WPMS/83/1994 of USHA BREECO LIMITED Vs COMMISSION OF ENTERTAINMENT TAX on 31 December 2012

(1) Writ Petition No. 1031 (M/S) of 2007

(Old No. 1044/1997)

1- Usha Breco Limited, Chandi Devo Rope Way, Near Gauri Shankar Temple, Hardwar, through its Divisional Manager, Sri M.J. Raghuram, 2- Sri K.P. Pandey S/o Sri Ram Kishore Pandey, R/o Haridwar, a shareholder of Usha Breco Ltd. - Petitioners

Versus

1. State of U.P. through its Chief Secretary, State Secretariat, Vidhan Sabha Marg, Lucknow. State Secretariat, Vidhan Sabha Marg, Lucknow.

2. Commissioner of Entertainment Tax, U.P. Jawahar Bhawan, Ashok Road, Lucknow. Jawahar Bhawan, Ashok Road, Lucknow.

3. The District Entertaiment Tax Officer, Office of District Magistrate Entertainment Tax Section, Haridwar. Office of District Magistrate Entertainment Tax Section, Haridwar.

4. Upper Mukhya Adhikari, Zila Parishad, Haridwar. – Respondents

(2) Writ Petition No. 1030 (M/S) of 2007 (Old No. 83 of 1994) (Old No. 83 of 1994)

Usha Breco Limited, Upper Road, Haridwar, through its Resident Manager, Sri R.A. Sharma - Petitioner

Versus

1- Commissioner of Entertainment Tax, U.P.

Lucknow.

2- District Magistrate/Collector Haridwar.

3- Additional District Magistrate (Entertainment Tax Section), Haridwar.

4- Additional District Magistrate (Finance and Revenue)

Haridwar.

5- Tehsildar, Sadar, Haridwar - Respondents

(3) Writ Petition No. 1032 (M/S) of 2007

(Old No. 1376/1997)

1- Usha Breco Limited, Chandi Devi Rope Way, Near Gauri Shankar Temple, Hardwar, through its Divisional Manager, Sri M.J. Raghuram, 2- Sri K.P. Pandey S/o Sri Ram Kishore Pandey, R/o Haridwar, a shareholder of Usha Breco Ltd. - Petitioners

Versus

1- State of U.P. through its Chief Secretary, State Secretariat, Vidhan Sabha Marg, Lucknow.

2- Commissioner of Entertainment Tax, U.P. Jawahar Bhawan, Ashok Road, Lucknow. Jawahar Bhawan, Ashok Road, Lucknow.

3- The Additional Commissioner, Entertainment Tax, U.P. Jawahar Bhawan Ashoka Road, Lucknow. Entertainment Tax, U.P. Jawahar Bhawan Ashoka Road, Lucknow.

4- The District Entertaiment Tax Officer, Office of District Magistrate Entertainment Tax Section, Haridwar. Office of District Magistrate Entertainment Tax Section, Haridwar.

5- Executive Commissioner, Haridwar Municipal Board, Haridwar Haridwar Municipal Board, Haridwar – Respondents Sri Navneet Kaushik, Advocate for the petitioners. Sri A.S. Rawat, Additional Advocate General along with Mr. I.P. Kohli, Standing Counsel on behalf of State/respondent. Sri Pankaj Miglani, Advocate for the Nagar Palika Haridwar [Hon’ble B.S. Verma, J. )

Since similar controversy is involved in the above noted three writ petitions, therefore, all the writ petitions were heard together and are being decided by this common judgment.

In Writ Petition No. 1031(M/S) 2007, the petitioner has sought a writ in nature of certiorari for quashing the letter dated 17[th]February, 1997, Annexure No. IV to the writ petition, by which the District Entertainment Tax Officer, Office of District Magistrate Entertainment Tax Section, Haridwar has directed the petitioner to pay entertainment tax @ 30% of the passenger fare charged by the petitioner Usha Breco Limited.

In Writ Petition No. 1032 (M/S) of 2007, the petitioner has sought a writ in the nature of certiorari for quashing the Officer Order dated 28-2-1997, Annexure No. I to the writ petition, by which the Commissioner of Entertainment Tax, U.P. Lucknow, has directed the petitioner to pay entertainment tax.

