JUDGMENT RAJESH H. SHUKLA - Rule. The learned Assistant Government Pleader Ms. M. D. Mehta waives service of notice of rule on behalf of the respondents. The present petitions are filed by the petitioners under article 226 of the Constitution of India for the prayer, inter alia, that writ of certiorari and/or any other appropriate writ, order or direction may be issued quashing and setting aside the impugned order dated October 18, 1999 passed by the Mamlatdar, Entertainment Tax, Ahmedabad (annexure A) and also the order dated June 19, 2006 passed by the Collector, Entertainment Tax, Ahmedabad (annexure B) as well as the order dated August 25, 2009 passed by the Commissioner, Entertainment Tax (annexure C) in revision for the grounds narrated in detail in the memo of the petition. Petitioner No. 2 is the director of petitioner No. 1 - company, which is engaged in providing signal from their head ends located at Ahmedabad to various cable operators, who in turn receive the same and transmit by way of cable to their subscribers. It is contended that the petitioners had not provided any entertainment and the cable operators who receive the signal provide the entertainment to the individual subscribers. It is therefore contended that the petitioners have no privity of contract with individual subscribers and the charges are collected by cable operators and no liability could be fastened upon the petitioners. It is contended that the liability of tax is not that of the petitioners as the petitioners are not actually imparting any entertainment. It is further contended that by virtue of franchise agreement, the liability of such tax is on the shoulders of cable operators who are, by and large, paying the tax. A reference is made to the notice issued by the Mamlatdar, Entertainment Tax, and it is contended that a meeting was arranged on May 2, 1996, by the Mamlatdar in-charge of Ahmedabad City and informed the petitioners about the tax pertaining to entertainment. It is also contended that it was specifically pointed out to the Mamlatdar that the tax liability is not on the shoulders of petitioner No. 1 - company as petitioner No. 1 - company is not actually imparting any entertainment, nor the liability is on the shoulders of petitioner No. 1 - company by virtue of franchise agreement. It is also contended that it was specifically pointed out to the Mamlatdar that the tax liability is not on the shoulders of petitioner No. 1 - company as petitioner No. 1 - company is not actually imparting any entertainment, nor the liability is on the shoulders of petitioner No. 1 - company by virtue of franchise agreement. However, the petitioners are made liable to pay the tax as per the show-cause notice at annexure G and communication at annexure H dated June 26, 1996 has been issued stating as to why the amount should not be recovered by way of arrears of land revenue under section 152 of the Bombay Land Revenue Code. Therefore, again, a meeting was held and ultimately the order was passed which has been challenged as stated above by the petitioners before higher authority and also a revision application before the Commissioner, Entertainment Tax, challenging the legality and validity of the aforesaid communications dated June 14, 1996, June 26, 1996 and July 5, 1996. It is also contended that earlier Special Civil Application No. 626 of 1999 was filed before this court praying for similar prayer with regard to issuance of writ of mandamus directing the respondents not to recover the amount from the petitioners as arrears of land revenue. It is also contended that after the petition was filed, officers of the respondents visited on January 27, 1999 the premises of petitioner No. 1, where all the equipments used for transmission of signals are kept and from where petitioner No. 1 carries on its activity of transmitting signal to the cable operators and they had switched off all the equipments, removed the connectors. Therefore, due to such threat and coercion, it is stated that a cheque for Rs. 5,00,000 was given by petitioner No. 2. It is also contended that further amount of Rs. 6,88,000 was also paid under protest pending the revision application as referred to in letter dated January 30, 1999 (annexure K) and the reply at annexure L. Thereafter, the petitioners applied for registration as required under section 6C of the Gujarat Entertainments Tax Act, 1977 (hereinafter referred to as, "the Act"). A copy of the application dated January 29, 1999 is at annexure M stating that without prejudice to their rights, such an application is filed for registration pending the revision application before the Commissioner, Entertainment Tax, Gujarat State. A copy of the application dated January 29, 1999 is at annexure M stating that without prejudice to their rights, such an application is filed for registration pending the revision application before the Commissioner, Entertainment Tax, Gujarat State. Further details were called for vide communication dated February 8, 1999, at annexure N, by the office of the Mamlatdar, Entertainment Tax, pursuant to the aforesaid application for registration which also refers to the fact that the date of commencement of the disk