TMI Blog2015 (5) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... ot arise. The exception or exemption provision must be construed strictly. Give it or does not give it at all. An exemption is a standalone process. Therefore, the assessee is not eligible for benefit of exemption notification. - Decided against the assessee - S. B. Sales Tax Revision Petition Nos. 123 to 140 of 2013, 24 to 41 of 2014 - - - Dated:- 1-5-2015 - Mohammad Rafiq, J. Shri Vaibhav Kasliwal for the petitioner. Ms. Tanvi Sahai on behalf of R. B. Mathur for the respondent. ORDER Since similar issues of facts and law are involved in these matters, they are being decided by this common judgment, treating STR No. 128 of 2013 as the lead case. All these revision petitions have been filed by the petitioner-M/s. Citymax Hotels (India) Pvt. Ltd., a company incorporated under the Companies Act, 1956 having its registered office at Jaipur. Petitioner-company carries on the activity of providing for a charge, games and indoor sports activities at its outlet known as Fun City located at Third Floor, MGF Mall, 22 Godam Circle, Jaipur. A survey was conducted by the officers of Anti Evasion Wing of the Commercial Taxes Department at its premises on July 27, 2010. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e denied the benefit of notification dated March 26, 1999. (2) Whether the benefits granted by a notification can be withdrawn by issuing a non-speaking and non-clarificatory clarification ? (3) Whether anti-evasion authorities can assume jurisdiction, when the regular assessing authority has failed to carry out any assessment within the prescribed limitation ? (4) Whether video games which are 'games' for all intents and purposes and also fall within the broader sense of the term, can be treated to be outside the definition of 'games' and hence denied the benefit of notification dated March 26, 1999 ? (5) Whether the benefits granted by a notification can be withdrawn by issuing a non-speaking and non-clarificatory clarification ? In the course of arguments, however, learned counsel for the parties have confined their arguments on question Nos. 1, 2, 4 and 5 and therefore the matters are being decided on those questions, excluding question No.3. Shri Vaibhav Kasliwal, learned counsel for the assessee-petitioner, argued that the assessing authority was wholly unjustified in passing ex parte assessment order dated March 31, 2011 in a hasty manner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 ECC 497 decided on February 20, 2002, which judgment was upheld by the Supreme Court by dismissing the Appeal (Civil) No. 6529 of 2002 filed thereagainst vide judgment dated April 23, 2008. Reliance is also placed on judgment of the Supreme Court in ITC Ltd. v. Commissioner of Central Excise Appeal (Civil) No. 70 of 1999 decided on September 10, 2004 with respect to prevalence of a notification. Ms. Tanvi Sahai, learned counsel for the Revenue, opposed the revision petitions and argued that the petitioner-assessee is a un-registered dealer carrying on the business of providing video games and indoor activities for a charge. Upon a survey, which was conducted by the Anti-evasion Wing of the Department, it was found that the services provided by the petitioner would fall under the purview of entertainment and therefore would attract a tax levy under the Rajasthan Entertainments and Advertisements Tax Act, 1957. Since the petitioner failed to furnish any satisfactory reply to the notice, the assessing authority had rightly passed the assessment order and served a demand notice. It is argued that section 2(5) of the Act, which defines entertainment that includes any exhibiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding the additional entertainment tax chargeable under the said Act, which includes musical program, drama, songs and dances, puppet shows, kavi sammelan and mushairas, all kinds of sports and games, dungals, wrestling including free style wrestling and physical exercises, qawwali,mela and various items of entertainment, flower show, circus and magic show. In continuation with the aforesaid notification, a clarification was also issued by the State Government on October 23, 2004 regarding all kinds of games and sports mentioned at entry No. 6. The clarification notification reads as under: GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (TAX DIVISION) The State Government has issued Notification No. F.10 (4) FD/ Tax-Div/99-168 dated March 26, 1999 in relation to exemption from levy of entertainment tax on certain classes of entertainments. Vide entry No. 6 of the above mentioned notification the Government has exempted 'all kind of sports and games' from levy of entertainment tax including the additional entertainment tax chargeable under the Rajasthan Entertainments and Advertisements Tax Act, 1957. It has been brought into the notice of the Government th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls that in collective psyche of masses they are considered as, and in common parlance, called tournaments, matches, events, etc., of such activities as cricket, soccer, hockey, table tennis, lawn tennis badminton, races, swimming, boxing and kabaddi, etc. The very language of the aforesaid notification itself emphasizes that certain other specific entertainments were unambiguously earmarked for the purpose of exemption from tax, namely musical programmes, songs and dances, dramas, puppet shows, all kinds of sports and games, circus, magic shows, quawali, mela and its various items, flower shows, kavi sammelans and mushairas, dungals including wrestling'. This list does not allow room for addition of other entertainments in it. There is not much scope for reading between the lines in the construct of the entry No. 6 of aforesaid notification, which only mentions the wording: all kinds of sports and games. In such a scenario, it is a far cry to add or include video games in entry No. 6 appended to the notification dated March 26, 1999. Along the lines of aforesaid analysis, the clarification dated October 23, 2004 assumes significance and appears to be a logical exercise in setti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the person who uses the machine is the payment for admission. In any case it is a payment connected with entertainment which a person is required to make as a condition of attending the entertainment.' As to the competence of the Legislature in the matter of clarification for the purpose of levy of entertainment duty on video game parlors, case which may be of relevance for deciding the present controversy is of Bombay High Court in Ramesh Sippy AIR 1989 Bom. 250. It would be apposite to reproduce the observations made by the Bombay High Court in para 7 of the judgment, which are as follows: 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 flexibility so that it can adjust its taxation in all proper and reasonable ways. The Legislature which is competent to levy a tax must inevitably be given full freedom to determine which articles should be taxed, in what manner and at what rate. In tax matters, the State is allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o notifications, but the questions involved therein were entirely different and have no bearing on the present controversy and also do not afford any help to the petitioner. In the case of Sedco For ex International Drill Inc v. Commissioner of Income-tax, Dehradun [2005] 279 ITR 310 (SC); [2005] 12 SCC 717, the Supreme Court observed in para 17 as follows (para 18, page 318 in 279 ITR): As was affirmed by this court in Goslino Mario [2000] 241 ITR 314 (Gauhati), a cardinal principle of the tax law is that the law to be applied is that which is in force in the relevant assessment year unless otherwise provided expressly or by necessary implication. (See also: Reliance Jute and Industries Ltd. v. Commissioner of Income-tax [1979] 120 ITR 921 (SC); [1980] 1 SCC 139). An Explanation to a statutory provision may fulfil the purpose of clearing up an ambiguity in the main provision or an Explanation can add to and widen the scope of the main section1. If it is in its nature clarificatory then the Explanation must be read into the main provision with effect from the time that the main provision came into force2. But if it changes the 1Soma Bhatia (Ku.) v. State of U. P., AIR 1981 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 606, the Supreme Court held that in case of ambiguity, a taxing statute should be construed in favour of the assessee--assuming that the said principle is good and sound-does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the Revenue. Following the judgment in Novopan India Limited [1994] Supp 3 SCC 606, the Supreme Court recently in State of Gujarat v. Essar Oil Ltd. [2012] 48 VST 1 (SC); [2012] 3 SCC 522, held that general principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly and that in construing the exemption notification, question of equity does not arise. The exception or exemption provision must be construed strictly. Give it or does not give it at all. An exemption is a standalone process. In view of above discussion, the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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