Entertainment tax liability cannot arise without any entertainment; assessment, damages and penalty under section 12 were quashed.

Section 12 of the U.P. Entertainments and Betting Tax Act, 1979 could not be applied where no entertainment was held at all, because the provision presupposes a taxable entertainment and default in prescribed obligations connected with it. In the absence of any such event, there was no basis for assessment of entertainment tax, no consequential penalty, and no independent statutory foundation for recovery of damages for loss of entertainment tax. The impugned order was therefore unsustainable and was quashed in favour of the assessee.

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Issues: Whether, in the absence of any entertainment being held, assessment of entertainment tax, damages for loss of entertainment tax, and penalty could be imposed under section 12 of the U.P. Entertainments and Betting Tax Act, 1979.

Analysis: Section 12 contemplates assessment and penalty only where the proprietor has failed in the prescribed obligations in relation to an entertainment and there is a basis for assessment of tax. The provision was held inapplicable where no entertainment was held at all, because in such a situation there could be neither assessment of tax nor consequential penalty. The respondents could not point to any independent provision authorising recovery of damages for loss of entertainment tax in these circumstances.

Conclusion: No assessment, damages, or penalty could be imposed under section 12 when no entertainment was held; the impugned order was therefore unsustainable and was quashed in favour of the assessee.

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