is not mentioned, number of connection holders is also not mentioned and therefore some responsible person of the company was called upon to remain present, who in turn stated that he would consult the advocate and thereafter he would reply. Therefore, by this communication, details were called for. Again, letter dated February 9, 1999, at annexure O was addressed by petitioner No. 1 - company pursuant to the aforesaid communication by the office of the Mamlatdar, Entertainment Tax, and the details were provided reiterating the contention that the demand for tax is challenged by way of revision application filed before the Commissioner, Entertainment Tax, Gujarat State. Thereafter, the registration certificate has been issued and the revision application was decided by the Commissioner, Entertainment Tax, vide order dated February 4, 1999 (annexure S). Annexure S is self-explanatory and the said order along with the notice were challenged before this court by way of Special Civil Application No. 2836 of 1999. The order passed by this court (coram : M. S. Shah, J.) dated October 22, 1999 (Indusind Media and Communication Ltd. v. State of Gujarat) in Special Civil Application No. 2836 of 1999 is produced at annexure V and accordingly the proceedings were culminated by the order passed in the revision application before the Commissioner, Entertainment Tax. It is in this background, now again, by way of the present petition, the same contentions are sought to be raised on the grounds, inter alia, that the petitioner - company is not having any privity of contract with the ultimate consumer and therefore they are not liable. The cable operators who are given the franchise agreement and who transmit the signal are liable for payment of the entertainment tax and the petitioners are not liable to pay the entertainment tax. The learned advocate Mr. The cable operators who are given the franchise agreement and who transmit the signal are liable for payment of the entertainment tax and the petitioners are not liable to pay the entertainment tax. The learned advocate Mr. R. S. Sanjanwala for the petitioners submitted that in the first place the petitioners are not liable to pay the tax as they are not providing the entertainment. They only receive the signal and transmit it to the cable operators, who in turn provide entertainment to the ultimate consumers and therefore they are not "proprietor" for the purpose of section 6B of the Act. The learned advocate Mr. Sanjanwala pointedly referred to section 6B and submitted that it refers to the liability of tax on the proprietor who provides entertainment by way of maintenance or operation of cable connections. He, therefore, emphasised that as the petitioners are not providing any entertainment by any cable connection to the consumers, the "proprietor" for the purpose of section 6B would be the franchisee operator, i.e., cable operators who receive the signal and transmit it to the consumers or connection holders. Therefore, it was submitted that as there is no privity of contract with the connection holders/consumers and the petitioners, the liability cannot be fastened upon the petitioners. He referred to the averments in the petition and submitted that the person responsible for maintaining and operating cable connection from any type of antenna or cable television would be "proprietor" for the purpose of section 6B of the Act and would be liable for the entertainment tax. He emphasised and submitted that the petitioners have established a central system called "head end" (MSO) from where through optical fibre cable, signals are transmitted to their franchisee - operators. The learned advocate Mr. Sanjanwala submitted that the cable television network in India is normally on 4 - tiered system. It was submitted that the signal feed television programmes made relaying from any part of the world is the first tier. The signal feed beamed across the world is received via satellite usually by a Multi System Operator (MSO) like the petitioner, which is the second tier. He further submitted that in most of the cases MSO set up the head-end control room in distribution network to take the signal feed to the control rooms of each local cable operator (LCO) who are termed as cable operators. The learned advocate Mr. He further submitted that in most of the cases MSO set up the head-end control room in distribution network to take the signal feed to the control rooms of each local cable operator (LCO) who are termed as cable operators. The learned advocate Mr. Sanjanwala submitted that under the system MSO provides the signal link to LCO and on the signal received from MSO they telecast the programme on the channel through the cable television network to the subscribers. The learned advocate Mr. Sanjanwala, therefore, submitted that the privity of contract exists between the subscribers and the LCO. The LCO exercises exclusive control over the viewers or the subscribers and they have the power to disconnect in case of any default by the subscriber. He therefore repeated and emphasised that there is no privity of contract between the subscribers and the present petitioners and therefore they cannot be fastened with