AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 228
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....Rajkot, which has been leased out to the petitioner for the purpose of establishing and running the aforesaid amusement park. It is the case of the petitioner that in view of an agreement by and between the petitioner and the Municipal Corporation of Rajkot, the rates in respect of various rides provided in the said amusement park are kept at the minimum to the extent possible. 3. The said amusement park became functional for its operational usage with effect from January 17, 1991. Subsequent thereto, the Government of Gujarat, through its Information, Broadcasting and Tourism Department, in exercise of the powers conferred upon it under section 29(1) of the Gujarat Entertainments Tax Act, 1977 (hereinafter referred to as, "the Act"), promulgated a notification dated December 24, 1991 by virtue of which the amusement parks came to be totally exempted from the scope and purview of the said Act for a period of six years from the date of commencement of the functional usage of such amusement parks, provided such amusement parks were established subsequent to January 1, 1991. In view of the said notification, the petitioner was exempted from the payment of entertainment tax and accord....
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....ion 3 of the Act. Attention was invited to item No. 3 of the Schedule, to point out that under the said notification, any entertainment other than something shown in theatres licensed under the Bombay Cinema (Regulation) Act, 1953 where entertainment is by a machine operated by electricity, petrol or diesel or otherwise, and admission of which is conditional on payment of a sum not exceeding Rs. 6 per ticket was fully exempt from payment of entertainment tax. It was submitted that in the case of the petitioner, the petitioner runs an amusement park which comprises of different rides. Each ride is a separate entertainment operated by electricity, petrol or diesel or otherwise and the admission to each ride is on payment of a sum less than Rs. 6 per ticket. Therefore, while subjecting the petitioner to entertainment tax in respect of various rides provided in the amusement park, each and every ride is to be taken into consideration separately without clubbing the same, as is sought to be done in the present case. According to the learned counsel, purchase of a ticket for a particular ride is nothing but a ticket for an entry in such a ride and accordingly, usage of each and every rid....
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....titioner is liable to pay entertainment tax under section 3 of the Act. It was contended that item No.3 of the notification envisages payment of a sum not exceeding Rs. 6 per ticket. In the amusement park in relation to each ride, a separate ticket is issued and in none of the tickets, does the price exceed Rs. 6 per ticket. It was further submitted that separate tickets are required to be purchased by the concerned visitor after entering the amusement park for the purpose of availing of the various rides made available there and as such, the methodology of computing the total income derived by the petitioner from the said amusement park, inclusive of entry tickets and, thereupon, to divide the same by total number of visitors and, thereupon, to subject the figure deduced therefrom for the purpose of calculating the amount of entertainment tax per ticket, is totally erroneous. It was urged that while assessing the petitioner for the purpose of entertainment tax, the methodology followed by respondent No. 4 and approved by respondent No. 2 is that irrespective of the fact as to whether the concerned visitor has availed of the rides provided in the amusement park or not, the petition....
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....s purchasing the tickets in respect of all the rides. It was submitted that even a bumper ticket is comprised of individual tickets for individual rides and as such, the prescribed officer was not justified in calculating the average price of the bumper ticket on the basis of number of entry tickets and the income derived from sale thereof. It was submitted that respondent No. 3 has held that it would be justifiable to employ the concept of clubbing while assessing the liability of the petitioner in respect of the entertainment tax, whereas the bumper tickets are nothing but a form of special concession to the concerned visitor in the vicinity of 25 per cent per ticket per ride, provided the concerned visitor is purchasing tickets in respect of all the rides. It was argued that even if the concerned visitor purchases the ticket in one lot in respect of all the rides, the concept of each ride being separate and distinct from the remaining rides and, thereupon, constituting a separate and distinct source of entertainment for the concerned visitor, is not at all lost. It is only for the purpose of persuading and encouraging the concerned visitor to go for all the rides in the said amu....
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....ation v. State of Gujarat [1985] 2 GLR 806 and in Ramanlal B. Jariwala v. District Magistrate, Surat [1992] 1 GLR 46. 5.7 Lastly it was contended that the impugned order passed by the revisional authority as well as the order passed by the appellate authority are both non-speaking orders inasmuch as, no reasons have been assigned by the concerned authority as to why the contentions raised by the petitioner are not acceptable. It was submitted that the contentions raised in the present petition had also been raised before the revisional authority who, however, has not thought it fit to deal with the same. Under the circumstances, the impugned order is required to be set aside also on the ground of being a non-reasoned and non-speaking order. 5.8 In conclusion, it was submitted that the impugned order passed by the revisional authority being a non-speaking order as well as being contrary to the provisions of the notification issued by the Government, the petition deserves to be allowed by quashing and setting aside the said order and holding that the petitioner is not liable to pay entertainment tax for the period in question on the entertainment provided in its amusement park. 6.....
