2010 Bharat Business Channel Ltd. over and above the submissions made by learned Counsels appearing on beha .....

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..... f List I in their pleadings. [9.3] It is further submitted that similarly the applicability of Entry 31 of List I to the subject of Entry 31 of List I to the subject of entertainment is only with reference to the power of regulation and control of the Central Government by virtue of the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933. However, the power of regulation and control is separate and distinct from the power of taxation and so are the two fields for the purpose of legislation. It is submitted that under the circumstances, merely because the petitioners are issued licenses under the provisions of the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933 by the Government of India for operating and providing DTH licenses, the State Legislature is not denuded from exercising its general power of taxation relatable to Entry 62 of List II for enacting the Act. [9.4] It is further submitted by Shri Trivedi, learned Advocate General appearing on behalf of the State that the provisions contained in section 2(j)(iiia) read with section 6E of the Act are the charging provisions of the Act. It is submitted that a plain reading of the sai .....

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..... n the legislative competence of the State legislature under Entry 62 of List II of the Constitution of India. [9.7] It is further submitted by Shri Trivedi, learned Advocate General appearing on behalf of the State that in the present case Aspect Theory as originally propounded by the Courts in Canada and thereafter followed by Courts in India, would be applicable. It is submitted that as per the said theory, the subjects which in one aspect and for one purpose fall within the powers of a particular Legislature, may in another aspect and for another purpose, fall within another legislative power. Shri Trivedi, learned Advocate General has relied upon the decision of the Delhi High Court in the case of Bharti Telemedia Ltd. (Supra) more particularly paras 45 to 47 of the said decision and it is submitted that in the similar set of facts and circumstances where both service tax and entertainment tax were levied and when similar submissions were made, the Delhi High Court has specifically observed and held that both are two separate and distinct taxable events in respect of each of the two aspects. It is observed that in respect of service aspect, the taxable event is flow of con .....

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..... rely part of the service rendered by the service providers, then in that case, the SIM card cannot be charged separately to Sales Tax, since it would ultimately depend upon the intention of the parties. It is submitted that therefore the decision of the Hon'ble Supreme Court in the case of BSNL (Supra) has no applicability of whatsoever nature, to the facts and circumstances of the present matter. [9.10] It is further submitted that in the case of BSNL (Supra), the Hon'ble Supreme Court had dealt with the question of a transaction being indivisible or composite, but the said question has relevance only in the context of sale' and service' and not in the context of entertainment' and service', which are present in the instant case. It is submitted that in case of State of Madras v. M/s. Gannon Dunkerly Co. Ltd. reported in AIR 1958 SC 560, it was held by the Hon'ble Supreme Court that several composite transactions in which though there was an element of sale, were not assesssable as contracts for sale of goods liable to Sales Tax. It is submitted that those, in fact, had led to 46th Amendment, amending Article 366 (29A) of the Constitution, allo .....

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..... ertainment used in the Entry, because the term entertainment used in Entry 62 of List II means entertainment in public place, a public show and not within the precincts of a private person's home and the contention on behalf of the petitioners that DTH entertainment is not the placerelated entertainment and hence, levy of Entertainment Tax under the Act on the same is constitutionally bad is concerned, Shri Trivedi, learned Advocate General has heavily relied upon the decision of the Hon'ble Supreme Court in the case of M/s. Geeta Enterprises v. State of U.P. reported in (1983)4 SCC 202 (Para 6). It is submitted that in the aforesaid decision the ordinary meaning of the term entertainment has been referred to extensively, as used in popular sense. It is submitted that while referring to various definitions of the term entertainment as laid down in various authoritative publications in para 6 of the judgment, the Hon'ble Supreme Court clearly observed to the effect that the expression entertainment is of a very wide amplitude so as to take within its fold every kind of entertainment. It is submitted that while following the aforesaid decision, the Delhi High .....