In the above two writ petitions, direction is also sought to declare Section 2(g) of U.P. Entertainment and Betting Tax, as ultra vires, so far as it is applicable to the aerial ropeways being run by the petitioners.

In Writ Petition No. 1030 (M/S) of 2007, writ in the nature of certiorari has been sought to quash the order dated 13.1.1994, Annexure No.5 to the writ petition, by which the Additional District Magistrate, (Finance) Haridwar, imposed entertainment tax upon the petitioner.

Facts

By way of amendment sought through CLMA No. 8009/2012 filed in Writ Petition No. 1031(M/S) of 2007, the prayer was sought to issue a writ in the nature of certiorari for quashing the notification No.58/2010/XXVII(9)/Mano.kar-28/2009 dated 6-9-2010, so far as it relates to imposition of entertainment tax on ropeway at the rate of 20% of each payment for admission.

Brief facts giving rise to the present writ petitions, are that the petitioner Usha Breco Limited, is engaged in the business of designing, supplying, civil engineering, erection, commissioning, maintaining and operation of the aerial passenger ropeways. The petitioner Sri Ram Kishore Pandey is a shareholder of the petitioner company. In order to provide transportation of passengers for easy and comfortable access to Chandi Devi Temple and Goddess Mansa Devi Temple, the petitioner entered into an agreement with the Zila Parishad Haridwar and Municipal Board Haridwar for operating aerial ropeways for the sole purpose of carriage of passengers. As per agreements, the petitioner installed ropeways from the lower terminal adjacent to Gauri Shanker Temple to upper terminal adjacent to the Chandi Devi Temple and from lower terminal station situated in the leased land to upper terminal station situated in the leased lands near Mansa Devi Temple.

It is alleged by the petitioner that the ropeways are established by the petitioner only to facilitate the transportation of the pilgrims for a visit to Mansa Devi and to Chandi Devi Temples. The pilgrims after having Darshan of the above Temples board the ropeways to return to the lower terminals. There is no question of entertainment for the pilgrims for having Darshan of the religious temples of Mansa Devi and Chandi Devi and the sole purpose of their visit to the hill top is the pilgrimage and there is no source of entertainment for them at the hill top. It is also alleged by the petitioner that as per provision of Section 2(g) of the U.P. Entertainment and Betting Act, 1979 (for short ‘the Act’) ‘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. Although the power to make laws for ropeways is with the State Government under Entry No.13 List-II, but there is no specific power with the State Government to levy taxes on the carriage of passengers by ropeways as compared to the specific power to levy tax on entertainment, amusement etc. The power of the State Government to levy tax on goods and passengers is limited to only those who are carried or transported by road or on inland water-ways. The carriage of passengers by aerial ropeways cannot be said to be carriage by road or on inland water-ways. The carriage/transportation of passengers by aerial ropeways is a means of aerial transport and, as such, the power to levy tax on such carriage would be with the Union Government in view of Entry 89 List I of the Seventh Schedule to the Constitution. It is also alleged by the petitioner that the petitioner was to pay lease rent and consumption of electricity, house tax and water tax. But surprisingly enough the respondents issued impugned notices/office orders asking the petitioner to deposit entertainment tax, whereas the main and predominate use of the ropeways is transportation and nothing else and as such the running of ropeways canot be termed as providing entertainment to the passengers so as to bring the ropeways within the ambit of Act and the demand of entertainment tax is illegal and is liable to be quashed.

