THE STATE OF MAHARASHTRA & ORS. versus PAN INDIA PARYATAN LIMITED & ANR. on 18 February 2020

652

SUPREME COURT REPORTS

[2020] 1 S.C.R.

ATHE STATE OF MAHARASHTRA & ORS.

v.

PAN INDIA PARYATAN LIMITED & ANR.

(Civil Appeal Nos. 6438-6439 of 2009)

BFEBRUARY 18, 2020

[DEEPAK GUPTA AND HEMANT GUPTA, JJ.]

Bombay Entertainments Duty Act, 1923: ss. 3(1)(b), 3(2),3(5)(a) and (b) – Duty on payments for admission to entertainment– Levy of entertainment duty for entry in amusement park –CRespondent was running an amusement park and was required topay entertainment duty – Respondent sought confirmation thatentertainment tax to be levied @ 3.75% of the value of a consolidatedticket, however, demand of entertainment duty @7.5% and [REDACTED]% from the respondent – Respondent paid in protest – WritDpetition challenging the provisions of the Act and seeking refund ofthe duty paid – High Court held that entertainment duty to be leviedfor the amusement park is 50% of 15% i.e. 7.5% u/s. 3(2), thus, interms of s. 3(5)(a) and (b), the entertainment duty is 50% of 7.5%i.e. 3.75% – On appeal, held: In respect of the first three years fromthe date of commencement of the amusement park, no entertainmentEduty is payable – However, in respect of the subsequent two years,the rate of duty leviable is u/s.3(1)(b) or, as the case may be, u/s.3(2) – All amusement parks for all entertainment are not entitled toconcessional duty in terms of s. 3(2) of the Act, thus, respondentscannot claim benefit u/s.3(2) – Amusement parks would be entitledFto only one benefit either u/s. 3(2) or u/s. 3(5)(a) – Since s.3(2) isnot applicable to all amusement parks for all other activities,therefore, the entertainment duty in terms of s.3(5)(a) alone wouldbe leviable – Order of the High Court that in terms of s. 3(5)(a), theentertainment duty is 50% of the duty payable u/s. 3(2) cannot beaccepted and is set aside.G

Allowing the appeals, the Court

HELD: 1.1 Sub-clause (ii) of Section 3(5)(a) of the BombayEntertainments Duty Act, 1923 contemplates that duty @50%under clause (b) of sub-section (1) or, as the case may be, sub- H

section (2) of Section 3 would be payable. In respect of the firstpart of sub-clause (ii) of Section 3(5)(a) of the Act, theentertainment duty is 50% of 15% leviable under Section 3(1)(b)of the Act. It is sub-section 3(2) of the Act which is required to beinterpreted. The said provision is in respect of charging of dutyat 50% of the duty fixed in Section 3(1)(b) of the Act to the specificcategory of visitors to the amusement parks such as payment in“lump sum as a subscription or contribution to any society”, or“for a season ticket” or “for the right of admission to a series ofentertainments” or “any entertainment during a certain periodof time”. The writ petitioners do not fall in any of the fourcategories. Category (a) is subscription or contribution in lumpsum to any society. The writ petitioners would not fall in suchcategory as the payment is not to any society. It is not the case ofwrit petitioners that they have issued a season’s ticket to thevisitors. Category (d), that entry would be on charging 50% ofthe duty fixed for any entertainment during a certain period oftime, depends upon the decision of the State Government and/orMunicipal Corporation to grant that relaxation to enable the writpetitioners or such other amusement park owners to charge dutyat a lesser rate. [Para 12-15][660-B-H]

1.2 The amusement park is defined under Section 2(a-1) ofthe Act to mean a place wherein various types of amusementsincluding games or rides or both are provided fairly, on apermanent basis, on payment for admission. The payment foradmission is defined under Section 2(b) of the Act as the paymentmade by a person having admitted to one part of a place ofentertainment and subsequently admitted to another part. Section2(d) of the Act deals with admission to an entertainment whichincludes admission to any place in which the entertainment isheld. It cannot be said that when a lumpsum amount is paid as aright of admission for all rides and games, then it becomesadmission to series of entertainment. The writ petitioners issueone ticket including one or more rides or games situated in onecompound. It is not the case of the writ petitioners that for everyride or game, it is charging separately. The admission toentertainment in terms of Section 2(d) of the Act includes all ridesand games which are provided by the service provider. The series ABC