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..... bmitted that in the case of Ashirwad Films (Supra), the Hon'ble Supreme Court was dealing with the classification only the basis of language. It is submitted that in the present case the distinguishing features between two classes i.e. DTH operators and cable operators have been clearly mentioned in the further affidavit, which clearly go to show that the different classification made in the present case is not like the one present before the Hon'ble Supreme Court in the case of Ashirwad Films (Supra) where the classification based only on language was held to be unreasonable and arbitrary, since the same lacks logic or raison d'etre. [9.14] Shri Trivedi, learned Advocate General appearing on behalf of the State has requested to consider the following distinguishing features between the cable TV and DTH in support of his submissions that classification is based on very clearly demarcated logic and reasons. Sr. No. Cable TV Sr. No. DTH a. The said system is operated on the basis of analogue signals. a. The said system is operated with th .....

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..... f Central System without headend, in DTH Service, the subscribers receive the content by using antenna, receiving signals through satellite system and that beyond that, no difference is found in the content of entertainment provided by means of Cable television or through DTH. It is submitted that however further observations of the Hon'ble Madras High Court to the effect that mere difference in technology and quality of presentation, number of channels available, possibility of recording facility or payment facility, are per se not legally sustainable and run contrary to the following judgments, according to which, such differences can always justify the classification being not in contravention of Article 14 of the Constitution. [9.16] It is submitted that in the case of Prakashchand Anand v. State of Himachal Pradesh reported in AIR 1984 HP 47 (Para 8), the Hon'ble Division Bench of the High Court upheld the subclassification of cinematograph into cinema exhibition in theatres on one hand and video exhibition on the other, with a view to treating the same separately for the purpose of levy of entertainment duty. [9.17] It is further submitted that in the case of C .....

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..... iolate the principle underlying Art.14. (Emphasis supplied) 9. It will thus appear that while the entertainment through exhibition of films has been subjected to entertainment duty, the difference in levying of such entertainment duty in these two cases is on a very sound footing and in no case can be said to be unreasonable. Interest of cinematograph exhibitors has been amply safeguarded. It will not only be inconvenient but also unjust to charge entertainment duty on every admission to the entertainment by video cassette recorder. The challenge to the constitutionality of the M.P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983 must, therefore fail. [9.18] It is further submitted that in the case of Ramesh Sippy v. State of Maharashtra reported in AIR 1989 Bombay 260 (Paras 7 and 10), it was observed as under by the Hon'ble Bombay High Court. 7. It is by now well settled that in the matter of taxing statute the legislature enjoys a larger discretion in the matter of classification so long as it adheres to the fundamental principle underlying the doctrine of classification. The power of the legislature to classify is of wide range and flexibil .....

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..... rs have increased from 119 in January 1984 to 174 in June 1984. Since Bombay is a commercial town and its population is larger than elsewhere in Maharashtra, video game parlours in Bombay are making more profits than the video game parlours elsewhere.Therefore since the takings in Bombay from the video game parlours are larger, a flat rate of duty at the rate of ₹ 500/- per month per machine is charged whereas having regard to the takings in places other than Bombay a flat rate of only ₹ 200/- per month per machine is charged. Thus a reasonable classification is made in that behalf. The micro classification within the metropolitan city of Bombay was neither called for nor possible. Therefore the classification made is wholly reasonable and it is not possible for us to accept the challenge of the petitioners based on Art.14 of the Constitution also. [9.19] It is further submitted that in the case of Sri Srinivas Theater v. State of Tamil Nadu reported in AIR 1992 SC 999 (Paras 19 and 21), the Hon'ble Supreme Court has clearly observed that open air theaters and temporary theatres stand on a different footing from permanent theatres and that therefore different r .....

