Entertainment tax liability for MSOs upheld under the amended Rajasthan entertainment law and notification framework.

A Multi System Operator supplying cable television signals through cable operators was treated as a proprietor under the Rajasthan Entertainment and Advertisement Act, 1957. Reading the amended definitions of entertainment, proprietor and subscriber harmoniously with Section 4AA and the retrospective amendment in the Rajasthan Finance Act, 2011, the Court held that an MSO remains an integral part of the entertainment transmission chain and is connected with the organisation of entertainment, even if not the last person in the chain. The notification dated 08/03/2006 was applied to the assessees, and liability to entertainment tax was upheld in favour of the Revenue.

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Issues: Whether a Multi System Operator providing cable television signals through cable operators falls within the definition of "proprietor" under the Rajasthan Entertainment and Advertisement Act, 1957 and is liable to entertainment tax under the amended charging provisions and the notification dated 08/03/2006.

Analysis: The amended scheme of the Act, including the definition of entertainment, proprietor and subscriber, together with Section 4AA and the retrospective amendment brought by the Rajasthan Finance Act, 2011, was read harmoniously. The Court followed the earlier binding view that an MSO is an integral part of the chain of entertainment transmission and, even if not the last person in the chain, remains connected with the organisation of entertainment. The Court also relied on the Supreme Court authorities holding that MSOs are liable to entertainment tax and found no distinguishing feature in the present matters. The retrospective amendment and the notification were treated as applicable to the assessees.

Conclusion: The issue was answered in favour of the Revenue and against the assessees. The assessees were held liable to entertainment tax as proprietors under the Act, 1957.

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