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Aof entertainment as contemplated by Section 3(2) of the Act doesnot mean that on a single day ticket for one entry, it can be treatedto be a series of entertainments. The series of entertainmentscan be where the facility for a game or ride is provided on multipledays and a combined ticket is issued for events for each day. Itwill only then be said to be series of entertainment. [Para 16,B17][661-B-E]

1.3 Once an admission ticket is granted, it is not in termsof Section 3(2) of the Act but only in terms of Section 3(1)(b) ofthe Act. Section 3(2) of the Act has no applicability for a visitor toan amusement park who does not fall in any of the four categoriesCmentioned in Section 3(2) of the Act. Since, the activitiesundertaken by the writ petitioners are not failing part of Section3(2) of the Act, therefore, they are not entitled to rebate of 50%provided to specified category of persons in Section 3(2) of theAct. [Para 18][661-F-G]

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1.4 Section 3(5)(a) of the Act has an overriding effect overSection 3(1)(b) and Section 3(2) of the Act. In respect of the firstthree years from the date of commencement of the amusementpark, there is no issue as no entertainment duty is payable. But,in respect of the subsequent two years, the rate of duty leviableEis under clause (b) of sub-section (1) or, as the case may be, undersub-section (2) of Section 3. Section 3(1)(b) of the Act is applicableto all amusement parks whereas Section 3(2) of the Act has alimited applicability only in respect of the specified categoriestherein. All amusement parks for all entertainment are not entitledto concessional duty in terms of Section 3(2) of the Act. Therefore,Fthe writ petitioners cannot claim benefit under Section 3(2) ofthe Act. The argument is preposterous as the writ petitionersare firstly claiming the benefit under Section 3(2) of the Act andthen under Section 3(5)(a) of the Act. The amusement parks wouldbe entitled to only one benefit either under Section 3(2) or underGSection 3(5)(a) of the Act. Since Section 3(2) is not applicable toall amusement parks for all other activities, therefore, theentertainment duty in terms of Section 3(5)(a) of the Act alonewould be leviable. The duty under Section 3(2) of the Act wouldbe leviable only in respect of specified categories mentionedtherein. [Para 19][661-H; 662-A-C]H

1.5 The judgment of the High Court that in terms of Section3(5)(a) of the Act, the entertainment duty is 50% of the dutypayable under Section 3(2) of the Act cannot be accepted and isset aside. [Para 20][662-D]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 6438-6439 of 2009.

From the Judgment and Order dated 19.12.2006 of the High Courtof Judicature at Bombay in Writ Petition No. 111 of 1996 with WritPetition No. 2009 of 1998.

Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, NishantRamakantrao Katneshwarkar, Advs. for the Appellants.

Tejveer Bhatia, Sudeep Chatterji, Ms. Surbhi Singh, GauravSharma, Abhinav Mukerji, Advs. for the Respondents.

The Judgment of the Court was delivered by HEMANT GUPTA, J.

1. The challenge in the present appeals is to an order passed bythe Division Bench of the High Court of Judicature at Bombay on 19[th]December, 2006 whereby Sections 3(1)(b), 3(2) and sub-sections 5(a)and (b) of the Bombay Entertainments Duty Act, 1923[1] were interpretedto hold that the rate of tax payable by the respondents[2] would be asfollows:

“i. For the first three years from date of commencement of parkthe Petitioners are not required to pay any duty,

ii. Duty for the 4[th] and 5[th] year, from the date of commencement,duty payable is at the rate of 3.75%, applying concessionalprovision.

iii. Duty payable during 6[th] year from the date of commencementof park and there onwards, is at rate of 7.5%.”

2. The writ petitioners own and run an amusement park withinlimits of Greater Bombay which was opened to the public for admissionon 25[th] December, 1989. They charged a lumpsum amount for admissionand entertainment to the amusement park. In terms of the Act, the writpetitioners were required to pay entertainment duty.