the liability for the entertainment tax as they are not directly providing any entertainment. The learned advocate Mr. Sanjanwala also submitted that the "proprietor" for the purpose of section 6B would be the franchisee operator like the LCO who is given the signal for the purpose of further distribution to the subscribers. He also referred to section 2(j) of the Act which defines "proprietor" and submitted that the petitioners would not be covered. He further submitted that even if it is assumed for the sake of argument that there is any liability, at least the procedure has to be followed. The learned advocate Mr. Sanjanwala submitted that the impugned order has been passed in gross violation of the principles of natural justice. For that purpose, he referred to section 9(3) of the Act and submitted that no opportunity as provided in this section has been provided before passing the impugned orders. The learned advocate Mr. Sanjanwala submitted that as per the order passed earlier in Special Civil Application No. 2836 of 1999, an opportunity has not been given and therefore the impugned orders passed by the authorities are bad and illegal. The learned advocate Mr. The learned advocate Mr. Sanjanwala submitted that as per the order passed earlier in Special Civil Application No. 2836 of 1999, an opportunity has not been given and therefore the impugned orders passed by the authorities are bad and illegal. The learned advocate Mr. Sanjanwala also submitted that the Collector has erred in relying on the circular issued by the State Government and relying on the decision of the honourable apex court in the case of State of West Bengal v. Purvi Communication P. Ltd. reported in [2005] 140 STC 154 (SC); [2005] 3 SCC 711 he emphasised and submitted that the rules before the honourable apex court in that case were different than the rules in the present case and therefore it would not have any application. He therefore submitted that the present petition may be allowed and the impugned orders may be quashed and set aside. The learned AGP Ms. Mehta submitted that the contention about the violation of the principles of natural justice is misconceived. For that purpose, she referred to the impugned orders and the notices produced on record and emphasised that at every stage sufficient opportunity has been given. Further, referring to the communication dated October 18, 1999 (annexure U) she submitted that it is referred to in this communication that an opportunity was given to remain present and give clarification. However, nobody remained present. Further, it was pointed out that even the application for the registration dated January 29, 1999 was not accompanied by details for which the office of Mamlatdar, Entertainment Tax, vide letter dated February 8, 1999 at annexure K, called upon the petitioners to remain personally present with necessary details like the date of commencement of the disk, number of connection holders, etc. In spite of that, it was not given and a letter was addressed dated February 9, 1999 reiterating that they are not liable for tax. However, the registration certificate has been issued and after getting the registration certificate they tried to join issue contending that "as regards the registration certificate issued in respect of our premises at Maninagar, 180 connection holders referred to in the registration certificate are not our sub-operators". However, the registration certificate has been issued and after getting the registration certificate they tried to join issue contending that "as regards the registration certificate issued in respect of our premises at Maninagar, 180 connection holders referred to in the registration certificate are not our sub-operators". Similarly, they stated that as regards the connections given by them from the Nirman Bungalow, Ellisbridge, Ahmedabad, the number referred to is 6,968 connection which is disputed and has stated that connection has been given to 39 operators from the Nirman Bungalow, Ellisbridge. These aspects have been discussed by the authorities and it cannot be said that an opportunity has not been given referring to section 9(3) of the Act. Further, it was submitted that petitioner No. 1 - company who is operating as MSO would nevertheless be liable because after the signals are received they are transmitted to the LCO, who in turn cater to the needs of the consumers or subscribers. The learned Assistant Government Pleader Ms. Mehta has also referred to the definition of "proprietor" given in section 2(j). The learned Assistant Government Pleader has further submitted that as dealt with in detail in the reply affidavit as well as in the impugned orders, particularly the order passed by the Commissioner, Entertainment Tax, in revision application, there is no substance in the submissions made. She referred to the reply affidavit to point out about the huge liability. Also the assessment made for the period from April 1, 1996 to March 31, 1999 is Rs. 60,48,000 upon which penalty under section 9(3) of the said Act has been imposed as 1 1/2 times more than the tax amount, which would come to Rs. 90,72,000. She further submitted that as the petitioners had earlier defaulted