9911796707
TMI Blog2023 (10) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. 1 charges admission fee in the form of ticket to allow people to visit fairs and also levy separate fee for other events such as Fashion Shows, Theatre Shows and Movies conducted within the same complex by individual organizations. The grievance of the petitioners is that respondent No. 1 was initially exempted from payment of entertainment tax for several years but a policy decision was taken on 18 November 1996 by the Competent Authority and exemption from payment of entertainment tax was withdrawn. It is stated that on imposition of tax for the year 1996-97, the respondent No. 1 filed Civil Writ Petition No. 129/99 titled 'ITPO v. Govt. of NCT of Delhi'. However, since no stay was granted, it deposited a demand draft of Rs. 6,40,233.75/- as part payment. 3. It is stated that for the assessment year 1997-98, 1998-99 and 1999-2000 assessment proceedings were initiated against the respondent for non-payment of tax and a tax of Rs 15,03,776/- was payable on various other entertainment activities during the year 1996-97 with interest of Rs 11,98,762/-; that the total demand for the year 1996-97 assessed to Rs 27,02,538/- and for the assessment year 1997-98, tax payable came t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under Rule 2(iii) of the Act. The appellant has not relied on any document to show that the powers of the Deputy Commissioner, appointed u/s 3(2) of the Act, had been circumscribed to specifically exclude performing functions of the Commissioner u/s 15(3) of the Act. I therefore conclude that the impugned order does not suffer from the infirmity of having been decided by an authority with no jurisdiction. The amount of tax which has been levied by the Entertainment Tax Officer has not been disputed in the present appeal and will merit no consideration. The important issue under challenge is that the impugned order has assessed the liability of payment of tax of the appellant, without considering the merits and the objectives for which the appellant organization had been set up. On this count, appellant has challenged the imposition of tax on the entry tickets. The case of the appellant is that the organisation had been set up by the Govt. of India as a trade promotion organisation with a mission to develop and promote exports through the medium of holding trade fairs. It is their submission that they assist Indian companies in product development and export development thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade fair, where entry fee is paid, is liable to pay entertainment tax and hence entertainment tax is payable for entry and also whenever special shows with tickets are performed. It has relied upon the test laid down by the Hon'ble Apex Court for a show to fall under the ambit of section 2(3) in the judgement reported in (1983) 4 SCC 202, to show that the admission may be free but if an exhibitor derives monetary benefit with it is deemed to be an entertainment and that it is immaterial whether the payment is made at the time of entry to the fair grounds or later. The counsel has also relied on other judgements also, which however are in the context of holding of video shows/games during bus journeys, holding music shows and of entertainment provided by cable TV operators etc. to press the significance of the activities to determine entertainment. The counsel has submitted that complete tax had not been paid by the appellants, particularly for the assessment year 1996-97, when tax was paid only on the film show tickets and the fashion show tickets. The interesting question is whether the fee paid for entry into the fair would attract entertainment tax; whether entry gained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fee against any purchases. The impugned order has mentioned that the appellant has been organizing exhibitions, shows, films, fashion shows etc. I conclude that admission to these events would attract the provisions of the Act, as distinct from the entry fee to the trade fair grounds, particularly when such events were allowing admission through a separate paid ticket. 9. The impugned order dt. 29.12.2000 is set aside. The impugned assessment orders dt. 10.3.2000, 13.3.2000 and 16.3.2000, passed by the ETO, are set aside only to the extent of the tax imposed on entry tickets to the trade fair grounds." {Bold text incorporates the reasons} LEGAL SUBMISSIONS ADVANCED BY THE LEARNED COUNSELS FOR THE PARTIES: 5. Mr. Satyakam, learned Additional Standing Counsel for the petitioners invited the attention of the Court to Section 6 in Chapter-III of the Act vis-a-vis Section 2(a) defining the expression "admission to an entertainment" and Section 2(i) defining the word "entertainment" and it was vehemently urged that the impugned decision was unsustainable in view of the plenary powers of the assessing authority under Section 15 of the Act. In his submissions reference has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept making a valiant effort to distinguish the same. DECISION: 7. Having given our thoughtful consideration to the submissions advanced by the learned counsels for the rival parties at the Bar and on consideration of the relevant provisions and case law cited at the Bar, we find that the impugned order dated 30 November 2007 passed by the FC cannot be sustained in law. In order to elucidate the reasons, it would be expedient to reproduce the relevant provisions of the Act, which go as follows:- "2. Definitions In this Act, unless the context otherwise require x x x x (a) Admission to an entertainment includes admission to any place in which the entertainment is held, and in case of entertainment through cable service, each connection to a subscriber shall be deemed to be an admission for entertainment [As Section 2(a) stood before amendment in 2010]. "(aa) [Amended by Delhi Act (2 of 2010) dated 05.01.2010 w.e.f. 01.02.2010] "admission to an entertainment" includes admission to any place in which the entertainment is held and in case of entertainment through cable service and direct-to-home (DTH) service with or without cable connection, each connection to a subscri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered or benefits provided to the organizer of an entertainment programme in lieu of advertisement of sponsor's product/brand name or otherwise shall be deemed to be payment for admission;] [17 Both explanations inserted vide amended Delhi Act (12 of 2022) dated 21.09.2012] x x x x x (t) "tax" means entertainment tax, betting tax or the totalizator tax, as the case may be, and includes surcharge, cess, penalty or any other charge levied under this Act; x x x x x 6. Tax on payment for admission to entertainment (1) Subject to the provisions of this Act, there