TMI Blog2004 (9) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... inment is held; (3) ''Entertainment'' includes any exhibition, performance, amusement, game or sport to which persons are admitted for payment; (6) ''Payment for Admission'' includes - (i)Any payment made by the person who, having been admitted to one part of a place of entertainment is subsequently admitted to another part thereof for admission tow which payment involving tax or more tax is required; (ii)Any payment for seats or other accommodation in places of entertainment; (iii)Any payment for a programme or synopsis of an entertainment; and (iv)Any payment for any purpose whatsoever connected with an entertainment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment. (3) Tax on payment for admission to entertainments: (1)They shall be levied and paid on all payment for admission to any entertainment, a tax (hereinafter referred to as the Entertainment Tax) at a rate not exceeding 75% of the payment for admission as the Administrator of the Union Territory of Delhi may from time to time specify by Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertainment by dancing and seeing others perform the art of dancing and thus it became a public exhibition. 6. In respect of the discotheque ''Tabela'' in the Oberoi, the petitioner had produced details of receipts on account of admission fee year-wise from 1978-1979 to 1984-1985. The earlier period record was admittedly not available because the notice was issued for the first time only on 18.06.1984. The collection for this period was found to be ₹ 15,40,095/- and thus for the period 1968-69 to 1977-1978 best judgment was made taking into consideration the fact that the collection was more or less similar or the years for which data was made available. Since tax rate was 25%, on a total collection of ₹ 77,40,095/- , tax of ₹ 9,35,024/- was imposed. 7. In so far as the other discotheque ''Sensation'' is concerned, the total receipts were found to the tune of ₹ 8,43,021/-. Part of the fee was stated to be adjusted for the food and the balance amount was ₹ 1,44,424/- which was shown as miscellaneous income. However, the minimum entry fee was held totally towards entertainment and thus tax was imposed on the total amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory dissent initially in certain states it very soon became firmly established as the general view of the law. The first addtion of American Jurisprudence, Vol.46,p.207, para 13, sets forth the statement of the law in that regard, but we may go the case itself, Electa B. Merrill v. James W. Hodson, 1915-B LRA 481, from which the statement has been derived. Holding that the supply of food or drink to customers did not partake of the character of a sale of goods the court commented: The essence of it is not an agreement for the transfer of the general property of the food or drink placed at the command of the customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thi(sic)rst The customer does not become the owner of the food set before him, or of that portion which is carved for his use, or of that which finds a place upon his plate, or in side dishes set about it. No designated portion becomes his. He is privileged t(sic) eat, and that is all. The uneaten food is not his. He cannot do what he pleases with it. That which is set before him or placed at his command is provided to enable him to satisfy his immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other. The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need. What has been said in Electa B. Merrill (supra) appears to be as much applicable to restaurants in India as it does elsewhere. It has not been proved that any different view should be taken, either at common law, in usage or under statute.'' Learned counsel for the petitioner, however, concedes that after the judgment there were constitutional amendments to cover liability of sales tax in such cases. 11.Learned counsel for the petitioner submitted that bedroot of the case of the respondent was actually the judgment in s Geeta Enterprises and Ors. V. State of U.P. And Ors., dealt with the issue of entertainment tax and the meaning of the word ''entertainment.'' - Video show of games, sports etc., enjoyed by persons operating the machine on payment of a fixed charge was held to be entertainment. The provisions of Section 2(3) of the said Act were interpreted and on considertion of the legal aspects the following parameters were laid do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a show or something objective outside the person entertained. It was thus held that payment for admission into discotheque is a payment for admission to an entertainment. However, relief was provided to the petitioner in view of the fact that the said judgment dealt with the entry of persons who were members of the club and privileges and facilities other than the right of admission to the discotheque as a consequence of the payment fixed charge was held not liable to entertainment tax. It was thus directed that the authorities would have to determine what part of membership subscription represents payment of privileges, rights or purpose other than the admission to the entertainment in the discotheque which would be exempted. 14. Learned counsel for the petitioner submitted that this judgment was not challenged further though it was contended that the judgment of the Bombay High Court at best be of persuasive value and not binding on this Court. 15.In my considered view, this plea cannot be accepted because the judgment is in respect of activity of the same petitioner, albeit in different hotel and deals with the issue of providing of fixed charge for entry into discothe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here could be exception to this principle depending upon the facts of the case. It is undisputed that till the judgment of this Court in the case of Hindu Jea Band, Jaipur v. Regional Director, Employees State Insurance Corporation, Jaipur, the law in regard to the institutions like a club coming within the purview of the definition of establishment for the purpose of the Act was nebulous. It was so understood even by the Corporation itself which is evident from the fact that the action against the appellant for non-compliance of its liability was not taken for nearly 15 years until the visit of the inspector of the Corporation on 17.06.1990. In that background even the Corporation was not very certain whether the word establishment used in the concerned notification of 26.3.1975 included a club. Therefore, in our opinion, the High Court was justified in coming to the conclusion to call upon the club to make contribution for a period between 1975 to 1986 would be somewhat unreasonable Thus in the peculiar facts of this case, we are in agreement with the finding of the High Court that the demand under the Act as against this club can be enforced only from the year 1987 onwards.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner having accepted the judgment of the Bombay High Court in East India Hotels case (supra) where the same question was under consideration. I am inclined to follow the view taken by the Bombay High Court in East India Hotels case (supra) where a segregation was made in respect of services connected with the fixed charge and which (sic)ere other than for the said purpose. It is this element of fixed charge which is giving rise to the claim of subjecting to the company to entertainment tax. 22. It has to be appreciated that there was undue delay on the part of the respondents in issuing the notice as apparently the respondents were also not legally sure of their stand. To that extent the principles in Employees State Insurance Corporation case (supra) would apply. However, I am not inclined to exempt the whole amount from tax on that account for the reason that it is possible to segregate the amount towards the fixed charge from the other amounts. This is specially so in view of the i(sic)pugned order passed in the case of M/s Oberoi Maidens where separate figures have been given. It has been found that after adjusting the amount of food and drinks the balance amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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