as stated in this affidavit, the total amount of the liability would come to Rs. 1,51,20,000. She therefore submitted that as the petitioners have repeatedly defaulted and having exhausted all the remedies, the present application may not be entertained and the petition deserves to be rejected. She further submitted that opportunity has been given by the court to deposit some amount without prejudice, that is, the principal amount, for which time was granted and ultimately the petitioners have failed to deposit and therefore the petition deserves to be rejected. In rejoinder, learned advocate Mr. Sanjanwala submitted that the petitioners have already paid an amount of Rs. She further submitted that opportunity has been given by the court to deposit some amount without prejudice, that is, the principal amount, for which time was granted and ultimately the petitioners have failed to deposit and therefore the petition deserves to be rejected. In rejoinder, learned advocate Mr. Sanjanwala submitted that the petitioners have already paid an amount of Rs. 30,00,000 as per the direction given by this court and the amount of penalty is imposed erroneously, and in any case, since the orders have been passed by the authority in violation of the principles of natural justice, they may be quashed and set aside after providing an opportunity and after making fresh assessment with regard to the connections the liability may be imposed or assessed and then recovery could be made. The learned advocate Mr. Sanjanwala submitted that till then the recovery cannot be made. The learned Assistant Government Pleader Ms. Mehta also referred to the affidavit-in-reply and the circular dated June 24, 1998 and submitted that the circular is very much clear which clearly refers to the Gujarat Entertainment Tax (Telecast through Cable Television and Antenna) Rules, 1993 (hereinafter referred to as, "the Rules") and therefore the submission that they are MSO and are not "proprietor" and not liable to pay the tax cannot be accepted. In view of rival submissions, it is required to be considered whether the petition deserves to be entertained or not. The chequered history would reveal that earlier petitions have been filed before this court and an opportunity has been granted to the petitioners which has been pointed out. As can be seen from the record also, even when the application for registration was made pursuant to the order passed by this court in earlier litigation, it was not accompanied by necessary details. The details were called for and ultimately the registration certificate was issued. After the registration certificate has been issued as required under the law, an issue has been joined by the petitioners that they do not have 6,968 connections through their premises at Nirman Bungalow, Ellisbridge, Ahmedabad. Similarly, they have disputed with regard to the number of connections through Maninagar premises. It is an admitted fact that they are MSO receiving signal and passing on to LCO through franchise agreement. Similarly, they have disputed with regard to the number of connections through Maninagar premises. It is an admitted fact that they are MSO receiving signal and passing on to LCO through franchise agreement. The franchise agreement is an agreement between such MSO and LCO with regard to their own share in the business or business arrangement as to how they would function. Therefore, this franchise agreement or interse arrangement cannot have any bearing on the liability for the tax. It was again contended that by way of such franchise agreement, they are not liable even though the law enjoins the liability on such MSO. The first submission made with regard to the fact that there is no privity of contract with the subscriber directly and whatever the contract is with the LCO is misconceived in view of the clear provisions of the Act read with the Rules, particularly section 6B(1) of the Act. The submissions is made by learned advocate Mr. Sanjanwala referring to section 6B that section 6B enjoins the liability on the "proprietor" who provides the entertainment by cable connection, meaning thereby the cable operator would be the "proprietor" and not an MSO like the petitioner. Though the submission has been made, there is nothing to indicate as to how to carve out any such exception or on what basis such exception has been made. The definition of "proprietor" is provided in section 2(j) of the Act, which defines "proprietor" as follows : "(j) 'proprietor' in relation to any entertainment, includes the owner thereof, and any person - (i) responsible for, or for the time being in charge of, the management thereof, or (ii) connected in whatsoever manner with theorization of the entertainment for any duration, or (iii) charged or entrusted or authorised with the work of admission to the entertainment, or (iv) responsible for, or for the time being in charge of, management of providing of maintaining or operating cable connection from any type of antenna or cable television; whether or not he has obtained licence or certificate or registration, if any, for such entertainment under any law for the time being in force." Thus, section 2(j) refers to "proprietor" in