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2003 DIGILAW 995 (KAR)

BANGALORE CLUB v. ENTERTAINMENT TAX OFFICER

2003-11-28

R.GURURAJAN

body2003
R. GURURAJAN, J. ( 1 ) PETITIONER Bangalore Club is before me seeking to declare that the religious celebration of the new year eve as outside the purview of the Entertainment Tax Act. ( 2 ) PETITIONER is a member club extending cultural and social facilities to its members. Petitioner club right from the day it was established by the english People is predominantly Christian oriented club. Right from the inception the petitioner is celebrating the new year eve to ring out the old and to ring in the new. The celebration is not open to public but regulated by a strict dress code and others wherein the members and the relatives and guests can join. It is a religious function. Members start gathering from the evening to witness the new year eve and they start parting after the function is over at the stroke of midnight. The members are required to pay to make up all the arrangements like lighting, music, decoration etc. Petitioner collects the amounts to recoup the cost of the new year eve function, the Entertainment Tax Officer, issued a notice calling upon the petitioner to pay entertainment tax in terms of Sec. 3 (l) (l-a) of the Entertainment Tax Act (the Act for short) on the total collection for the new year eve on 31-12-2002, at 10%. An exhaustive reply was filed in terms of Annexure-B. Thereafter the entertainment Tax Officer passed on the information to the first respondent. The first respondent initiated proceedings under Sec. 6a{3) of the Act in terms of Annexure-C. Aggrieved by the same petitioner is before me. ( 3 ) MS. Niloufer Akbar, learned HCGP accepts notice for the respondents. ( 4 ) IN my order dtd. 23-10-2003, I had directed the petitioner to produce the norms evidencing his contention that the club is predominantly Christian oriented club. Petitioner has filed the Bangalore Club Rules and bye-laws of the club. He has also placed before me a book A Clubs world. ( 5 ) LEARNED counsel for the petitioner would say that the club is predominantly meant for Christians and the celebration of new year eve is purely religious in character. According to him, people greet and welcome the new year and the petitioner charges per couple in addition to charging guest charges. ( 5 ) LEARNED counsel for the petitioner would say that the club is predominantly meant for Christians and the celebration of new year eve is purely religious in character. According to him, people greet and welcome the new year and the petitioner charges per couple in addition to charging guest charges. He says that on the facts of this case, it cannot be termed as entertainment being provided in terms of the laws governing the entertainment tax. Learned counsel also says that Section 6a is not applicable in the given set of circumstances. His further argument is that Sec. 6a (3) is not available to the respondent. Finally he says that even without obtaining objections penalty proceedings are also initiated. Therefore, according to him, the combined notice under Secs. 6a (3) and 6a (4) is unsustainable in law. ( 6 ) LEARNED HCGP was questioned with regard to the combined notice. She says that entertainment tax is payable and non-payment would result in penalty. 7. After hearing the learned counsel I have carefully perused the material on record. Admitted facts reveal of new year eve celebrations at Bangalore Club. The Club collects certain charges per couple /per guest to meet the expenditure incurred by the club on the said occasion. Music is provided on the said occasion. According to petition averments, the club is essentially a christain oriented club and the new year eve celebration is nothing but a religious function. At this stage, I must also notice the objections filed by the petitioner in terms of Annexure-B. In the objections statement petitioner does state that the club is not registered in terms of the Registration Act. With these facts let me see as to whether the petitioner can (be) said to have provided entertainment in terms of the Act in the light of a prayer made by the petitioner. ( 7 ) ENTERTAINMENT is defined under Section 2 (e) of the Act. With these facts let me see as to whether the petitioner can (be) said to have provided entertainment in terms of the Act in the light of a prayer made by the petitioner. ( 7 ) ENTERTAINMENT is defined under Section 2 (e) of the Act. "entertainment with all its grammatical variations and cognate experessions means: (i) a horse race to which persons are admitted on payment (ii) Cinematograph show Including video shows to which persons are admitted on payment or exhibition of films or moving pictures which are viewed and heard on the television receiving set, with the aid of any type of antennae with the cable net work attached to it or cable television for which persons are required to make payment by way of contribution or subscription or installation and connection charges or any other charges collected in any manner whatsoever; (iii) Any amusement or recreation or any entertainment provided by a multi system operator or exhibition or performance or pageant or a game or sport whether held indoor or outdoor to which persons are admitted on payment. Explanation : Recognised game or sport shall mean Cricket, Hockey, Foot Ball. Basket Ball, Tennis, golf, Volley-Ball, Badminton, Kabbadi, Swimming, Athletics, Base- ball, Weight Lifting, and any other sport or game the Government may notify. "it is a wide definition. In terms of the definition of entertainment petitioner would not fit in Sec. 2 (e) (i ). Sec. 2 (e) (ii) also may not apply. Section 2 (e) (iii) is relevant for our purpose. It provides for inclusion of any amusement or recreation or any entertainment provided by a multi system operator or exhibition or performance or pageant or a game or sport whether held indoor or outdoor to which persons are admitted on payment. Admittedly in the case on hand, performances are provided by way of lighting, music, decoration etc. These activities may amount to amusement or may amount to recreation. In fact Strouds Judicial Dictionary defines entertainment as under ; "entertaiment. . . . for public or special occasion", is an