The writ petitions have been resisted by the respondents by filing counter affidavits. The stand taken by respondents is that the first ropeway was introduced in the State in Mussoorie and subsequently at Nainital, the objective behind providing the ropeway was to save time and physical exercise involved in reaching the hill top and also to provide ample visibility of the sight all around. Thereafter the ropeways in question came into existence. The petitioner is a commercial organization. According to the agreement between the petitioner and Nagar Palika Parishad dated 15-5-1974 ropeway was erected for purpose of business. There had been a proposal between the petitioner and Nagar Palika Parishad for installing a plant and equipment for the transportation by cabin ride aerial ropeway of passengers from Brahmapuro to Mayapur Block, the name of Mansa Devi is mentioned. Under the agreement the petitioner was to run cafeteria, snack bar and amusement center for entertainment of the passengers, inter alia in transit building at the upper terminal station of the said cabin ride aerial ropeway. The representatives of petitioner have accepted that the people using cabin ride feel thrill and enjoyment in natural way. It is further alleged in the written statement that ropeway cabin ride comes under the purview of ‘entertainment’ as envisaged under U.P. Entertainment & Betting Tax Act, 1979. It is also alleged that the passengers are always taxable uniformally whether on the hills or on a hill top or even in any place of pilgrimage therefore the levy of tax is neither ultra vires nor arbitrary, nor illegal nor violative of Article 19(i)(G), 245, 265, 300-A because the U.P. Entertainment and Betting Tax Act to the extent defined is enforceable and entertainment tax having been imposed by authority of law, can never amount to deprival of property as has been alleged. It is totally wrong to allege that the instant cases fall within the provision of entry 89 of List-1 pertaining to terminal taxes on goods and passengers carried by Railway, Sea or Air Or Railway fares and freights, because the ropeway cabin is never comparable to an aeroplane. Entry 33 of List-II of the VIIth Schedule deals with theatre and dramatic performance cinemas, sports, entertainments and amusements and because the instant case of employing the ropeways for resort and entertainment equally amounts to amusement taxable under the said Act, 1979.

Petitioner also filed rejoinder affidavits and reiterated that the ropeways are being run for transportation of passengers for the Darshan of the temples and no entertainment tax is liable to be levied on the petitioner.

In Writ Petition No. 1031 (M/S) 2007, this court on 24-7-2009, had directed the petitioner to file supplementary affidavit giving details and clarifying the facts mentioned in the petition as well as in the affidavit within four weeks and State was also directed to file additional counter affidavit explaining the paragraphs which are vague and submit the documents.

In compliance of order of this court the petitioner filed supplementary affidavit and in para-7 it has been alleged that there is no activity of entertainment and/or amusement at the terminal station or for entry of which, any charge is made by the petitioners in the fare. Petitioners have only small temporary kiosks/counters provided for at the lower station and the terminal station, which are let out to different vendors, who sell different products for consideration. It has been alleged that five kiosks/counters are running at lower station and 13 small counters/kiosks are at the upper station, details of which has been given in the supplementary counter affidavit. It is further alleged that none of the activities or goods at the shops are given or offered to the passengers free of costs or are charged in the ropeway fare. There is also no compulsion on any one to buy goods provided at the said establishments and/ or to pay any charges, unless the passengers so require. The entire fare charged by the petitioners at the ropeway is entirely for purpose of transporting passengers from one point to other and there is no element of entertainment or amusement and/or any other activity provided to the passengers, which is included in the fare. The learned Commissioner has failed to appreciate that for the purpose of determining whether the activities of transportation of passengers amount to entertainment or not, the test has to be objective test, i.e. nature of service/goods provided and received and no subjective test, which has been applied by Commissioner. Merely because, some people may get pleasure in travelling by ropeways, will not change the objective of the payment made for travelling thereon.

In reply to supplementary affidavit, the State filed supplementary counter affidavit and reiterated the facts narrated in the writ petition. It has been alleged in the supplementary counter affidavit that clause 2(g) of U.P. Entertainment and Betting Tax Act, 1979, is legally competent to define ropeway run by petitioner as Entertainment or Equipment of providing Entertainment/Amusement. The ropeway run by the petitioner falls in the ambit of entertainment tax under Section 3(1) of the Act. The Constitutional provisions of the rights and power to make Act and Rules relating to the entertainment firmly explain that State of Uttarakhand has absolute power in State List of Constitution and State of Uttarakhand has issued G.O. No. 58/2010/XXV11(9)Mano. Kar-28/2009 Dated 6-9-2010. In the Schedule 5(b) it is clearly indicated that 20% of admission fee is liable as entertainment tax on ropeway including other entertainments. Copy of aforesaid G.O. has been annexed as Annexure No.SCA-1.

