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Uttarakhand High Court · body

2014 DIGILAW 226 (UTT)

Anand Lal Arya v. District Magistrate Nainital

2014-05-21

ALOK SINGH

body2014
Judgment Alok Singh, J. In all these writ petitions, identical questions of fact and law are involved, therefore, all these writ petitions were heard together and are being disposed of by this common judgment. 2. All the writ petitioners are paddle boat owners. Few of them are having paddle boats in various lakes of Nainital and few of them are having paddle boats in the Kempty Fall Area, Tehri Garhwal. State of Uttarkahand decided to levy and recover entertainment tax from the paddle boats owners. Feeling aggrieved, present petitions were preferred. 3. As per Article 265 of the Constitution of India, no tax shall be levied or collected except by authority of law. 4. Section 2 (g) and Section 3 of the Act are being reproduced hereunder :- “2. (g) 'entertainment' includes any exhibition, performance, amusement, game, sport or race (including horse race) to which persons are admitted for payment and in the case of cinematograph exhibitions, includes exhibition of news reels, documentaries, cartoons, advertisement shorts or slides, whether before or during the exhibition of a feature film or separately. [It also includes any activity notified as entertainment by the State Government from time to time;] 3. [It also includes any activity notified as entertainment by the State Government from time to time;] 3. (Tax on entertainment) - (1) Subject to the provisions of this Act, there shall be levied and paid on [all aggregate payments required for admission to any entertainment] other than an entertainment to which [Section 4 or Section 4-A or Section 4-B] [or Section 4-C] applies or a compounded payment is made under the proviso to this sub-section [an entertainment tax at such rate not exceeding one hundred and fifty per cent in the case of film which has been granted an “A” certificate under the Cinematography Act 1952 (Act No. 3 of 1952), and in any other case at such rate not exceeding one hundred and fifty percent] of each such payment as the State 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: [Provided that a proprietor of a (cinema or cable operator) may, in lieu of payment under this sub-section, pay a compounded payment to the State Government on such conditions and in such manner as may be prescribed and at such rate, as the State Government may from time to time notify, and different rates of compounded payments may be notified for different categories of local areas: [Provided further that in the case of cable service, the proprietor of the cable service control room/multi system operator shall be liable to pay the tax, irrespective of the fact whether he collects it directly from the person making the payment for admission or indirectly through an associate or franchise cable operator or an agent, who in turn collects it from the person making the payment: Provided also that a proprietor of a cinema, in lieu of payment under this sub-section, shall make a lump sum payment to the State Government on such conditions and restrictions and in such manner as may be prescribed and at such rate as the State Government may from time to time notify, and different rates of lump sum payment may be notified for different categories of local areas or cinemas or for different payment for admission.] Explanation – [(2) Nothing in sub-section (1) shall preclude the State Government from notifying different rates of entertainment tax for different areas or for different classes of entertainment or for different [aggregate payment required for admission] to entertainment.] [2-a) It shall be lawful for the State Government to notify lump sum rate of entertainment tax for any entertainment or class of entertainments or for different payment for admission to entertainment or for different area.] [(3) Where the aggregate payment required for admission to an entertainment together with any charge leviable under this Act is not a multiple of one rupee than notwithstanding anything contrary contained in sub-section (1) or sub-section (2) of any notification issued thereunder, the tax shall be increased to such extent and be so computed that the aggregate of such aggregate payment and other charges is rounded off to the next higher multiple of one rupee and such increased tax shall also be collected by the proprietor and paid to the Government in the manner prescribed.] (4) If in any entertainment, referred to in sub-section (1), to which admission is generally on payment, any person is admitted free of charge or on a concessional rate, the same amount of tax shall be payable as would have been payable had such person been admitted on full payment. (5) Where the [aggregate payment required for admission] to an entertainment, referred to in sub-section (1), is made wholly or partly, by means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and on the amount of [aggregate payment required for admission] , if any, made otherwise. (6) Where in a hotel or a restaurant, entertainment by way of cabaret or floor show (by whatever name called, but excluding a mere band in attendance or recorded music) is provided along with any meal or refreshment with a view to attracting customers, whether or not [aggregate payment required for admission] is charged distinctly for such entertainment, [thirty per cent] of the amount payable by the customer for such meal or refreshment or the amount charged distinctly for such entertainment, whichever is higher, shall be deemed to be the [aggregate payment required for admission] to such entertainment and the tax shall be levied and paid accordingly. 7. Where in a hotel, entertainment by way of cable service is provided in rooms or other places, the entertainment so provided in each room or other place shall be deemed to be a separate entertainment and the subscription for admission to each such entertainment shall be deemed to be equal to the amount of subscription charged from a subscriber in the vicinity of the hotel by the cable operator providing cable service in the hotel, and the tax shall be levied and paid on the basis of such subscription : Provided that where the cable operator himself is the proprietor of the hotel, the subscription for admission to each such entertainment shall be deemed to be equal to the amount of subscription charged from a subscriber in the vicinity of the hotel by any other cable operator.” 5. Perusal of Section 2(g) of the Act would demonstrate that entertainment means when a person is admitted for payment in a place where exhibition, performance, amusement, game, sport or race is being held. Perusal of Section 3 of the Act would reveal that entertainment tax shall be levied and paid for admission to any entertainment. 6. Mr. Perusal of Section 2(g) of the Act would demonstrate that entertainment means when a person is admitted for payment in a place where exhibition, performance, amusement, game, sport or race is being held. Perusal of Section 3 of the Act would reveal that entertainment tax shall be levied and paid for admission to any entertainment. 6. Mr. N.S. Pundir, learned Brief Holder, appearing for the State contends that in the various lakes of Nainital, boats, paddle boats, kisti and yacht are available and offered to the tourist; entertainment tax is levied only on the paddle boats and is not being levied on the other boats, kisti and yacht saying in other boats, kisti and yacht owner thereof puts manual labour while in the matter of paddle boats, tourist uses paddles to enjoy boat ride; therefore, use of paddle boat by the tourist would amount to entertainment. 7. I am afraid, I cannot accept such a suggestion advanced by learned Brief Holder. There seems to be no valid reasons to discriminate between manual boats, kisti and yatch on the one hand and paddle boat on the other hand. Classification, as suggested by Mr. Pundir, learned Brief Holder seems to be totally arbitrary, unjustified and irrational. 8. I find force in the submission of learned counsel for the petitioners that if entertainment tax is imposed for entering into the area wherein joy rides of various boats are available for the purpose of enjoying boating, perhaps matter would have been otherwise; however, for using the paddle boats, entertainment tax neither can be levied nor can be recovered under Section 3 read with section 2(g) of the Act. 9. In Writ Petition No. 164 of 2014, undisputedly, amusement park of Kempty Fall, was/is exempted from the Entertainment Tax, therefore, entertainment tax for the paddle boat being used in the same amusement park, cannot be said to be legal. 10. Consequently, all the writ petitions are allowed. Impugned orders are hereby quashed. It is held that no entertainment tax can be levied and recovered from the paddle boat owners or users. 11. No costs.