shall be levied and paid on all payments for admission to any entertainment, other than an entertainment to which section 7 applies, an entertainment tax at such rate not exceeding one hundred per cent of each such payment as the Government may from time to time notify in this behalf, and the tax shall be collected by the proprietor from the person making the payment for admission and paid to the Government in the manner prescribed. (2) Nothing in sub-section (1) shall preclude the Government from notifying different rates of entertainment tax for different classes of entertainment or for diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kets; or (d) has fraudulently evaded or attempted to evade, the payment of tax due in any manner whatsoever, it shall, after giving the proprietor a reasonable opportunity of being heard, assess to the best of its judgment, the amount of the tax due from the proprietor, and may also impose a penalty not exceeding two times of the tax due. (2) The amount of tax assessed by the assessing authority shall, together with any penalty that may be directed to be paid, be paid by the proprietor within a period of fifteen days from the date of service of notice of demand issued by the assessing authority. (3) Any person aggrieved by an order under sub-sections (1) and (2) may, within one month from the date of service of such order, prefer an appeal to the Commissioner in such manner as may be prescribed. (4) An appeal shall lie from an appellate order of the Commissioner passed under sub-section (3) to the appellate authority within one month from the date of service of such order, in such manner as may be prescribed, and the order of the appellate authority shall be final. 8. A careful perusal of the aforesaid provisions would show that Section (6) is the charging Section whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to young children. The mechanism for playing the machine was so designed that a coin of 50 paise was to be inserted into a strong box built within the machine, the keys of which were with the manufacturer. After the show was over a representative of the manufacturing company would come, open the box, collect the money and pay the share of the hirer-petitioner out of the collected sale proceeds. The Supreme Court firstly proceeded to understand the meaning of word "entertainment", which is extracted as follows: "6. Before explaining the section we would like to ascertain the correct meaning and import of the word 'entertainment' (which is neither a scientific nor a technical term) as used in the popular sense or as understood in common parlance. This was held by this Court in the case of Porritts & Spencer (Asia) Ltd. v. State of Haryana [(1979) 1 SCC 82 : 1979 SCC (Tax) 38 : AIR 1979 SC 300 : (1979) 1 SCR 545 : 1979 Tax LR 1692 : (1978) 42 STC 433]. In Stroud's Judicial Dictionary (Fourth Edn., Vol. 2, p. 916) the word 'entertainment' has been defined thus: "Entertainment ... for a public or special occasion"... is an entertainment in the sense of a gathering of persons f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were laid down for the applicability of the Section: "(1) that the show, performance, game or sport, etc. must contain a public colour in that the show should be open to public in a hall, theatre or any other place where members of the public are invited or attend the show; (2) that the show may provide any kind of amusement whether sport, game or even a performance which requires some amount of skill; in some of the cases, it has been held that even holding of a tombola in a club hall amounts to entertainment although the playing of tombola does, to some extent, involves a little skill; (3) that even if admission to the hall may be free but if the exhibitor derives some benefit in terms of money it would be deemed to be an entertainment; (4) that the duration of the show or the identity of the person who operates the machine and derives pleasure or entertainment or that the operator who pays himself feels entertained is wholly irrelevant in judging the actual meaning of the word 'entertainment' as used in Section 2(3) of the Act. So also the fact that the income derived from the show is shared by one or more persons who run the show. 12. The aforesaid dictum has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the decision in an earlier case titled Maharaja Jaipur Museum Trusts, City Palace, Jaipur (supra) are squarely applicable in the instant matter. It was a case where the levy of entertainment tax on the proceeds received by the Trust for allowing admission of the visitors to the museum on payment of certain fees was challenged by the Trust. It was urged that His Highness had a vast collection of various articles of historical, scientific, literary and archaeological importance which came in his possession from several generations and after relinquishing all his rights, title and interest in those articles, his holiness had handed over them to be placed in a museum for which the aforesaid Trust was created, and the museum was founded for the benefit of the public and the visitors who visited the historic city of Jaipur. It was also contended that research scholars, students of history and persons interested in archaeology, architecture, science or arts derive benefit out of this museum which provided an opportunity for further studies and to augment their knowledge in the above subjects. The Court referred to Section 3(2) of the Rajasthan Entertainments Tax Act, 1956 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the museum does fall within the definition of the expression "entertainment" or not. x x x x x 26. It is not disputed that the entry to the museum is not restricted only to the students of history or archaeology etc. but any person whether he is a farmer, pilgrim or a child can visit it after paying the entrance fee levied by the petitioner. The exhibits displayed in the museum are valuable pictures, paintings, portraits, works on art, caskets, silver ware, ivory ware, china ware, glass ware, cut glass, books of arts, ornaments pieces, priceless rugs, armoury antics, curious manuscripts and others. If may be possible that every item exhibited may not provide entertainment to the visitor; but one or the other may provide entertainment even to those who are ignorant about the historical or other educational values of those articles. In such circumstances, I cannot accept the argument of the learned counsel for the petitioner that the museum which is primarily used for education of the people cannot be subjected to entertainment tax." 16. In view of the proposition of law laid down in the above noted cases, reverting back to the instant matter, we are unable to persuade ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