Conclusion

After the amendment in the writ petition No. 1031 (M/S) 2007, the petitioner also sought quashing of Notification dated 6-9-2010 so far as it relates to imposition of entertainment tax on rope-way, the respondent has filed reply by filing supplementary counter affidavit. In the supplementary counter affidavit the stand taken in the counter affidavit has been reiterated. It is further alleged in the supplementary counter affidavit that the definition of entertainment as contained under Section 2(g) of the U.P. Entertainments and Betting Tax Act, 1979 is an inclusive definition and not exhaustive and a thing which is not necessary is an entertainment, consequently, the ropeway is an entertainment within the ambit of Section 2(g) of the Tax Act. In para-5 of the supplementary counter affidavit it has been alleged that the prayer for declaring the Section 2 (g) of the U.P. Entertainment and Betting Tax Act ulta vires is wholly misconceived as it is well settled that the vires of an Act can be challenged only on two grounds namely-(a) lack of competent and (b) violation of any of the provision of the Constitution of India including part III of it, but the petitioner has not shown as to how the State Legislature has no competent to enact the said provision which has been made in exercise of powers conferred under Article 246(3) of the Constitution of India nor the same in any manner violates any provisions of the Constitution of Indian much less a provision conferred under Part-III of the Constitution of India.

In para-6 of the supplementary counter affidavit it is pleaded that against the order dated 28-11-1996 passed by Hon’ble Allahabad High Court in writ petition No. 373 of 1996 filed by the petitioner itself has remitted the matter with a direction to Commissioner to decide afresh within a period of three months against the petitioner preferred a Special Leave Petition and the same was dismissed as withdrawn.

In para-7 of the supplementary counter affidavit, it has been alleged that the Apex Court has not touched the finding of Division Bench of Allahabad High court and since the order dated 17-2-1997 has been passed in compliance of the judgment of Allahabad High Court, it is not open for the petitioner to challenge the vires of the Act or its application as the said issue stand concluded under the judgment of the Allahabad High Court wherein also the challenge was made to the Tax Act, but the same are deemed to be repelled by the Division Bench of Allahabad High Court and even the Apex Court has not made it open for the petitioner to re-agitate the matter regarding the validity of the Act or its application.

It is further alleged in para-9 of the supplementary counter affidavit that the notification dated 9-6-2010 issued in exercise of powers conferred under the Tax Act read with section 21 of the U.P. General Clauses Act is well within the competence of the State Government and the petitioner who is providing an entertainment has no option, but to deposit the entertainment tax.

Heard learned counsel for the parties and perused the record.

The relief sought by the petitioner is to the effect that the entertainment tax imposed by the respondents be set aside and declaration be made that provisions of U.P. Entertainment and Betting Tax Act, 1979 are not applicable to the petitioner Company on carriage of passengers by aerial ropeways to Chandi Devi Temple and Mansa Devi Temple. By amendment further relief has been sought that the notification dated 6-9-2010 be quashed so far as it relates to imposition of entertainment tax on rope way under the U.P. Entertainment and Betting Tax Act, 1979.

The main question to be decided in these writ petitions is whether the petitioner Company is liable to pay entertainment tax on carriage of passengers by aerial ropeways to Chandi Temple and Mansa Temple under the U.P. Entertainment and Betting Tax Act, 1979, or not and the State Government has the competence to issue notification imposing entertainment tax on rope way.

The submission raised on behalf of the petitioners, is that ropeways are statutorily recognized as means of transportation and is excluded from entertainment tax and the Petitioner Company cannot be held liable to pay entertainment tax on the ropeways under the U.P. Entertainment and Betting Tax Act, 1979.

On the other hand, the submission of learned Addl. Advocate General is that the ropeways are used for the convenience of tourists, and the passengers feel thrill and enjoyment in natural way and the use of ropeways comes in the purview of ‘entertainment’ as envisaged under U.P. Entertainment & Betting Tax Act, 1979.

To decide the controversy certain provisions U.P. Entertainment and Belting Tax Act 1979 and Constitution of India need to be examined.

Word ‘Entertainment’ is defined in Section 2(g) of the U.P. Entertainment Betting Tax Act, 1979, which reads as under:- ‘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 cinematographic exhibitions, includes the exhibition of news reels, documentaries, cartoons, advertisement shots, or slides, whether before or during the exhibition of a feature film or separately.’