1 for short, ‘Act’

2 for short, ‘writ petitioners’

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A3. In the writ petition before the High Court, the assertion of thewrit petitioners was that on 4[th] October, 1994, it sought confirmation thatentertainment tax to be levied would be 3.75% of the value of aconsolidated ticket. Such stand was accepted by appellant No. 2-TheCollector, Bombay Suburban District. Later, vide communication dated7[th] January, 1995, the writ petitioners were informed that they would beBrequired to pay duty @7.5% and not @3.75%. The writ petitionerschallenged such demand by way of writ petition. The said writ petitionwas withdrawn with liberty to file a fresh petition.

4. The State sought to recover the entertainment duty @7.5% inrespect of entry to the amusement park for the period from 16[th] September,C1994 to 24[th] December, 1994 and @15% from 25[th] December, 1994.The writ petitioners paid the duty under protest. In a writ petitionchallenging the provisions of the Act, the writ petitioners sought refundof the duty paid.

5. The High Court found that the following questions arose forDconsideration:

“i. Rate of entertainment duty payable by the Petitioners for aperiod from 16[th] September, 1994 to 24[th] December, 1994.

ii. Rate of duty payable for the period commencing 25[th] December,1994.Eiii. Whether action of Respondents in seeking to recover dutypayable during 25[th] December, 1989 to 23[rd] August, 1990 alreadyadjusted against refund payable to Petitioners, is justified and validin law. This question is raised by Writ Petition No. 2009 of 1998.”

F6. Before we consider the respective arguments of the learnedcounsel for the parties, the statutory provisions of the Act need to bereferred:

“2 (a-1). “amusement park” means a place wherein various typesof amusements including games or rides or both but excludingGexhibition by cinematograph and video exhibition are provided fairlyon permanent basis, on payment for admission; xxxx xx 2 (b) “payment for admission” in relation to the levy ofentertainments duty, includes- H

(i) any payment made by a person who, having been admitted toone part of a place of entertainment, is subsequently admitted toanother part thereof for admission to which a payment involvingduty or more duty is required, xx xxxx

(d) “admission to an entertainment”, includes admission to anyplace in which the entertainment is held or any place where fromthe entertainment is provided by means of cable connection fromany type of antenna with a cable network attached to it or cabletelevision for Direct-to-Home (DTH) Broadcasting service; xx xx xx (f) “entertainment duty”, or “duty” in respect of any entertainmentmeans the entertainment duty levied under section 3;

3. Duty on payments for admission to entertainment. –

(1) There shall be levied and paid to the State Government on allpayments for admission to any entertainment [except in the caseof video games, exhibition by means of any type of antenna orcable television, or exhibition by means of Direct-to-Home (DTH)Broadcasting service, bowling alley, Go-carting, dance bar,discotheque, amusement park, water sports activity, pool game] aduty (hereinafter referred to as “entertainments duty”) at thefollowing rates, namely:- (a)xx xxxx (b) In the case of every entertainment, [other than exhibition bycinematograph including video exhibition [video games andexhibition by means of any type of antenna or cable television]

Provided that, in the case of the cabaret entertainment, fifty percent of the total payment charged by the proprietor per personper show, whether with or without eatables or beverages andwhether regular tickets are issued or not, for admission to suchentertainment, shall be deemed to be the payment for admissionand duty shall be levied thereon accordingly under this clause:

Provided further that, the entertainment duty in respect of anamusement park shall be 15 per cent of the payment made A

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Afor admission to the amusement park, including payment madefor admission for games and rides, whether charges separatelyor not”

3(2) Where the payment for admission to an entertainment ismade by means of a lump sum paid as a subscription orBcontribution to any society, or for a season ticket or for theright of admission to a series of entertainments or to anyentertainment during a certain period of time, or for anyprivilege, right, facility or thing combined with the right of admissionto any entertainment or involving such right of admission withoutfurther payment or at a reduced charge, the entertainment dutyCshall be levied and paid on 50 per cent; of such lump sum at therates specified in clause (b) of sub-section (1).