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..... islature in the present case is constitutionally valid. It is submitted that there may be cases where regulatory control may lie with the Central Government, which can exercise the powers in that behalf, but at the same time, taxation powers may be there with the State Legislature, if the nature of tax is relatable to any of the entries of List II of the 7th Schedule to the Constitution, where the State Legislature has exclusive power to enact law. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of State of West Bengal v. Kesoram Industries Ltd. reported in (2004)10 SCC 201 more particularly 129 of the said decision. [10.0] Now, so far as the challenge to Rules 3, 7, 11, 14 and 16 of the Rules, 2010 by some of the petitioners on the ground that they are ultra vires the Constitution of India and are arbitrary, capricious and violative of Articles 14, 19(1)(g) and 21 of the Constitution of India is concerned, Shri Trivedi, learned Advocate General appearing on behalf of the State has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Sreenivasa General Traders v. State of A.P. r .....

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..... It is further submitted that similarly Rule 12 cannot be said to be violative of Article 21 of the Constitution of India merely because it empowers the authority under the Act to have free access to any place in respect of which, a Certificate of Registration is used, in execution of their duties under the Act. Making above submissions and relying upon above decisions, it is submitted by Shri Trivedi, learned Advocate General appearing on behalf of the State that the provisions of the Act and the Rules are not violative of Articles 14, 19(1)(g), 265, 300A, 301 of the Constitution of India as alleged. It is submitted that the Act is a competent legislation enacted by the State Legislature and therefore, the petitioners are not entitled to any reliefs as prayed for or otherwise and therefore, all the petitions are required to be dismissed with the direction to the petitioners to forthwith make the payment of the outstanding dues towards entertainment tax with the compliance of the current tax liabilities. [11.0] Heard learned advocates appearing on behalf of respective parties at length. At the outset it is required to be noted that what is prayed in the present Special Civ .....

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..... other part thereof for admission to which a payment involving tax or more tax is required; (ii) any payment for seats or other accommodation in a place of entertainment; (iii) any payment for a programme or synopsis of an entertainment; (iv) 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 of the entertainment which, without the aid of such instrument or contrivance, such person would not get; (v) any payment for any purpose whatsoever connected with an entertainment which a person is required to make a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment; (vi) any payment for admission of a motor vehicle into the auditorium of a cinema known as DriveinCinema; (vii) any payment made by a person by way of contribution or subscription or installation charges or connection charges or any other charges collected in any manner whatsoever for television exhibition with the aid of any type of antenna with a cable network attached to it or cable television; (viii) any payment made by a per .....

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..... the aid of any type of antenna or cable television or Direct-To-Home (DTH) Broadcasting Service shall carry on television exhibition without obtaining a valid Certificate of Registration from the prescribed officer. (2) The provisions of sub-section (1) shall not be deemed to have been contravened if the proprietor having applied for such registration as provided in this section within three months from the date of the commencement of the Gujarat Entertainments Tax (Amendment) Act, 1993, carries on television exhibition with the aid of any type of antenna with a cable network attached to it or cable television. (2A) The provisions of sub-section (1) shall not be deemed to have been contravened if the proprietor having applied for such registration as provided in this section within three months from the date of the commencement of the Gujarat Entertainments Tax (Amendment) Act, 2009, carries on television exhibition with the aid of Direct-To-Home (DTH) Broadcasting Service. (3) Every proprietor providing an entertainment with the aid of any type of antenna or cable television or Direct-To-Home (DTH) Broadcasting Service shall apply in such form, in such manner and o .....

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..... generally; (ii) status of antecedents and the previous experience, if any, of the proprietor; (iii) the adequate precaution made for safety, convenience and comfort of the persons covered under Direct-To-Home (DTH) Broadcasting Service as per the guidelines issued by the Government of India from time to time. Explanation.- For the purpose of subrule (1) the expression antecedents' means the conduct of the applicant in relation to the regular payment of any tax or other dues payable by him. (2) The Certificate of Registration under section 6C shall be issued Proforma-2 and the Commissioner may prescribe special condition or conditions to be fulfilled, in the certificate. 5. Refusal to Grant Certificate.- The Commissioner shall have absolute discretion to refuse a Certificate of Registration for grounds to be recorded in writing for refusal of granting the Certificate of Registration. The Commissioner before refusing the Certificate shall afford to the proprietor an opportunity of being heard. 6. Fees.- The fees for a Certificate of Registration shall be rupees 10 lacs, the fees for renewal of Certificate of Registration shall be ten thousand and the fe .....