From a plain reading of above, it is quite obvious that transportation of passengers by ropeways is not included in the ‘entertainment’, only word ‘amusement’ is included, and by using the ropeways to the holy temples of Chandi and Mansa Devi, cannot be termed an amusement. The pilgrims visit these temples for Darshan having religious spirit. There is no place of enjoyment in between the ropeways and at the site of Temples there are shops having articles of puja and charawa. There might be some restaurant for tea, snack etc. but the same cannot be termed as means of amusement and enjoyment.

Entry 13 of List II of Schedule-7 of Constitution of India recognizes ropeways as a means of communications and confers legislative competence on the States to enact laws regulating such activity. Entry 13 reads as under:

‘13. Communications, that is to say, roads, bridges, ferries and other means of communication not specified in List I; municipal tramways; ropeways; inland waterways and traffic thereon subject to the provisions of List I and List III with regard to such waterways; vehicles other than mechanically propelled vehicles.’

From above, it is quite clear that the ropeway comes within the purview of communications, as per entry 13 above.

The U.P. Entertainment and Tax Act 1979 has been enacted consequent to the legislative power conferred on the State by Entry 62 of List-II, which reads as under:- ‘62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.’

The tax charging section of the said Act reads as under:-

‘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 on entertainment to which Section 4 or Section 4-A 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 percent of each such payment as the Statement 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.’

Further entry 56 provides taxes on goods and passengers carried by road or on inland waterways and entry 57 provides taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List III.

The taxes on goods and passengers carried by road or on waterways under entry 56 and also taxes on vehicles under 57 are compensatory taxes designed to compensate Government for the expenses incurred in maintaining public roadways and public waterways. As against this Government does not incur any expenditure, in relation to ropeways, and there is absence of any entry conferring power on the State to levy taxes on ropeways. The State can levy entertainment tax on under the head of ‘amusement’ contained in the definition of ‘entertainment’ under Section 2(g) of U.P. Entertainment and Betting Act, 1979. As per entry 13 of List II of Schedule-7 of Constitution of India, ropeway has been placed as means of communication. The competence of State government is to impose tax on the ropeways under the head of ‘communication’ and not under the head ‘amusement’ as has been done in the instant case.

The learned counsel for the petitioner has placed reliance upon the judgment of Commissioner of Central excise Pondicherry versus Acer India Ltd. reported in (2004) 8 Supreme Court Cases 173, whereinit has been observed by the Apex Court that while levying excise duty an interpretation leading to wide-scale evasion of duty, should be avoided and a user-friendly interpretation should be adopted.

In another case of M/s Geeta Enterprises and others vs. State of U.P. and others, reported in AIR 1983 Supreme Court 1098, the issue before the Apex Court was whether video show is exigible to tax under Section 3 of U.P. Entertainment and Betting Tax Act. It has been observed by the Apex Court as under:-

‘The word ‘entertainment’ has been used in S. 2(3) in a very wide sense so as to include within its ambit, entertainment of any kind including one which may be purely educative. Sub-section (3) itself by using the word ‘entertainment’ as ‘any exhibitional performance, amusement game or sport to which persons are admitted for payment’ has extended the scope of entertainment to expressly include any kind of amusement, game or sport. By operating the video, the operator of the video pays 50 paise per 30 seconds for playing the games, sports and other kind of performance which are shown on the machine and which can be watched by interested spectators. The circumstance that no admission fee is charged from viewers of video by itself, however, cannot defuse or alter the kind of entertainment derived by the person who pays for playing the games. The fact that for playing the video games a great amount of skill is required is not material because he would derive pleasure and be entertained regardless of whether he possesses skill or not. If he possesses skill he may derive more pleasure on less payment otherwise he will have to pay but he will derive pleasure all the same. Besides, the game brings a substantial return for the person who makes available these facilities. Hence such an exhibition falls within the purview of the word entertainment as envisaged in sub- section (3). The money charged for use of the video machine is an admission to entertainment and the payment made by the person who uses the machine is the payment for admission. It is a payment connected with entertainment, which a person is required to make as a condition of attending the entertainment. Hence as video show is clearly exigible to tax under Section 3 of the Act.”

It has further been observed that the crux of the matter is as to whether or not the show falls within the four corners of the expression ‘entertainment’. Sub section (3) of Section 2 of the Act defines the ‘entertainment’ which includes any exhibitional performance, amusement, game or sport to which persons are admitted for payment.