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....is in accordance with the provisions of law. 6.2 Insofar as the sale of bumper tickets is concerned, the learned Assistant Government Pleader invited the attention of the court to the provisions of section 3 of the Act, which makes provision for levy of tax on payment for admission to entertainment, and more particularly, to sub-section (3) thereof to submit that the same makes provision for payment of amount by way of lump sum. Thus, the sale of bumper tickets would be governed by sub-section (3) of section 3 of the Act and the petitioner would be liable to pay entertainment tax as prescribed under the said provision. It was further contended that the rate of tickets was to be computed by clubbing entry fees of Rs. 2 as well as the fee charged for each of the rides and as such, the manner in which the prescribed officer has computed the rate of the entry ticket is in consonance with the relevant provisions of the Act and the notifications, and does not warrant interference by this court. 6.3 The learned Assistant Government Pleader further invited the attention of the court to the additional affidavit made by the prescribed officer wherein it has been averred as under: "I say a....
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....ioner is the sole owner of the various rides in the amusement park and if the entry fee as well as the total of the different rides is taken into consideration, the rate of each ticket exceeds the exemption limit and as such, the respondents are justified in holding that the petitioner is liable to pay entertainment tax on the entertainment provided by it. 7. In the light of the facts and contentions noted hereinabove, the main issues that arise for consideration are: firstly, as to whether in the light of the provisions of section 3A of the Act, the entertainment provided by the petitioner in its amusement park is exempt from the provisions of the Act; secondly, as to whether each ride provided by the petitioner in its amusement park is a separate amusement or as to whether all the rides provided by the petitioner are required to be clubbed together; and thirdly, as to whether the bumper tickets issued by the petitioner are in the nature of a single entertainment or separate entertainments clubbed together. 8. A perusal of the order passed by the prescribed officer shows that he has mainly placed reliance upon the communication dated January 29, 1997 of the office of the Commiss....
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.... of the parties and without assigning any reasons whatsoever, has dismissed the appeal. Thus, the learned counsel for the petitioner is justified in contending that the orders passed by the appellate authority as well as by the revisional authority are non-speaking orders and have been passed without application of mind and as such are required to be quashed and set aside on this ground alone. 11. However, the petition raises various questions of law as noted hereinabove, hence, it is necessary to delve into the merits of the case. 12. From the affidavit in-reply filed on behalf of the respondents as well as the stand taken by the respondents during the course of arguments, it is apparent that the case of the respondents is that as per the instructions issued by the Commissioner of Entertainment Tax, Gandhinagar vide his letter dated September 15, 1990, if different items are owned by different owners and if the charge is not more than the prescribed limit of Rs. 6, no tax shall be charged. But if the different items are owned by one owner and the charges are more than the prescribed limit, in that case, the should be charged. It is the case of the respondents that the petitioner....
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.... for any privilege, right, facility or thing combined with the right of admission to any entertainment or involving such right of admission without further payment or at a reduced rate, the tax shall be levied on the amount of the lump sum but where the prescribed officer is of opinion that the payment of lump sum or any payment for a ticket, represents payment for other privileges, rights or purposes besides the admission to an entertainment, the tax shall be levied on such an amount as appears to the prescribed officer to represent the right of admission to the entertainment in respect of which the tax is payable. (4) Save as otherwise provided in this Act, every ticket, pass or other document issued for admission to an entertainment shall state therein the amount of payment for admission to such entertainment, and the amount of tax payable under section 3 or 4 on such payment for admission." 5. Section 7 of the Act bears the marginal note "Admission to entertainment" and reads thus: "7. (1) Save as otherwise provided by this Act, where a tax under section 3 or 4 or section 6 or section 6A is leviable, in respect of the admission of a person to an entertainment, no person othe....
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....the circumstances, by entering the amusement park simpliciter without enjoying of any of the rides, the concerned visitor does not get any entertainment. The amusement park per se is not a place of entertainment, like a cinema hall or a theatre where any person who enters the cinema hall or theatre gets to watch the film or the play. In a case like the present one, a person who pays for an entry ticket thereby is not entitled to avail of the benefit of any ride, he only avails of the facilities provided at the amusement park. For getting entertainment, viz., rides, the visitor is required to purchase a separate ticket. Moreover for every ride, be it of the same kind or a different one, a different ticket is required to be purchased. Thus a ticket for a ride is more or less akin to a cinema ticket on the basis of which one can watch one film only. If one wants to watch another film or the same film again, a separate ticket would be required to be purchased. Purchase of a ticket for mere entry into an amusement park, like in the present case, without getting any kind entertainment on the basis thereof, not being a payment for admission to an entertainment would not be exigible to ent....
