TMI Blog2014 (8) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... dment direct-to-home (DTH) service was brought in the ambit of entertainment tax and to pay entertainment tax. Therefore, after considering the decision of Hon'ble Apex Court in the case of State of West Bengal and others Versus Purvi Communication P. Ltd. and others [2005 (3) TMI 438 - SUPREME COURT OF INDIA] upheld legislative competence of the State Legislature to levy entertainment tax on all payments for admission to an entertainment through direct-to-home (DTH) as contemplated under the relevant section 7 of the Delhi Entertainments and Betting Tax Act, 1996, the petitioner is liable to pay entertainment tax. - Decided against the petitioner - D. B. Civil Writ Petition Nos. 5133 of 2008, D. B. Civil Writ Petition Nos. 15136 of 2010, D. B. Civil Writ Petition Nos. 6012 of 2011 - - - Dated:- 19-8-2014 - Ajay Rastogi and J. K. Ranka, JJ. ORDER The controversy involved in all the three writ petition is same, therefore, they are being decided by this common order. Since the facts of all the cases are similar, therefore, for the sake of convenience and brevity the facts relating to Writ Petition No. 6012 of 2011 are being taken into consideration for the purpose of disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on non-exclusive basis for a period of 10 years to establish, maintain and operate unlinking hub (teleport) and the said licence stands granted for whole of India and petitioner is not required to get any permission or licence from any other authority for providing DTH broadcasting service. 3. The petitioner has sought to challenge the levy of entertainment tax imposed by the Commercial Taxes Officer-I in the various assessments, wherein it is held by the assessing officer that the petitioner is liable for payment of entertainment tax in view of amendment in the Rajasthan Entertainments and Advertisements Tax Act, 1957 by the Rajasthan Finance Act, 2008 (Act No. 6 of 2008) dated February 25, 2008. According to the petitioner, the respondent-State cannot levy such tax as DTH broadcasting services specifically covered under List I, Schedule VII (entry 92C) by virtue of discipline of article 246(1) of the Constitution of India and it cannot be again taxed under any taxing entry under List II of Schedule VII (entry 62) just by artificially enlarging the scope of the entry under List II. The definition of entertainment remains un-amended, however the charging section states tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y entertainment tax at the rate of 10 per cent of the subscription charges per subscriber. [No. F. 12(15)FD/Tax/2008-91] By order of the Governor, (Rajat Kumar Mishra) Secretary to Government. 10. It would also be appropriate to quote sections 3(4A), section 4AAA, rules 18BBBB and rules 18BBBBB: S. 3(4A) 'direct to home broadcasting service' means distribution of multi channel television programmes by using 'satellite system' by providing television signals direct to the premises of subscribers without passing through an intermediary such as cable services. S. 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 per cent 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. R. 18BBBB. Permission to be obtained to operate direct to home broadcasting service.--(1) The proprietor of a direct to home broadcasting service shall submit to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk service is built up and controlled by the respondents. Whatever amount is received or receivable by the respondent in respect of providing such entertainments is taxable under sub-section 4(a) of section 4A of the said 1982 Act which has a direct and sufficient nexus with the entertainments. 39. The charging section is very clear and unambiguous inasmuch as there is no vagueness about the incidence of tax and the person who is liable to pay tax. So far as the declaration of liability to pay tax is concerned, the charging section does not suffer from any vagueness. The provision does not lead to any discrimination amongst persons. There is no scope of any discrimination inasmuch as either an owner or person who having in possession of electrical, electronic or mechanical device receive signals and instantly transmits such signals of visual image and audio to a sub-cable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the form of signal on the cable line, the cable operator cannot be said to be providing the entertainment within the meaning of entry 62 of List II of the Seventh Schedule to the Constitution. So long as the State Act remains within the ambit of entry 62 of List II and is not offending the provisions of article 286 of the Constitution or the laws made thereunder/the State Act validity is beyond question. Thus, respondent No. 1 who is engaged in receiving and providing TV signals to individual cable operators is liable to pay tax under clause (ii) of sub-section (4a) of section 4A of the Act. From the definition of communication network given in the agreement between the cable operator and sub-cable operator (termed as franchise in the agreement), it will be clear that the service 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., coaxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso cannot accept the contention that the transaction of providing broadcasting services and entertainment should be treated as indivisible contract so as to exclude the aspect of entertainment by holding that predominantly transaction is broadcasting and not entertainment. Nor alternative plea of transaction being composite for splitting up entertainment from broadcasting be accepted. Rather, aspect theory has to be applied and levy of entertainment duty on entertainment aspect is fully justified independent of service tax on broadcasting service which is a different aspect of the transaction. 30. Thus, we hold that levy of entertainment duty falls under entry 62 of List II and is not hit by entry 92C of List I. We are unable to hold that levy of entertainment duty on providing entertainment by broadcasting signals on TV sets is ultra vires the powers of the State Legislature. 14. Thus, the Punjab and Haryana High Court in the petitioner's own case while interpreting identical amendments brought by the State of Punjab regarding validity of duty provided under section 3(3C) of the Punjab Entertainment Duty Act, 1955 held that the levy of entertainment falls under entry 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable provider and DTH provider, the said levy was struck down by the Madras High Court. In the aforesaid aspect of the matter, it is therefore not open to the petitioners to contend that the State Legislature is denuded of its power to impose levy of entertainment tax on the activity of entertainment provided through television exhibition by the DTH service provider through set top box on payment of subscription and other charges for the same. 16. The Delhi High Court in the case of Bharti Telemedia Ltd. v. Government of NCT of Delhi reported in [2011] 44 VST 262 (Delhi) had also an occasion to consider the identical issue of imposition of entertainment tax on direct to home (DTH) services in Delhi and after analysing the material on record and after considering the judgment of the honourable apex court in the case of Purvi Communication P. Ltd. [2005] 140 STC 154 (SC) [2005] 4 RC 543: AIR 2005 SC 1849 upheld legislative competence of the State Legislature to levy entertainment tax on all payments for admission to an entertainment through direct-to-home (DTH) as contemplated under the relevant section 7 of the Delhi Entertainments and Betting Tax Act, 1996. In view of the for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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