The word ‘entertainment’ has been defined in Webster’s Third New International dictionary at page 757 as –

‘entertainment’ the act of diverting, amusing, or causing someone’s time to pass agreeably.’

‘Something that diverts, amuses, or occupies the attention agreeably.’

Similarly in the Concise English Dictionary by Hayward and Sparkes the word ‘entertainment’ has been defined as- ‘the art of entertainment, amusing or diverting, the pleasure afforded to the mind by anything interesting, amusement, other performance indented to amuse.’

Thus in wider sense the word ‘entertainment’ can be taken amusement, any act which may afford pleasure to the mind or occupies one’s attention towards anything interesting.

It has been contended on behalf of State that the Apex Court has not touched the finding of Division Bench of Allahabad High court and since the order dated 17-2-1997 has been passed in compliance of the judgment of Allahabad High Court, it is not open for the petitioner to challenge the vires of the Act or its application as the said issue stand concluded under the judgment of the Allahabad High Court wherein also the challenge was made to the Tax Act, but the same are deemed to be repelled by the Division Bench of Allahabad High Court and even the Apex Court has not made it open for the petitioner to re-agitate the matter regarding the validity of the Act or its application.

By a perusal of order dated 28-11-1996 passed by Division Bench of Allahabad High Court in W.P. No. 37 of 1996, it shows that District Magistrate Haridwar issued an order dated 15.12.1992 directing the petitioner to deposit the entertainment tax at the rate prescribed. The petitioner filed objection against the said notice. Another notice dated 12.2.1993 was issued to the petitioner asking it to deposit the entertainment tax for the period from July 1993 to November, 1993. Against the said notice petitioner filed W.P. No. 635(T) of 1993 before Allahabad High Court in which stay order was granted to the petitioner. Another order dated 13.2.1994 was issued by A.D.M. Haridwar asking the petitioner to deposit the amount. Against the said order petitioner filed another W.P. No. 83 of 1994 in which matter interim order was granted. Writ Petition No. 635 of 1993 was disposed of on 10-7-1995 directing the concerned authority to deal with the matter afresh. Thereafter notice dated 30-10-1995 was given to the petitioner calling upon it to submit its reply. The petitioner submitted its reply and Commissioner of Entertainment Tax U.P. passed order dated 2.4.1996 holding the petitioner liable to pay the entertainment tax under the Act. Feeling aggrieved the petitioner filed W.P. No. 373 of 1996. In the above writ petition the Division Bench of Allahabad High Court directed the Commissioner to decide the matter afresh after spot inspection/survey in the presence of authorized representative of petitioner. Against above order Special Leave to Appeal (Civil) No. 1675 of 1997 was preferred before the Apex Court and the Apex Court vide order dated2-5-1997 dismissed the SLP as withdrawn. The order passed by Apex Court is quoted below:- ‘We have not gone into the merits of the questions raised because the consequential order passed pursuant to the order of the High Court has been challenged in the High Court itself. The Special Leave Petition is dismissed as withdrawn.’

The Additional Entertainment Tax Commissioner in compliance of order of the High Court dated 28-11-1996 after inquiry again issued notices to the petitioner to deposit the tax

against which the present writ petitions are filed. From above, it is quite clear that the Division Bench of Allahabad High Court had passed interim order in favour of the petitioner and has directed the Commissioner to decide the matter afresh at its level. In the order of Allahabad High Court there is no direction which may not permit the petitioner to agitate the matter. The issue whether the petitioner is liable to pay entertainment or not has not yet been decided and the issue has to be decided in the present writ petitions. So far as the order passed by Hon’ble Apex Court is concerned has dismissed the S.L.P. without entering in the merits of the question on the ground the question has been challenged in the High Court. Thus the submission of the State Counsel is of no avail that the petitioner cannot re-agitate the matter on the basis of orders passed by High Court and the Hon’ble Supreme Court.

