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2014 (1) TMI 765

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..../or any other rule applicable as per the time stipulated.      (iv) On the payment of taxes, the security furnished will be released.      (v) In case there is any lapse or fault, the respondents can proceed in accordance with the Delhi Entertainment and Betting Tax Act, 1996.      (vi) The security deposit and/or payments made are subject to the final outcome of the present writ petition and the writ petition challenging the constitutional validity.      (vii) The petitioner will file an undertaking in this Court that they shall abide by this order and on the said undertaking being filed and on compliance of other conditions mentioned in letter dated 5th July, 2013, NOC will be issued by the respondents within two days of the receipt of the documents. The undertaking and documents can be submitted to the Standing Counsel for the Government of NCT of Delhi and the time limit of two days will begin from the said date." 2. In terms of the aforesaid interim order dated 23rd July, 2013, the event has taken place and the petitioner has deposited payments with the respondent authorities. 3. In view of t....

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....a place of entertainment is subsequently admitted to another part thereof, for admission to which a payment involving tax or more tax is required;      Explanation 1: Any subscription raised, contribution received or donation collected in connection with an entertainment, where admission is partly or entirely by tickets/ invitation specifying the amount of admission or reduced rate of ticket shall be deemed to be payment for admission;      Explanation 2: Any sponsorship amount paid or value of goods supplied or services rendered or benefits provided to the organizer of an entertainment programme in lieu of advertisement of sponsor's produce/brand name or otherwise shall be deemed to be payment for admission.' 6. We notice that Explanations 1 and 2, which were inserted on 1st October, 2012, have retrospective effect from 1st April, 1998 and the petitioner has challenged the amendment and retrospective effect in W.P.(C) 2563/2013 and some other matters. By order dated 22nd April, 2013 passed in W.P.(C) 2563/2013, it has been directed that no coercive steps will be taken by the respondents. We clarify that this order will not affect ....

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....y the proprietor and paid to the government in the manner prescribed.      (4) If in any entertainment, referred to in sub-section (1), to which admission is generally on payment, any person is admitted free of charge or on a concessional rate, the same amount of tax shall be payable as if such person was admitted on full payment.      (5) Where the admission to a place of entertainment is generally on payment, and if any entertainment is held in lieu of the regular entertainment programme without payment of admission or with payment of admission less than what would have been paid in the normal course, the proprietor shall be liable to pay tax which would have been payable in a normal course at full house capacity or the tax for the programme held in lieu of the regular entertainment programme whichever is higher.      (6) Where the payment for admission to an entertainment, referred to in sub-section (1), is made wholly or partly, the means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and of the amount of the payment for admission, if any....

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....by invitation, at least seven clear days before the date of such entertainment: PROVIDED that, the Commissioner may accept the application at a shorter period if he is satisfied that there were cogent grounds or difficulties for not submitting the application earlier and there is sufficient time for depositing the security, getting the tickets attested, obtaining Form "7" register and for completing other necessary formalities before starting the show. " 12. A reading of the aforesaid Rule elucidates that in cases of ticketed programmes/events, information in Form 5 has to be submitted and in cases of non-ticketed programmes/events, information in application Form 6 has to be submitted. The said information has to be provided at least seven clear days before the date of such event i.e. holidays have to be excluded. The Commissioner, however, has option to entertain the aforesaid applications at a shorter time period, provided the applicant makes an application in Form 7 giving cogent grounds or difficulties for not submitting the application earlier. A perusal of Form 5 indicates that in Form 5 an applicant has to give details of place or places where shows are proposed to be held....

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.... or applicant. It stipulates that Commissioner can order forfeiture of security for reasons to be recorded upon satisfaction that the proprietor has evaded tax or violated the provisions of the Act or Rules made thereunder. An order under sub-section (1) and (2) is appealable within 30 days before the appellate authority in such a manner as may be prescribed and the order of the appellate authority shall be final. It is noticeable that sub-section (2) is only applicable in cases of an order forfeiting the security and not to any other order. 15. Rules 30 and 31 are also relevant and read:-      "30. Manner of depositing security.-The proprietor is required to deposit security under sub-section (1) of section 13 of the Act shall furnish a security in the form of bank draft or pay order or bank guarantee or a fixed deposit receipt, for such amount as may be specified by the Commissioner under rule 31.      31. Amount of security      (1) The amount of security shall be fixed by the Commissioner and shall not be more than the amount of the total tax chargeable for the full house capacity. In case of cinemas and other regu....

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....educational or partly for scientific purposes by a society not conducted or established for profit; or      (c) is provided by a society not conducted for profit and established solely for the purpose of promoting public health or the interests of agriculture, or a manufacturing industry, and consists solely of an exhibition of articles which are of material interest in connection with questions relating to public health or agriculture or are the products of the industry for promoting the interest whereof the society exists, or the materials, machinery appliances or foodstuff used in the production of such products;      it may, subject to such terms and conditions as it may deem fit to impose, grant exemption to such entertainment from payment of tax under this Act: PROVIDED that the government may cancel such exemption if it is satisfied that the exemption was obtained through fraud or misrepresentation, or that the proprietor of such entertainment has failed to comply with any of the terms or conditions imposed or directions issued in this behalf and thereafter the proprietor shall be liable to pay the tax which would have been payable h....

