2017 (12) TMI 1273 - HC - VAT and Sales Tax

Court modifies Assessment Order, directs recalculation of tax, penalty, interest excluding disputed amount.

The High Court partially allowed the writ petition without costs, modifying the Assessment Order and appellate decisions concerning the disputed ... Levy of entertainment tax - folk musical festival, namely, Amarrass Desert Music Festival - sponsorship money - Held that: - There is no evidence to show that the event was sponsored by any organization or corporate house. No details of sponsorship stand noticed or adverted to in the assessment order and the appellate orders. The FIR and the report of the raiding team does not refer to sponsorship or any evidence. The orders passed by the Entertainment Tax Officer or the appellate authorities proceed on surmises and conjecture that sponsorship money of ₹ 10,00,000/- must have been received. In the absence of any such evidence or material, we do not think that the Entertainment Tax Officer could have made any assumption and arrived at a finding - we partly modify the assessment order and the appellate orders to the extent that the petitioner had been asked to pay entertainment tax, penalty and interest on sponsorship fee of ₹ 10,00,000/-. The respondents would accordingly recompute of entertainment tax, penalty and interest - we have not interfered with the quantum/percentage of penalty which has been imposed. Appeal allowed in part. Issues:Challenge to Assessment Order under Delhi Entertainment and Betting Tax Act, 1996.Detailed Analysis:1. Assessment Order and Appellate Orders:The petitioner challenged the Assessment Order and subsequent appellate orders dated 11th June, 2013 and 11th July, 2017. The Assessment Order directed payment of entertainment tax, interest, and penalty. The Deputy Commissioner and Financial Commissioner affirmed the original order.2. Contentions Raised:The petitioner initially raised multiple contentions but later focused on disputing the sponsorship addition of Rs. 10,00,000, subject to 15% entertainment tax amounting to Rs. 1,15,000.3. Exemption Application and No Objection Certificate:The petitioner applied for exemption from entertainment tax for a folk musical festival. They received a 'No Objection Certificate' subject to conditions, including a ceiling on admission fee and sponsorship/donation limit.4. Raid and Violations:A raid revealed violations, including charging for entry and liquor vouchers. An FIR was registered under the Excise Act due to these violations.5. Assessment and Sponsorship Issue:The Assessment Order concluded that the petitioner received sponsorship of Rs. 10,00,000, imposing entertainment tax, interest, and penalty. The petitioner disputed this, stating they had not received any sponsorship money.6. Judicial Review and Modification:The High Court found the Assessment Officer's conclusion on sponsorship lacked evidence and was based on assumptions. The court modified the order, directing a recalculation of tax, penalty, and interest excluding the disputed sponsorship amount.7. Payment and Interest:The petitioner had deposited Rs. 3,00,000, which would be adjusted. The remaining amount due would be communicated within three weeks. Interest would be charged at 18% till the date of the order and increase to 2% per month in case of default.8. Final Decision:The writ petition was partly allowed without costs, modifying the Assessment Order and appellate decisions regarding the disputed sponsorship amount.This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive overview of the Assessment Order challenge and subsequent modifications by the High Court.