Company liable for entertainment tax under amended state law for aerial ropeway service.

The court dismissed the petition, ruling that the petitioner-company is liable to pay entertainment tax under the amended Himachal Pradesh Entertainment Duty Act, 1968. The court held that the State Government has the legislative competence to impose such a tax on the aerial ropeway service provided by the company, as it falls within the definition of "entertainment" under the Act. The court rejected the petitioner's arguments regarding the absence of a tax provision in the Aerial Ropeway Act and upheld the validity of the tax imposition.

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Issues Involved:
1. Liability of the petitioner-company to pay entertainment tax under the Himachal Pradesh Entertainment Duty Act, 1968, as amended by the H.P. Entertainments Duty (Second Amendment) Act, 1999.
2. Competence of the State Government to issue a notification imposing entertainment tax on the aerial ropeway.

Detailed Analysis:

1. Liability to Pay Entertainment Tax:
The primary question was whether the petitioner-company, operating an aerial ropeway to Naina Deviji Temple, is liable to pay entertainment tax under the Himachal Pradesh Entertainment Duty Act, 1968, as amended by the H.P. Entertainments Duty (Second Amendment) Act, 1999. The petitioner contended that their ropeway service, which transports pilgrims to the temple, does not constitute "entertainment" and should not fall under the purview of the amended Act. They argued that the Himachal Pradesh Ropeway Aerial Act, 1968, does not provide for any duty levy, and thus, the imposition of such a tax under the Entertainment Duty Act is indirect and unauthorized.

The court examined the definition of "entertainment" under the amended Act, which includes "any exhibition, performance, amusement, game, sport, race, an aerial ropeway carrier" to which people are admitted on payment. The court also referred to Entry 62 of List-II of the Seventh Schedule of the Constitution, which allows states to impose taxes on "luxuries, including taxes on entertainments, amusements, betting, and gambling."

The court concluded that the aerial ropeway constitutes "entertainment" as it provides amusement and mental diversion to users, thus falling within the scope of the amended definition. The court rejected the petitioner's argument, stating that the legislative intent was clear in broadening the scope of "entertainment" to include aerial ropeways.

2. Competence of the State Government:
The petitioner challenged the State Government's competence to levy such a tax, arguing that the Himachal Pradesh Aerial Ropeway Act, 1968, does not contain provisions for levying taxes and that the State Legislature lacks the authority under Entry 13 of List-II of the Seventh Schedule to impose such a tax.

The court clarified that Entry 62 of List-II specifically empowers the State to impose taxes on entertainments and amusements. The court emphasized that legislative entries should be liberally interpreted and that the true nature and character of the enactment should be considered. The court found that the Entertainments Duty Act, enacted under Entry 62, was the appropriate legislation for imposing such a tax, and the absence of a tax provision in the Aerial Ropeway Act was inconsequential.

The court also referred to the doctrine of pith and substance, noting that if an enactment substantially falls within the powers conferred by the Constitution, it cannot be held ultra vires merely because it encroaches upon matters assigned to another legislative heading. The court held that the real nature of the levy was on entertainment, and thus, the State Legislature was competent to impose the tax.

Additional Considerations:
The court also addressed the principle of ejusdem generis, which the petitioner invoked to argue that the term "aerial ropeway" should be read in the context of other forms of entertainment listed in the Act. The court dismissed this argument, stating that the principle could not be applied to defeat the statutory purpose of the entertainment tax. The court noted that each term in the definition of "entertainment" carries a distinct meaning, and the broad legislative intent was to include aerial ropeways within the scope of taxable entertainments.

Conclusion:
The court dismissed the petition, holding that the petitioner-company is liable to pay entertainment tax under the amended Himachal Pradesh Entertainment Duty Act, 1968, and that the State Government has the legislative competence to impose such a tax. The court found no merit in the petitioner's arguments and upheld the validity of the tax imposition.

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