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of <h1>Court deems costume rentals at water park not subject to entertainment tax under UP Tax Act</h1> <h3>Anandi Water Park Resorts And Club Pvt. Ltd. Thru. Dir. Amit Versus State Of Up Thru Addl Chief Secy Commercial And Entertainment</h3> Anandi Water Park Resorts And Club Pvt. Ltd. Thru. Dir. Amit Versus State Of Up Thru Addl Chief Secy Commercial And Entertainment - TMI Issues:Challenge to imposition of entertainment tax and penalty under The Uttar Pradesh Entertainment and Betting Tax Act, 1979 based on a survey conducted at a water park premises.Analysis:1. The petitioner challenged the imposition of entertainment tax and penalty based on orders dated 31.08.2010, 21.01.2016, and 30.03.2017. The petitioner contended that the tax levied on renting costumes at the water park was exempted previously. The issue arose from a survey conducted at the premises, alleging charging for costumes without proper authority.2. The petitioner argued that the foundation for charging entertainment tax on costumes was illegal as it did not fall under the definition of 'payment for admission' as per Section 2(l)(iii) of the 1979 Act. The petitioner claimed the costumes were provided by a separate contractor, and the charging was voluntary, not part of admission fees. The assessment period was also questioned for its arbitrary nature.3. The Counsel for the petitioner contended that the assessment lacked proper authority of law and violated the principles of natural justice by not providing an opportunity for a hearing. The assessment was solely based on one survey, which was inadequate for determining the tax due. The petitioner's arguments were supported by the absence of a denial in the counter affidavit.4. The Court analyzed Section 2(l)(iii) of the 1979 Act, defining 'payment for admission' as including the use of instruments or contrivances enhancing entertainment. The Court found that costumes did not qualify as instruments or contrivances under this definition, as they did not enhance entertainment or enjoyment at the water park.5. The Court referred to dictionary definitions of 'contrivance' and 'instrument' to support its interpretation. Since costumes did not meet the criteria of these definitions, the Court concluded that the tax levy on costumes was beyond the authority of law and violated the Constitution of India.6. The Court emphasized that taxes must be levied explicitly and not by implication. Since the Act did not specifically include renting costumes for tax purposes, the demand for tax and penalty was deemed unauthorized. Consequently, the Court allowed the writ petition, setting aside the impugned orders and directing the refund of the deposited amount to the petitioner within three months.
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