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....purpose of entertainment would become ultra vires the powers of the State Legislature, as seen from entry 62 of Part II of the Seventh Schedule to the Constitution. The said entry provides that State Legislature is competent to levy taxes on luxuries, including taxes on entertainments, amusements, betting and gambling. Consequent, tax must be on payment received for permitting benefit of entertainment. It must, therefore, be found out as to whether payment of ten paise per passenger for use of lift charged by the petitioner for going to the first floor foyer is payment for admission to entertainment. On first principle, it is difficult to comprehend as to what entertainment a person would get by travelling in the lift for approaching given destination. But even that apart, when we turn to the relevant definitions in the Act, we find that admission to entertainment is defined by section 2(a) to include admission to any place in which the entertainment is held. 'Entertainment' is defined by section 2(e) to include any exhibition, performance, amusement, game or sport to which persons are admitted for payment. 'Payment for admission' is defined by section 2(g) to include various payme....
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....inema theatre especially double decker cinema, lift facility may be offered for convenience of cinegoers to go to upper floor where cinema auditoriums are situated, on upper floors, there may be book stalls, restaurants, ice-cream parlours and without entering the auditorium, person may like to utilise any of these other services or facilities. He may go to purchase books on the first floor or second floor. If he chooses to use the lift, he has to pay for it. But that may have nothing to do with the picture show which may be exhibited in the auditorium. He may go only for snacks on the first floor or second floor or to have only a bowl of ice-cream there. Similarly, in many theatres, parking facilities are provided wherein cinegoers can conveniently park their scooters and/or cars on payment. Such payment cannot be said to be payment made for admission to entertainment unless such payments are made compulsory for every cinegoer before he can enter the auditorium. In the absence of such situation therefore, it cannot be said that mere collecting of ten paise for getting extra facility of lift if required by any cinegoer would by itself bring this levy within the fold of the Act. The....
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....bing or no averaging of the prices for the purpose of finding the liability of entertainment tax of each of the owners. Thus, it is apparent that the chargeable event is the entertainment, viz., the ride. 11. As noted hereinabove, on a plain reading of section 3 of the Act, the chargeable event is for admission to an entertainment. Thus, if in the case of individual owners of rides, each ride is considered as separate entertainment, merely because the owner of all the rides is the same, the charging event would not change. Under the circumstances, the question of clubbing the ticket fees of different rides provided by the same owner does not arise. It is the case of the respondents that the petitioner is running different rides and is charging separately for each ride. The respondents are, therefore, not justified in computing the entertainment tax by considering the number of entry tickets of the amusement park and the total income for the period in question and dividing the same by the number of entry tickets to arrive at an average which is considered to be the amount payable for admission to the entertainment. In the facts of the case, the amount payable for admission to enter....
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....ent the right to entertainment shows nor can it be said that the entire guest charge of Rs. 21 per guest on any day represents the payment for admission. The petitioner club submits that it is not possible to work out such an amount representing the payment for admission to the entertainment show, having regard to the fact that the annual subscription and guest charges are related to all rights, privileges and activities of the club. At present it is not possible to deal with this in view of the fact that the State Government has not undertaken any exercise to determine as to what amount represents the right of admission to the entertainment and without having done that the State Government authorities have no basis and cause to make a demand and to ask the petitioner-club to pay up the entertainment duty. Therefore, the letter dated November 30, 1972 and May 30, 1973 of the, Home Department are illegal and without any basis; so also the subsequent letters rejecting the representation of the petitioner and the same are therefore quashed and set aside." 13. In Gujarat Video Association v. State of Gujarat [1985] 2 GLR 806, this court held thus: "Similar is the position in the case....
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.... basis of all the seats and accommodation available in every show of every day of the month being occupied. Similar was the position in the case of video exhibition where lump sum duty was to be paid on the basis that the owner of a video exhibition conducted all the shows which he was permitted to conduct and that for those shows all the seats in the place of entertainment were occupied. Looking to the provisions of clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, the Division Bench held that the said provisions did not take into account entertainment that was actually offered by the owner of the touring cinema or the owner of the video exhibition and the Act purported to levy tax on notional entertainment and, therefore, exercising of that taxing power was held to be ultra vires the Constitution. Here, the consolidated amount cannot be quarrelled with because the Supreme Court has made position clear." 14. Both the aforesaid decisions reinforce the view taken by this court that the taxing event is the entertainment, and if there is no entertainment at all, the question of levying entertainment tax does not arise at all. Accordingly, considering the natu....
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....cket, the same would stand on a different footing, inasmuch as the petitioner itself has clubbed the tickets for different rides together into one bumper ticket. If a visitor desires to avail of a single ride, he would have to pay the full price for such ride and enjoy the same. It is only if he purchases a bumper ticket that he can avail of concessional rates in respect of each ride. Thus, here the admission rate is in respect of all the rides clubbed together and not for each individual ride, though for administrative purposes the bumper ticket may consist of several tickets for each separate ride. Under the circumstances, insofar as bumper tickets are concerned, there is no infirmity in the stand adopted by the respondents that the same has to be considered as one single ticket and as such the admission rate would be considered on the basis of the price of the bumper ticket. However, the admission rate would not include the entry fee which forms part of the price of the bumper ticket as the entry fee is not charged in respect of any entertainment. 16. Another contention raised on behalf of the petitioner is that in view of the Third Schedule framed under section 3A of the Act, ....