relation to any entertainment, includes the owner thereof, and any person - "... (ii) connected in whatsoever manner with the organisation of the entertainment for any duration." The Gujarat Entertainments Tax (Exhibition by means of Cable Television and Antenna) Rules, 1993 have been framed and Chapter II, rule 3, providing for application for certificate of registration reads as under : "(1) A proprietor providing an entertainment with the aid of any type of antenna or cable television shall apply for the certificate of registration under section 6C in form I in triplicate along with the following documents, namely :- (a) a copy of the treasury receipt for having paid the fee as specified in rule 7; (b) documents showing the ownership or tenancy of the place; (c) sketch plan of the site showing the area covered by the cable television network." Therefore, it implies that the "proprietor" is required to provide the details as provided in these Rules and is required to obtain the registration certificate. The petitioners herein have also, as discussed above, applied for the registration and they have been granted the registration certificate. Further, rule 21 refers to the returns which are required to be supplied relating to the payment of tax as a proprietor referred to in section 6B along with necessary forms and details. Therefore, the submission made by learned advocate Mr. Sanjanwala referring to the definition of "proprietor" that the petitioners cannot be termed as a proprietor is misconceived. It is not in dispute that petitioner No. 1 - company is working as MSO receiving the signal and then transmit it to the LCO. Therefore, even if it is considered with reference to the definition of section 2(cc) "cable television", it also provides that "a system organised on payment by a connection holder of any contribution or subscription or installation charges or connection charges or any other charges collected in any manner whatsoever, for exhibition of films or moving pictures or series of pictures or serials by means of transmission of television signals by wire" and it provides as to how the signal is passed on. Therefore, the submission made by learned advocate Mr. Sanjanwala referring to section 6B of the Act that they are not the "proprietor" within the meaning of section 6B cannot be accepted as there is nothing to suggest that it is only the LCO who would be "proprietor". Therefore, the submission made by learned advocate Mr. Sanjanwala referring to section 6B of the Act that they are not the "proprietor" within the meaning of section 6B cannot be accepted as there is nothing to suggest that it is only the LCO who would be "proprietor". In fact, section 6B which refers to the definition of "proprietor" is wide enough to include such MSO also and the Legislature in its wisdom, therefore, instead of confining the definition to only cable operator, has specifically provided in a language using the words "connected in whatsoever manner with the organisation of the entertainment for any duration". Again, the petitioners have obtained the registration certificate. They have also stated that they are transmitting to LCO and the law and particularly the Rules and the circulars issued clearly provide that the details of the subscribers is required to be produced before the Mamlatdar, Entertainment Tax, for the purpose of assessment. There is no dispute that after giving notices and opportunity, the assessment has been made. Not only that, on the application made by the petitioners, the registration certificate has been granted. Before the application for registration was entertained, a specific communication was addressed stating that in the application for registration, the details are not mentioned and after they were called upon to submit the details, ultimately, the registration is granted. The conduct of the petitioners is also required to be considered that having once obtained the registration certificate, they tried to join an issue with regard to the number of connections or the subscribers. No payment has been made, though, admittedly, they have been receiving the amount from the LCO. Thus, on the one hand, the petitioners have been getting the amount from the LCO, do not want to pay the tax and on the other hand they have deliberately tried to suppress the facts and details with regard to the number of connections or subscribers. It is required to be mentioned that the liability is cast upon the cable operators and the petitioners to submit the details with regard to the number of subscribers which every operator who is a sub-operator and the petitioner who is an MSO as the main operator has to submit and by not submitting the correct facts and record has tried to avoid the payment of tax. Thereafter, again, when an opportunity is granted, details are not submitted and after the registration is applied for assessment has been made specifically referring to the number of subscribers for the purpose of assessment qua the petitioners, an issue has been joined. This aspect has been discussed in the reply affidavit as well as in the impugned order passed by the Commissioner, Entertainment Tax. It is required to be mentioned