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..... oforma-6 for each financial year. 16. Order of Assessment. - (1) The assessment of tax in the respect of an entertainment shall be made within thirty days after the return in respect of such entertainment is furnished. (2) After the assessment is made, the prescribed officer shall serve a notice upon the proprietor for payment of tax, if any additional amount of tax is found to be due. [11.2] In view of section 6(e) of the Act, entertainment tax is leviable / imposed on per television set on the entertainment by Direct-To-Home (DTH) Broadcasting Service. Section 6(e) of the Act is very exhaustive and it provides that notwithstanding anything contained in section 3, 4, 6, 6A or 6B or any other provisions of this Act, there shall be levied and paid, by the proprietor of every Direct-To-Home (DTH) Broadcasting Service, to the State Government, the entertainments tax, per television set which receives radio frequency signals for exhibition of films or moving pictures or series of pictures with the aid of a set top box or any other apparatus attached to it for securing transmission through Direct-To-Home (DTH) Broadcasting Service, a tax at the annual rate of ₹ 200 .....

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..... the legislative competence of the State Legislature under Entry 62 of List II of the 7th Schedule to the Constitution to make a law for the levy and collection of tax on such entertainments. In the aforesaid decision the Hon'ble Supreme Court has also further held that power of the State to levy tax on luxuries including taxes on entertainment, amusement etc. falling under Entry 62 of List II of the 7th Schedule is not fettered by the enactment of Cable TV Network (Regulation) Act, 1995 by Parliament. It is specifically observed and held that the power of regulation or control under the said central enactment is separate and distinct from the power of taxation by the State legislature under Entry 62 of List II being a specific power, the power of taxation cannot be cut down or fettered by the general power or regulation as exercised by the Parliament in enacting the said 1995 Act. It is further observed and held that even enactment of more than one statute on different taxable objects and taxable persons under the legislative field exclusively reserved for the State, is not prohibited by the Constitution of India. In the aforesaid decision, in paras 34 to 42, the Hon'ble S .....

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..... which have been enacted under the same legislature field i.e. Entry 62 of List II of Seventh Schedule to the Constitution of India, and the two statutes apply admittedly to levy of tax on amusements, entertainments and luxuries in their respective area but the area of application of the said 1982 Act is different as would evident from the provisions of 1922 Act and the 1972 Act as aforesaid. The said 1982 Act was, for the first time, enacted by the State Legislature in 1982 and its area of application was initially confined to levy and collection of tax from the holders of television set or sets under Section 4 of that Act. Thereafter, under Section 4A of that Act, inserted by the West Bengal Taxation Laws (second Amendment) Act, 1983, the area of its application was extended to levy and collection of tax from the holders of video cassette recorder. The purpose of sub-Section 4(a) of Section 4A of the Act is to levy and collection of tax from any person who provide cable service directly to consumers or transmits to a sub-cable operator through a cable television network and otherwise controls or is responsible for the management and operation of a cable television network and suc .....

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..... ugh a Feeder Line for further instant transmission/communication in the TERRITORY on the terms and conditions set out in this agreement. Price The price payable by the FRANCHISEE for access to the signals provided by the NETWORK shall be as follows: (a) ₹ 25/per subscriber per month to be paid before the 7th day of the month. (b) The FRANCHISEE will keep an interest free deposit of ₹ 50/per subscriber with the NETWORK. (c) The price mentioned in (a) above is liable to change depending upon the market conditions and by mutual understanding between the parties of the area. Terms and Conditions (a) The NETWORK shall not provide any connections direct to home in the territory where the FRANCHISEE is operating. (b) The FRANCHISEE would provide a list of subscribers within seven days of signing this agreement with full name, address and other information of relevance as required by the NETWORK. Subsequently any change in the subscriber list would be communicated to the NETWORK within seven days. The FRANCHISEE would submit complete information and not withhold the name of subscribers or declare less number of subscribers to the NETWORK. .....

