TaxTMI 
TaxTMI 
2012 (6) TMI 763
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....C). Based on direction of the Supreme Court, the petitioners were allowed to amend the WP(C) and on the amended WP(C) the respondents took notice and filed counter-affidavit. 2. We have heard learned Senior counsel Shri Dushyant Dave along with learned counsel Shri Saji Varghese appearing for the petitioners and also learned Advocate-General Shri K.P. Dandapani along with learned Special Government Pleader (Taxes) Shri Sojan James appearing for the respondents. Both sides have also filed written argument notes, which also we have perused. 3. The Act was amended by the Finance Act, 2006 introducing luxury tax on cable TV operators at Rs. 5 per connection to be collected and remitted from every subscriber of cable TV. The amendment made with effect from July 1, 2006 was challenged before this court mainly on the ground that service provided by the cable TV operators does not amount to "luxury" within the meaning of entry 62 of List II of the Seventh Schedule to the Constitution as well as the definition of that term contained in the Act. Another ground raised was that the provisions are discriminatory and violative of article 14 of the Constitution of India inasmuch as direct-tohom....
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....ilms, serials and various other programmes are shown to the consumers, amounts to entertainment, on which levy of tax could be authorised by the State Legislature under entry 62, List II of the Seventh Schedule. The contention raised by the petitioners' counsel is that under section 2(ee) of the Act, luxury is defined as to mean a commodity or service that ministers comfort or pleasure. According to the petitioners, cable TV connection is taken by large number of people in the State and monthly contribution is only around Rs. 200, and therefore going by the meaning of luxury explained by the Supreme Court in the decision in Godfrey Phillips India Ltd. v. State of U.P. reported in [2005] 139 STC 537 (SC); [2005] 4 RC 186; [2005] 2 SCC 515, cable TV connection cannot be termed as luxury. Even though learned counsel for the petitioners relied on several other decisions of the Supreme Court, particularly in Arya Vaidya Pharmacy v. State of Tamil Nadu reported in [1989] 73 STC 346 (SC); [1989] 2 SCC 285 and in Aashirwad Films v. Union of India reported in [2007] 7 VST 714 (SC); [2007] 9 RC 299; [2007] 6 SCC 624, though not directly on the point but which have a bearing on the interp....
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....able TV operators. 5. The next ground raised by the petitioners' counsel is based on article 14 of the Constitution of India inasmuch as while the Government retrospectively exempted all cable TV operators who have less than 7500 connections from tax liability, the cable TV operators who have above 7500 connections are discriminated by making them alone liable to pay luxury tax. This is an additional ground provided to the petitioners by the Government by making amendment to the statute in 2010 when appeals against this court's judgment was pending before the Supreme Court. Learned senior counsel has referred to the statistics about the number of cable TV operators and their subscribers to contend that more than 90 per cent of the operators are now outside the tax limit. We find force in the contention of the petitioners' counsel because the legislation was originally and even now sustained by us by holding that the incidence of tax is intended to be on the subscribers for the entertainment they enjoy and cable TV operator is only a collecting agency by virtue of the charge on them under the Act. Even though learned Advocate-General submitted that classification is rea....
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....se only serves the purpose of collecting arrears from the petitioners and other cable TV operators with connections above 7500 for the period of four to five years from 2006 to 2010. We have already found that retrospective amendment of 2010 exonerating cable TV operators with less than 7500 connections from liability is discriminatory and violative of article 14 of the Constitution of India because the State could not bring to our notice any distinction between those operators with less than 7500 connections and those with 7500 or above connections with the object of levy of luxury tax at the rate of Rs. 5 per month per person enjoying connection. We therefore, declare the levy of luxury tax on cable TV operators with above 7500 connections as discriminatory and violative of article 14 of the Constitution of India, and hence unconstitutional. 7. Even though the petitioners have succeeded on the first additional ground raised and decided above, learned Senior counsel appearing for the petitioners wanted us to consider the next additional ground raised that is the allegation of discrimination and violation of article 14 of the Constitution of India with reference to the direct-to-h....