that an earlier application for review or revision under section 13 of the Act has been made, which was allowed, and it was directed that after giving an opportunity of being heard, it may be decided. It is pursuant to such direction, again, the notice dated March 11, 1999 at annexure T has been issued by the Mamlatdar, Entertainment Tax, wherein it is specifically recorded that the director has not remained present and again he may remain present and ultimately the impugned order dated October 18, 1999 has been passed by the Mamlatdar, Entertainment Tax and an appeal has also been preferred before the Collector, which has been rejected by the order dated June 19, 2006. Against the said order, revision application has been preferred before the Commissioner, Entertainment Tax, which is also rejected vide order dated August 25, 2009. Detailed reasoning with regard to the contentions raised has been given. In the said order also these very contentions have been discussed and dealt with referring to the Rules and also the judgment of the honourable apex court in the case of State of West Bengal v. Purvi Communication P. Ltd. [2005] 140 STC 154 (SC); [2005] 3 SCC 711. Therefore, in view of the aforesaid discussion and the orders passed by all the authorities, there is no reason to entertain the present petitions as it cannot be said that the impugned orders have been passed in violation of the principles of natural justice by any stretch of imagination. As a matter of fact, more than sufficient opportunity has been granted, but the petitioners, with a design to avoid and delay the payment of tax, have been indulging in such tactics. It is also required to be noted that, admittedly, they have been collecting the amount from the LCO. The petitioners do not desire to make the payment towards the tax liability and have been consuming time. Therefore, such petitions cannot be entertained without any payment. It is also required to be noted that, admittedly, they have been collecting the amount from the LCO. The petitioners do not desire to make the payment towards the tax liability and have been consuming time. Therefore, such petitions cannot be entertained without any payment. It is required to be noted that in a judgment of the honourable apex court in the case of State of West Bengal v. Purvi Communication P. Ltd. [2005] 140 STC 154 (SC); [2005] 3 SCC 711 this very aspect has been discussed and observations have been made referring to the liability of tax and it has been specifically observed in paras 43 and 44 making MSO also liable. These very arguments which are sought to be raised by learned advocate Mr. Sanjanwala that there is no privity of contract or direct dealing with the subscribers and MSO like the petitioner and therefore they could not be saddled with the liability, have also been discussed and have not been accepted. It has been specifically observed in para 43 : "We do not find any reason to consider the sub-cable operator as the only giver. Even though the sub-cable operator may be the giver of the entertainment inasmuch as he has a direct connection with the viewer, still in cases like the present where he does not select the show, or make the show ready, or does not put the show on and the exhibition is done by the cable operator through mere franchisees it cannot be said that the cable operator is not the giver. It is true that the cable used to get in touch with the TV set of the consumer has been provided by the sub-cable operator, but that fact alone by itself cannot make the sub-cable operator, the only exhibitor or the giver, of the entertainment. It is true that the cable used to get in touch with the TV set of the consumer has been provided by the sub-cable operator, but that fact alone by itself cannot make the sub-cable operator, the only exhibitor or the giver, of the entertainment. In a world of indirect links between individuals made possible by the electronic age, the indirect meeting between the cable operator and the consumer through a technical link has been made possible." Though the rules may be different, but the basic idea with regard to the method of functioning for providing entertainment through cable network would remain the same, and it is the same system of MSO and LCO and it is in that context the observations have been made making MSO like the petitioners also liable, rejecting the very same submissions and contentions raised in the present petitions. Therefore, we do not find any substance in the submissions made both with regard to violation of principles of natural justice or even the submissions made before this court referring to the provisions of the Act and the Rules that they are not liable at all as "proprietor". In the result, the present petitions deserve to be rejected and accordingly stand rejected. Rule is discharged. Interim relief granted earlier shall stand vacated. No order as to costs. Further order After the order was pronounced, at the request made on behalf of learned advocate Mr. Sanjanwala for the petitioners, the operation of the order is stayed for a period of six weeks to enable the petitioners to approach the higher forum.

INDUSIND MEDIA AND COMMUNICATION LTD. v. MAMLATDAR