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..... the Constitution of India to make law for the levy and collection of tax on such entertainments. 38. A tax under Entry 62 of List II of Seventh Schedule to the Constitution of India may be imposed not only on the person spending on entertainment but also on the act of a person entertaining, or the subject of entertainment. It is well settled by this Court that such tax may be levied on the person offering or providing entertainment or the person enjoying it. The respondents admittedly engaged in the business of receiving broadcast signals and the instantaneously sending or transmitting such visual or audio visual signals by coaxial cable, to subscribers homes through their various franchise. It has been made possible for the individual subscribers to choose the desired channels on their individual T.V. sets because of cable television technology of the respondents and of sending the visual or audio visual signals to subcable operators, and instantly retransmitting such signals to individual subscribers for entertaining them through their franchise. The respondents' act is, no doubt, an act of offering entertainment to the subscribers and/or viewers. The respondent is very .....

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..... evice receive signals and instantly transmits such signals of visual image and audio to a subcable operator for presentation of any performance, film or any other programme to the subscriber and/or viewers against payment, and as such owner or person exhibits such performance, film or any other programme through his cable television network directly to customers he is liable to pay tax. Except that owner or person of the class referred to in sub-section (4a) of Section 4A of the said 1982 Act, no other person can be held liable to pay such tax. There is clear indication of the character of tax from the incidence of such tax or taxable event which takes place on the happening of the event of offering entertainments to the subscribers. The person on whom the legal liability to pay tax falls he has also been clearly and unambiguously mentioned in the charging section. The rates of tax has been sought to be specified by the notification. The measure of tax is the gross receipt on the basis of which the person is saddled with the liability to pay tax. There is no uncertainty or vagueness of the legislative scheme. The tax levied by sub-section (4a) of Section 4A of the said 1982 Act d .....

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..... ce rendered by respondent No.1 is not restricted only to receiving signals but also extends to sending visual images and audio and other information by means of telecommunication network for presentation to members of public. In the present case, respondent No.1 sends visual images and audio signals for presentation to the individual subscribers at various homes through their Feeder Line i.e. coaxial cable or any other device used for transmitting audio and visual signals in terms of clause 2 of the said agreement. The franchisee has access to the signals provided by respondent No.1. Therefore, it cannot be disputed that the price or prices received or receivable by the respondent No. 1 is the amount received or receivable by him for transmitting the signal for exhibition of any performance, film or any other programme telecast and the aggregate of such prices or amounts is the gross receipt of the respondent No.1 in relation to any month or part thereof. Who will be considered the giver of the entertainment the Cable operator or the subcable operator? [11.4] Applying the ratio of the law laid down by the Hon'ble Supreme Court in the case of Purvi Communication (P) Ltd. an .....

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..... 39;ble Supreme Court in the case of Purvi Communications (P) Ltd. and Ors. (Supra). Once it is held that Direct-To-Home (DTH) Broadcasting Services would fall within the meaning of entertainment , in light of Entry 62 of the 7th Schedule to the Constitution of India, levy of entertainment tax on providing Direct-To-Home (DTH) Broadcasting Services is permissible within the legislative competence of the State. [11.6] Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited (Supra) and the submissions made by the learned Counsel appearing on behalf of the respective petitioners with respect to the Aspect Theory and their attempt to distinguish the decision of the Hon'ble Supreme Court in the case of Puvi Communications (P) Ltd. and Ors. (Supra) from the decision of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited (Supra) and the contention on behalf of the petitioners that later judgment of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited (Supra) marches ahead of decision in the case of Purvi Communications (P) Ltd. and Ors. (Supra) by holding inter ali .....