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....y proof as also the particular clause of sub-section (3) of section 14 of the Act under which exemption is sought:      PROVIDED that an application may be admitted after the expiry of the period thereof, if the applicant satisfies the Commissioner or any other office authorised by him that he had sufficient cause for not preferring the application within that period.      (2) The Government may grant exemption on such terms and conditions as it may deem fit to impose in the particular case.      (3) Where exemption is granted a certificate shall be issued to the applicant by the Commissioner or any other officer authorised by him and the same shall, on demand be produced before an inspecting officer. The proprietor shall comply with the condition stated in the certificate.      (4) Where the Government is satisfied, it may grant the exemption after taking such security as it may consider necessary to secure payment of the tax due in case the exemption is cancelled under the proviso to sub-section (3) of section 14 of the Act.      (5) The proprietor of the exempted entertainmen....

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....d from the sale thereof along with the counterfoils of used tickets and all the unused ticket books. He shall also furnish a full and true account of the expenditure incurred along with the vouchers, if so required by the Commissioner, within fifteen days from the date of the entertainment.      (6) The proof of utilisation of the entire gross proceeds for philanthropic, religious or charitable purposes shall be furnished by the proprietor of the entertainment within thirty days from the date of entertainment in such manner as may be required by the Commissioner:      PROVIDED that if the proprietor satisfies the Commissioner that he had sufficient reasons for not submitting the proof of utilisation within the period prescribed, the Commissioner may extend the period of time to extent as he may deem fit." 19. A reading of the aforesaid Rules indicates that even in cases where exemption is applied for and is granted, deposit of security can be asked. 20. The reason why we have reproduced in detail the provisions of the Act and the Rules is to highlight the scheme of the Act and object and purpose behind the provisions. The Act requires and....

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.... "7" has been prepared.      (4) Where it may be necessary to make corrections in the Form "7" no over-writing or correction in the figures shall be made and the corrections shall be made only by encircling the wrong figure and writing the correct figure above it neatly under the signature of manager. No erasion or over-writing in the Form "7" shall be made.      (5) Contravention of sub-rules (2), (3) and (4) shall, unless proved to the contrary, be deemed to be the evasion of tax." 23. Sub-rule (5) is important and stipulates that contravention of sub-rules (2), (3) and (4) unless proved to the contrary shall be deemed to be evasion of tax. The time limit for submission of Form 7 is stipulated in Rule 16. Rule 17 postulates preparation and submission of statement in Form 8, where any programme or synopsis is sold by the proprietor. 24. Rule 25 relates to payment of tax and stipulates as under:-      "25. Payment of tax.-(1) Proprietor of every entertainment required to make the payment of tax in accordance with the provisions of clause (b), (c) or (d) of section 11 of the Act shall deposit the amount of tax into gov....

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....eing heard, assess to the best of its judgment, the amount of the tax due from the proprietor, and may also impose a penalty not exceeding two times of the tax due.      (2) The amount of tax assessed by the assessing authority shall, together with any penalty that may be directed to be paid, be paid by the proprietor within a period of fifteen days from the date of service of notice of demand issued by the assessing authority,      (3) Any person aggrieved by an order under sub-sections (1) and (2) may, within one month from the date of service of such order, prefer an appeal to the Commissioner in such manner as may be prescribed.      (4) An appeal shall lie from an appellate order of the Commissioner passed under sub-section (3) to the appellate authority within one month from the date of service of such order, in such manner as may be prescribed, and the order of the appellate authority shall be final." 27. Clause (d) of sub-section (1) to Section 15 is broad and includes cases where tax had been fraudulently evaded or attempted to be evaded. It covers cases of payment of tax due in any manner whatsoever. Clause (....

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....approval from the Commissioner, but the said section applies to cable television network, video cinema or Direct-to-Home (DTH) services and does not apply to other categories/activities which may be covered by the term "entertainment". Under Section 8(2), proprietor of a cable television network or video cinema or DTH cannot provide entertainment unless he obtains prior permission from the Commissioner in the manner prescribed. Thus, a prior information as mentioned in Section 8(1) is required to be submitted, but in a case covered by Section 8(1) prior approval is not required. What is required is furnishing of information in terms of Section 8(1) in Form 5 or 6. Thereupon, the Commissioner is entitled to pass an order prohibiting the event under Section 8(3) in case the proprietor has not furnished security or the security furnished is inadequate. An order for furnishing security is mandated and required, as noticed above, under Section 13(1) read with Rules 30 and 31. There is no provision in Sections 8(1), 8 (3), 13 (1) or Rule 30 or 31 that "NOC" should be obtained for holding an event. What the relevant sections and rules postulate is that the Commissioner can pass an order d....

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.... Section 13(1) postulates deposit of security in such manner as may be prescribed. We would certainly not like to read Rules 30 and 31 as provisions under which the Commissioner passes an order of assessment or finally determines the question of exigibility or levy of tax. The question of assessment and any determination on the question of levy or exigibility to tax is one of primary importance. It is an aspect, which is normally dealt with under the main enactment and in the present case it is postulated in Section 15. We do not think delegated legislation in form of Rules 30 and 31 can be regarded and treated as the statutory provision empowering Commissioner to determine and decide the question of levy or exigibility of tax. It is difficult to accept that the main enactment i.e. the Act is silent and does not provide for decision on the said core questions and the question of exigibility or levy of tax is left out and not provided, but under the delegated legislation the said adjudicatory provision has been made. 32. Adjudication or assessment is required to be made under Section 15 of the Act, after organiser/applicant has filed return under Rule 14. At the initial stage, the ....