3(5)(a) Notwithstanding anything contained in sub-section (2)or in any other provisions of this Act but subject to theprovisions of clause (b), on and with effect from the 25[th]DDecember, 1989, there shall be levied, and paid by theproprietor to the State Government, the entertainments dutyin respect of an amusement park in the following manner,namely:-

(i) for the first three years from the date of commencement ofEthe amusement park, no duty;

(ii) for the subsequent two years, at the rate of fifty per centof the rate of duty leviable under clause (b) of sub-section(1) or, as the case may be, sub-section (2) of section 3; F(iii) from the sixth years, full amount of entertainments dutyleviable at the rate of specified in clause (b) of sub-section (1) or,as the case may be, sub-section (2) of section 3.

Explanation.- For the purpose of this sub-section,- ********* ’’

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(emphasis supplied)

7. The High Court held that entertainment duty to be levied forthe amusement park is 50% of 15% i.e. 7.5% under Section 3(2) of theAct, therefore, in terms of Section 3(5)(a) and (b) of the Act, theentertainment duty is 50% of 7.5% i.e. 3.75%. The High Court held that H

such interpretation is on the basis of a cumulative reading of the provisionsof the Act.

8. The argument of the learned counsel for the appellants is thatSection 3(5)(a) of the Act starts with a non-obstante clause contemplatinglevy of an entertainment duty in respect of the amusement park, in themanner mentioned therein. Section 3(1) of the Act contemplates levy ofentertainment duty in respect of amusement park to be 15% of thepayment made for admission to the same. In terms of the non-obstanteclause with which Section 3(5)(a) begins, the levy of duty shall be interms of that sub -section. There is no difficulty in respect of sub-clause(i) of Section 3(5)(a) of the Act, which is to the effect that no duty shallbe payable. Sub-clause (ii) of Section 3(5)(a) of the Act contemplatesthat for the subsequent two years, duty @50% would be leviable underclause (b) of sub-section (1) or, as the case may be, sub-section (2) ofsection 3 of the Act.

9. The learned counsel for the writ petitioners argued that upon acollective reading of the definition of “amusement park” (which meansa place where various types of entertainment are provided on apermanent basis on payment for admission) and Section 3(2) whichprovides that upon payment of admission to entertainment by means ofa lump sum amount for the right to admission to a series of entertainments,the entertainment duty would be charged @ 50% of the rates mentionedin Section 3(1)(b). Thus, in the case where the amusement park chargesa lump sum amount as a right to admission for all the rides and gamesavailable in the said amusement park, then, Section 3(2) will be applicableand the entertainment duty payable by the amusement park would behalf of what is provided in Section 3(1)(b) being 15% i.e. 7.5%.

10. It is also argued that the proviso to Section 3(1)(b) ends withthe phrase “including payments made for admissions for games and rides,whether charged separately or not”. Thus, 15% entertainment tax waspayable by the amusement park where it charged an amount for mereadmission and the charges for the games and rides being separate.However, where the amusement park charges a lump sum amount whichincludes the charges for games and rides, the entertainment tax payablewould be 7.5 % in terms of Section 3(2).

11. It is argued that Section 3(5)(a) of the Act further gives a taxholiday on the duty payable under Section 3(1)(a) or Section 3(2) of the AB

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AAct, therefore, for the fourth and fifth year of the operation of theamusement park, the duty would be 3.75%.

12. We do not find any merit in the argument raised by learnedcounsel for the writ petitioners. In respect of first three years falling inSection 3(5)(a) of the Act, there is no dispute, as no duty is payable.BThe controversy revolves around the levy of entertainment duty for thefourth and fifth year and subsequently from the sixth year onwards.Sub-clause (ii) of Section 3(5)(a) contemplates that duty @50% underclause (b) of sub-section (1) or, as the case may be, sub-section (2) ofSection 3 would be payable. In respect of the first part of sub-clause (ii)of Section 3(5)(a) of the Act, there can possibly be no dispute as theCentertainment duty is 50% of 15% leviable under Section 3(1)(b) of the Act.