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..... in the case of All Kerala Chartered Accountants' Association (Supra) is required to be referred to wherein the constitutional validity of the service tax levied under the Finance Act, 1998 for taxable service rendered by practicing Chartered Accountants was challenged on the ground that the impugned service is, in pith and substance, a tax on the practice of a profession and trade , falling within employment relatable to Entry 60 in List II of the 7th Schedule to the Constitution and, therefore, beyond the competence of Parliament. Ultimately it is held that there is a difference between the tax levied for being in the profession and the tax levied on the value of service rendered in the profession and not the fact of belonging to the profession or the income derived therefrom and that therefore, as per the Aspect Theory, it is open to the different Legislatures to legislate with regard to different aspects of the same subject matter. Even the aforesaid issue is also directly covered by the decision of the Hon'ble Supreme Court in the case of Federation of Hotels Restaurants Association of India (Supra). [11.8] Now, so far as the contention on behalf of the petition .....

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..... eld that it is only when all efforts to do so fail should the Court declare a statute to be unconstitutional. [11.9] The Hon'ble Supreme Court in catena of decisions has held that while deciding the constitutionality of the tax, oppressiveness; wisdom of advisability or expediency of a tax as measure of revenue; hardship; are not relevant. The Hon'ble Supreme Court has further observed and held that the Court is not concerned with the wisdom or unwisdom, justice or injustice of the law as the legislature is alive to the need of the people. It is further observed and held that in the field of taxation, the legislature greatly enjoys a greater latitude of classification. [11.10] In the case of State of M.P. vs. Rakesh Kohli Anr. reported in AIR 2012 SC 2351 in paras 13, 14 and 29, the Hon'ble Supreme Court has observed and held as under: 13. In our opinion, the High Court was clearly in error in declaring Clause (d), Article 45 of Schedule 1-A of the 1899 Act which as brought in by the M.P. 2002 Act as violative of Article 14 of the Constitution of India. It is very difficult to approve the reasoning of the High Court that the provision may pass the test of c .....

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..... In the case of M/s. Murthy Match Works vs. The Asstt. Collector of Central Excise reported in AIR 1974 SC 497 , the Hon'ble Supreme Court has observed and held that the Court cannot strike down a law because it has not made the classification which commends to the Court as proper. Nor can the legislative power be said to have been unconstitutionally exercised because within the class a subclassification was reasonable but has not been made. It is further observed that the modern State, in exercising its sovereign power of taxation, has to deal with complex factors relating to the objects to be taxed, the quantum to be levied, the conditions subject to which the levy has to be made, the social and economic policies which the tax is designed to subserve, and what not. It is further observed that unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review. [11.13] In the case of Sri Krishna vs. Town Area Committee, Chirgaon reported in AIR 1991 SC 2096, the Hon'ble Supreme Court in para 31 has observed and held as under: 31. The contention that the tax is discriminatory in view of the exemptions granted to some of the products and to th .....

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..... able to the facts of the case on hand. However, in para 22, the Hon'ble Supreme Court has specifically stated that the Court is not concerned with the rate of tax. Now, so far as the reliance placed upon the decision of the Madras High Court in the case of Tata Sky Ltd. rendered in Writ Petition No.25721/2011 and other cognate matters is concerned, with respect, for the reasons above, we are not in agreement with the view taken by the Madras High Court on the alleged violation of Article 14 of the Constitution of India. [12.0] In some of the petitions, some of the petitioners have also challenged the validity of Rules 3, 7, 11, 14 and 16 of the Rules, 2010 on the ground that they are ultra vires the Constitution of India and are arbitrary, capricious and violative of Articles 14, 19(1)(g) and 21 of the Constitution of India. [12.1] Rule 6 deals with Certificate of Registration and Rule 7 deals with Security deposits to be furnished on obtaining certificate of registration. Section 6C of the Act deals with registration whereas Section 7 of the Act lays down the provisions relating to Admission to Entertainment . Sub-section (3) of section 7 empowers the State Gover .....

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