State power to tax drive-in theatre admission upheld under entertainment tax entry; vehicle payment treated as part of admission.

The Court held that a levy on payment for admission of a motor vehicle into a drive-in theatre fell within the State's power to tax entertainments under Entry 62 of List II. Applying the true character and pith-and-substance test, it treated the tax as one on admission to entertainment, not on the vehicle as such, because the vehicle was only the means by which the person enjoyed the entertainment. The charging scheme in sections 3 and 6 supported taxation of admission, and the amendment merely identified one form of admission connected with the entertainment. The provision was therefore within legislative competence and valid; the High Court's striking it down was incorrect.

---

---

Issues: Whether sub-clause (v) of clause (i) of section 2 of the Karnataka Entertainments Tax Act, 1958, inserting a payment for admission of a motor vehicle into a drive-in-theatre within the expression "payment for admission", was within the legislative competence of the State Legislature under Entry 62 of List II of the Seventh Schedule to the Constitution.

Analysis: The levy had to be tested by its true character and not by its label. Under Entry 62 of List II, the State can tax entertainments, and under the Act the charging provision fastened the tax on payments for admission to entertainment. A drive-in-theatre admits the person entertained along with the motor vehicle, and the vehicle is only the mode by which the person enjoys the entertainment. The quality of entertainment, in pith and substance, was treated as the subject of the levy, because the comfort and mode of viewing formed part of the entertainment enjoyed by the person admitted. Section 3 and section 6 supported the scheme of taxation on admission, and the impugned amendment merely identified one form of admission connected with the entertainment.

Conclusion: The impugned provision was within the legislative competence of the State Legislature and was valid; the High Court was wrong in striking it down.

---