TaxTMI 
TaxTMI 
2008 (11) TMI 636
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....ded by them by using satellite system that transmits programmes and provides T.V. signals directly to subscriber's premises. The subscriber in the case of DTH can have access to the multiple channel directly at home in KU band using a small antenna and a Set Top Box (STB) which decrypts/decodes the code. STB once purchased by the customer becomes his property and no monthly rent is payable on it. On the other hand, cable operations are done on C band through cables and it serves number of televisions. Each of the petitioners, namely M/s. Dish T.V. India Limited and M/s. Tata Sky Limited have paid rupees ten crores as licence fee and rupees forty crores for bank guarantee. The case of the petitioners is that DTH service is under the control and regulation of the Central Government and a service tax is payable on it which is the subject-matter mentioned at entry No 92C in List I (union list) as such the State Government has no power to levy the entertainment tax on it. It is further pleaded that DTH is a broadcasting service which is transmitted through electro magnetic waves and not through the cable, unlike the one provided by the cable operator. The entertainment tax is payabl....
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....er and taxing powers cannot be mixed up. What is material is that the DTH service providers are also showing channels of entertainment, like the cable operators. Before further discussion, it is pertinent to mention here that the U.P. Entertainments and Betting Tax Act, 1979, was enacted by the Legislature of State of Uttar Pradesh (applicable to the State of Uttarakhand) as the subject-matter relating to entertainment tax was covered under entry 62 of List II (State List) of the Seventh Schedule to the Constitution of India. Initially, the said tax was payable on admissions to entertainments under section 3 read with section 4 of said Act by proprietors of an interior cinema who provided cinematograph exhibitions. When the proprietors of video cinema started exhibition of films, to bring them under the net of entertainment tax, section 4A was inserted in the Act vide U.P. Act No. 12 of 1989 with effect from April 15, 1989. Simultaneously, section 4B was also inserted to bring the video shows in public service vehicles and hotels under the net of the entertainment tax. Thereafter, vide U.P. Act No. 28 of 1995, section 4C was inserted to bring the proprietors of cable television n....
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.... obtaining sponsorships for broadcasting of any programme or collecting the broadcasting charges on behalf of the said agency or organisation, by its branch office or subsidiary or representative in India or any agent appointed in India or by any person who acts on its behalf in any matter; The Telecommunication (Broadcasting and Cable Services) Interconnection Regulation 2004, provides definition of expression "direct to home operator" in regulation 2(k), as under: "direct to home operator" means an operator licensed by the central Government to distribute multi channel TV programmes in KU band by using a satellite system directly to subscriber's premises without passing through intermediary such as cable operator or any other distributor of TV channel; After quoting the above definitions, now, I come to section 4C of the U.P.Entertainments and Betting Tax Act, 1979, which empowers the State Government to levy tax on cable service: "4C. Tax on cable service.-(i) The proprietor of a cable television network providing cable service shall be liable to pay entertainment tax at such rate not exceeding two hundred rupees for every subscriber for every month, as the State Governme....
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....ss such amendment is brought by the Legislature to bring the broadcasting agencies into the net of the entertainment tax, said tax cannot be levied on the broadcasting agencies for DTH service provided by them to its subscribers. On behalf of the respondents attention of this court is drawn to the judgment and order dated May 26, 1995, passed by the Division Bench of Allahabad High Court in Writ Petition No. 1353 of 1993 (Universal Communication System v. State of U.P.,) wherein the Allahabad High Court has taken the view that where on account of progress being made by the society and development in science and technology, the courts are confronted with new problems which had not been visualised at the time when the laws were enacted by Legislature. In this connection, Allahabad High Court quoting the view from Senior Electric Inspector v. Laxminarain Chopra AIR 1962 SC 159, has observed that in a modern progressive society it would be unreasonable to confine the intention of Legislature to the meaning attributable to the word used at the time the law was made, for a modern Legislature making laws to govern the society which is fast moving must be presumed to be aware of an enlarg....
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....LP is more binding in nature as to the one expressed by the Division Bench of the Allahabad High Court. On this point, (relating to binding nature of such orders) the cases of State of Manipur v. Thingujam Brojen Meetei [1996] 9 SCC 29, Union of India v. M.C. Desai [1998] 11 SCC 399, referred on behalf of the respondents get clarified by the view taken by the apex court in a subsequent judgment of Kunhayammed v. State of Kerala [2000] 119 STC 505; [2000] 6 SCC 359. Relying on the principle of law laid down by the apex court in A.V. Fernandez v. State of Kerala [1957] 8 STC 561; AIR 1957 SC 657, Central India Spinning and Weaving and Manufacturing Co. Ltd. v. Municipal Committee, Wardha AIR 1958 SC 341 and Mathuram Agrawal v. State of Madhya Pradesh [1999] 8 SCC 667, it is argued on behalf of the petitioners that in the matter of interpretation of taxing statute, the liability to pay tax must be unambiguous and Legislature must have in clear words specifically expressed its intention. And, by inference no other person can be said to be liable to pay tax in respect of which there is no liability imposed by the statute. Considering the principle of law laid down in the matter by the....
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.... competence of Legislature on entertainment tax (for brevity this court does not think it necessary to quote the paragraphs of the judgment). In para 31 of said judgment referring to Hoechst Pharmaceuticals Ltd. v. State of Bihar [1984]8 55 STC 1 (SC); [1983] 4 SCC 45, it is observed that there is no overlapping in the taxing power and Constitution provides independent sources of taxation to the union and the States. It is further observed in said case that taxation is considered to be distinct matter for the purposes of legislative competence. It is further held that the power of tax cannot be deduced from a general legislative entry as an ancillary power. In State of West Bengal v. Kesoram Industries Ltd. [2004] 266 ITR 721 (SC); [2004] 10 SCC 201 referring to the Hoechst Pharmaceuticals [1984] 55 STC 1 (SC); [1983]8 4 SCC 45 it is further mentioned that doctrine of occupied field only applies when there is a clash between the Union and State List within an area common to both. In such case doctrine of pith and substance is to be applied and if the impugned legislation substantially falls within the power expressly conferred upon the Legislature which enacted it, an incidental en....