In view of discussion made in the foregoing paragraphs, the State has competence in view of Entry-13 of List-II of Schedule-7 of Constitution of India which recognizes ropeways as a means of communications and confers legislative competence on the States to enact laws regulating such activity. The United Provinces Aerial Ropeways Act, 1922 is in force in State of Uttarakhand also as it was in force in the State of U.P. by the enactment. Amendment if any could be made for imposing any type of tax under that Act. As on today the said Act does not contain provision to impose the entertainment tax on ropeways. The power under U.P. Entertainment and Betting Tax Act, 1979 was enacted consequent to the Legislative powers conferred on the State by Entry 62 of List –II of Schedule-7 of Constitution of India. The learned Entertainment Commissioner has imposed the entertainment tax considering the ride of rope-ways as an amusement. The finding of learned Commissioner on this issue is totally perverse finding and the State Government instead of making amendment in the United Provinces Aerial Ropeways Act, 1922, issued the impugned notification in exercise of power under the U.P. Entertainment and Betting Tax Act, 1979 and added sub-clause (b) in clause-5 of impugned notification dated 6-9-2010, making a provision of 20% tax of each payment for admission over rope-ways. This notification dated 6-9- 2010, was issued without legislative competence under the U.P. Entertainment and Betting Tax Act, 1979, and in any view of the matter, as discussed above, on the rope-way cannot be said to be amusement under the U.P. Entertainment and Betting Tax Act, 1979.

Thus, for the discussion made in the foregoing paragraphs, it is quite clear that the State Government has no competence to impose entertainment tax on the ropeways installed at Chandi Devi and Mansa Devi Temples under the provision of Section 2 (g) of U.P. Entertainment and Betting Tax Act, 1979 and the Notification dated 6-9-2010, so far as making provision of 20% tax of each payment for admission over ropeway, under sub clause (b) of clause 5 has been issued without legislative competence. Therefore, the Notification No. 58/2010/XXVII(9)/ Mano.kar-28/2009, dated 6[th]September, 2010, is quashed in respect of sub-clause (b) of clause-5 and rope way is treated to be deleted from the said Notification as no tax under the head ‘entertainment’ is payable on ropeway.

Consequently, the letter dated 17[th] February, 1997, Annexure No. IV to the W.P. No. 1031(M/S) 2007 issued by District Entertainment Tax Section, Haridwar; the Office Order dated 28-2-1997, Annexure No.1 to W.P. No. 1032(M/S) of 2007 issued by Commissioner of Entertainment Tax, U.P. Lucknow; and the order dated 13.1.1994, Annexure No.5 to the W.P. No. 1030(M/S) 2007 issued by Addl. District Magistrate (Finance) Haridwar, are hereby quashed.

All the writ petitions are allowed. The impugned notices demanding entertainment tax from the petitioner are hereby set aside. If the petitioner has deposited any entertainment tax, the same shall be refunded to it.

Let a copy of this order be placed in each file of the writ petitions.

ISB

(B.S. Verma, J. ) 31-12-2012

It is pertinent to mention here that the Allahabad High Court in writ petition Nos. 635(T)/1993, 83(T)/1994 and 373 (T)/1996 vide order dated 28-11-1996 gave directions to decide the issue as per rules within three months. In compliance of above direction, Additional Entertainment Commissioner was appointed as enquiry officers and the Commissioner Entertainment Tax Department issued direction to petitioner vide impugned order dated 28-2-1997 to deposit the entire balance amount of entertainment tax deposited in the government treasury and in future entertainment tax be regularly deposited in government treasury. In the impugned order it was held that subsequent to giving the land on lease domain of the Municipality is limited but due to these facts that there being no objection regarding cafeteria, restaurant in the agreement and making the arrangements generally for establishing the ropeways and these arrangements being especially for the tourists and the ropeway being mostly used by the tourists since objective of the visitors is to go by walk which they believe is the healthiest, holy and meaningful and the use of the ropeway is with the objectives of entertainment and amusement alongwith earning of profit in the form of a commercial establishment, hence the entertainment tax is liable to be paid.

Further in writ petition No. 1148 of 2003 (M/B) Usha Breco Ltd. versus State of U.P. and others, the Division Bench of this Court while disposing of the Civil Misc. Application No. 5256 of 2004, moved by petitioner to cancel the attachment of its properties in lieu of recovery of entertainment tax, vide order dated 16-9-2004, cancelled the attachment and directed to return back the amount of Rs. 1,00,000/- recovered as a condition to continue the ropeway and all the proceedings initiated for the recovery of the amount of 50% was treated to be cancelled and the stay order already granted to directed to continue.