13. It is sub-section 3(2) of the Act which is required to beinterpreted. The said provision is in respect of charging of duty at 50%of the duty fixed in Section 3(1)(b) of the Act to the specific category ofDvisitors to the amusement parks such as payment in:-

a) “lump sum as a subscription or contribution to any society”, or

b) “for a season ticket” or

c) “for the right of admission to a series of entertainments” or E

d) “any entertainment during a certain period of time”

14. We find that the writ petitioners do not fall in any of the fourcategories as mentioned above. Category (a) is subscription or contributionin lump sum to any society. The expression Society is not defined in theAct. Therefore, Society would mean a Society registered under theFSocieties Registration Act, 1860 or other similar statutes. The writpetitioners would not fall in such category as the payment is not to anysociety. It is not the case of writ petitioners that they have issued aseason’s ticket to the visitors. A Season ticket would mean a regularvisitor visiting the amusement park regularly at a specific time.

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15. Category (d), that entry would be on charging 50% of theduty fixed for any entertainment during a certain period of time, dependsupon the decision of the State Government and/or Municipal Corporationto grant that relaxation to enable the writ petitioners or such otheramusement park owners to charge duty at a lesser rate.

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16. The prime argument turns around in respect of category (c)as delineated above i.e. for admission to a series of entertainment. Theargument of the learned counsel for the writ petitioners is that when aticket is issued by them, it is a ticket for admission to series ofentertainment. We do not find any merit in the said argument. Theamusement park is defined under Section 2(a-1) of the Act to mean aplace wherein various types of amusements including games or rides orboth are provided fairly, on a permanent basis, on payment for admission.The payment for admission is defined under Section 2(b) of the Act asthe payment made by a person having admitted to one part of a place ofentertainment and subsequently admitted to another part. Section 2(d)of the Act deals with admission to an entertainment which includesadmission to any place in which the entertainment is held.

17. The argument that when a lumpsum amount is paid as a rightof admission for all rides and games, then it becomes admission to seriesof entertainment, is not tenable. The writ petitioners issue one ticketincluding one or more rides or games situated in one compound. It is notthe case of the writ petitioners that for every ride or game, it is chargingseparately. The admission to entertainment in terms of Section 2(d) ofthe Act includes all rides and games which are provided by the serviceprovider. The series of entertainment as contemplated by Section 3(2)of the Act does not mean that on a single day ticket for one entry, it canbe treated to be a series of entertainments. The series of entertainmentscan be where the facility for a game or ride is provided on multiple daysand a combined ticket is issued for events for each day. It will only thenbe said to be series of entertainment.

18. Once an admission ticket is granted, it is not in terms of Section3(2) of the Act but only in terms of Section 3(1)(b) of the Act. Section3(2) of the Act has no applicability for a visitor to an amusement parkwho does not fall in any of the four categories mentioned in Section 3(2)of the Act. Since, the activities undertaken by the writ petitioners are notfailing part of Section 3(2) of the Act, therefore, they are not entitled torebate of 50% provided to specified category of persons in Section 3(2)of the Act.

19. Section 3(5)(a) of the Act has an overriding effect over Section3(1)(b) and Section 3(2) of the Act. In respect of the first three yearsfrom the date of commencement of the amusement park, there is noissue as no entertainment duty is payable. But, in respect of the subsequent AB

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Atwo years, the rate of duty leviable is under clause (b) of sub-section (1)or, as the case may be, under sub-section (2) of Section 3. Section 3(1)(b)of the Act is applicable to all amusement parks whereas Section 3(2) ofthe Act has a limited applicability only in respect of the specified categoriestherein. All amusement parks for all entertainment are not entitled toconcessional duty in terms of Section 3(2) of the Act. Therefore, theBwrit petitioners cannot claim benefit under Section 3(2) of the Act. Theargument is preposterous as the writ petitioners are firstly claiming thebenefit under Section 3(2) of the Act and then under Section 3(5)(a) ofthe Act. The amusement parks would be entitled to only one benefiteither under Section 3(2) or under Section 3(5)(a) of the Act. SinceCSection 3(2) is not applicable to all amusement parks for all otheractivities, therefore, the entertainment duty in terms of Section 3(5)(a)of the Act alone would be leviable. The duty under Section 3(2) of theAct would be leviable only in respect of specified categories mentionedtherein.

D20. Thus, we are unable to agree with the judgment of the HighCourt that in terms of Section 3(5)(a) of the Act, the entertainment dutyis 50% of the duty payable under Section 3(2) of the Act. Consequently,the order passed by the High Court is set aside. The appeals are allowed.

ENidhi Jain

Appeals allowed.

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