entertainment in the sense of a gathering of persons for entertainment". Words and Phrases Vol-2 defined entertainment as something connected with the enjoyment of refreshment-rooms, tables, and the like. Similarly Words and Phrases Vol-14a defined entertainment as a source or means of amusement, a diverting performance especially a public performance, as a concert,drama or the like. Words and Phrases Vol-2 defined entertainment as something connected with the enjoyment of refreshment-rooms, tables, and the like. Similarly Words and Phrases Vol-14a defined entertainment as a source or means of amusement, a diverting performance especially a public performance, as a concert,drama or the like. Entertainment denotes that which serves for amusement and amusement is defined as a pleasurable occupation of the sense or that which furnishes it, as dancing, sports, or music. In Readers Digest Family Word Finder at p. 264 entertainment has been defined thus :"entertainment amusement, diversion, distraction, recreation, fun, play, good time, pastime, novelty, pleasure, enjoyment, satisfaction. " universal Dictionary Readers Digest, entertainment is to mean : "the act of entertaining, the act, profession or. . . . . . . . . . of entertaining. The pleasure afforded by being entertained; amusement, hospitality extended towards guests". In the light of understanding of the word entertainment as music, performance, or gathering of persons either by way of recreation, distraction, diversion, pleasure, enjoyment, hospitality, satisfaction etc, the activities held by the petitioner on the new year eve cannot but be termed as entertainment in terms of Sec. 2 (e) (iii) of the Act, by way of lighting, music, recreation, hospitality or performance. It cannot therefore be accepted that no entertainment as such is provided by the petitioner as per the averment of the petitioner itself. ( 8 ) PETITIONERS second contention is that even the so-called entertainment is referable to a religious function. I am unable to accept this submission. A religious function involves some religious ceremony of a particular community. In the case on hand, apart from Christians others are also, admitted and for payment. Moreover, no material is placed to show that it partakes religious character. This Court can take judicial notice that in this country new year eve is accepted as a celebration by all people because of a fairly long colonial rule. In these circumstances, I am unable to accept the argument of a religious function as argued by the petitioner. ( 9 ) PETITIONER has also placed the plea of the club being predominantly Christian oriented club. No material as such is available on record. In fact I asked the petitioner to substantiate this by way of some material. Petitioner has placed before me the bye-laws of the club. The bye-laws provide for objectives. ( 9 ) PETITIONER has also placed the plea of the club being predominantly Christian oriented club. No material as such is available on record. In fact I asked the petitioner to substantiate this by way of some material. Petitioner has placed before me the bye-laws of the club. The bye-laws provide for objectives. The objectives are to run the club out of contributions of the members without aiming at any profit. To provide recreation and entertainment to its members, to promote camaraderie and fellowship among its members, to do all other acts and things as are conducive to the attainment of the above objectives. There is no specific bye-law providing for any special status to Christians or any special status membership to Christians in terms of the bye-laws. Learned counsel also produces before me the rules, objectives and definitions. Member is defined to mean a particular member of the club irrespective of the category of membership to which he/she is elected, invited or nominated. Membership is also open to ladies and gentlemen who are above the age of 25 years. It provides for permanent members, temporary members, honorary members, service members etc. There is absolutely no material to show that it is a predominantly Christian oriented club. In these circumstances, i am unable to hold that the club consisting of predominantly Christian members celebrates religious function on the new year eve as contended by the petitioner. I am also unable to accept that no entertainment is provided by them on facts and in terms of the law governing the field. In these circumstances, both these arguments are rejected. ( 10 ) HAVING come to this conclusion, it cannot but be held that the impugned notice is in terms of the Entertainment Tax act. Liberty is reserved to the petitioner to file objections within four weeks from today. Petitioners argument is that the notice under Section 6a (3) may not be sustainable is left open to be decided in the light of objections to be filed in terms of the Act. No opinion is expressed with regard to the statutory violation, statutory compulsion, and statutory remedies available to the petitioner. With regard to the plea of Section 6a (4), unless the respondents decided with regard to liability in the light of statutory provisions, they cannot levy a penalty in terms of the Act. No opinion is expressed with regard to the statutory violation, statutory compulsion, and statutory remedies available to the petitioner. With regard to the plea of Section 6a (4), unless the respondents decided with regard to liability in the light of statutory provisions, they cannot levy a penalty in terms of the Act. Therefore notice under section 6a (4) is premature. The impugned notice is severable. In these circumstances, the later portion of the notice seeking for penalty is set aside reserving liberty to the respondents to work out their penalty remedies after a decision in terms of this order to be passed under Sec. 6a (3) of the Act. Ordered accordingly. No costs. Ms. Niloufer Akbar, learned HCGP is directed to file memo of appearance within four weeks. Before concluding, the petitioner has placed on record a book A Clubs World. A reading of the same gives an impression that the club is one of the oldest club in the State and it renders good services to its members by way of its several activities in terms of the book. The same is noticed by this Court. Order accordingly. --- *** --- .