TaxTMI 
TaxTMI 
TaxTMI 
1988 (9) TMI 348
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....f factors such as, the area or locality in which the games parlour is located, whether the machine in question is a new one or an obsolete one whether the machine is in perfect operational order on all working days or not and also whether the supply of electric power is regualarly available on all working days. A sjop in a busy locality would have takings on higher level than a shop located in a small mofussil town. The working of the machine also depends upon the repair facilities and availability of necessary spare parts etc. some machines, such as, foot ball machines which are purely mechanical, can be operated on a coin of only 25 paise. On the other hand flipper pin ball machines which are electro-mechanical can be operated on a coin of 50 paise. Similarly wall machines which are also electro-mechanical machines can be operated on a coin of 50 paise. As against these, electronic fliper pin ball machines and electronic wall machines can be operated on a payment of Re.1/- at a time. There are some expensive and elaborate video games which can be operated on a payment of only ₹ 2/- at a time. Therefore the amount of revenue yielded would be wholly dependant upon the type of....
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.... of the Supreme Court in AIR 1983 SC 098, M/s. Geeta Enterprises. V. State of Uttar Pradesh. According to the learned counsel video game machines provide entertainment. Taking and earnings from these machines are considerable. Duty is levied in lump sum because that was the only mode available and possible. Even the Division Bench of this Court in Ramesh Waman Toke's case, (supra) has in terms accepted the position that a consolidated sum of money or lump sum could be basis of taxation. In support of her contentions she has placed strong reliance upon the various decisions of the Supreme Court, including . Avindar Singh V. State of Punjab. AIR 1976 SC 670, Income-tax Officer v. N,. taken Roy, Start E OF Karnataka v. M/s. Air Corporation and a decision of this Court in Appeal No. 73 of 1982 arising out of writ petition No. 1159 of 1977 Ahmeddabed Mauncaturing and Calico Printing Co., Ltd v. Municipal Corporation. Greater Bombay decided on 17th July, 1987: (reported in AIR 1088 Bom 384). In fact the tax is levided on the Act of entertainment itself. It is then contended by her that classification is made area-wise which is wholly permissible. In law. In this contest it cannot be ....
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....ectronically or mechanically or electro-mechanically. Section 3(1A) which provides for levy of duty on video game in lump sum reads as under. "3(1A). Notwithstanding anything contained in Cls. (a) and (b) of S. 2 or in any other provisions in relation to the admission on payment contained in this Act , there shall be levied and paid to the State Government entertainment duty in the case of video game at the following lump sum rates, namely; (a) within the limits of the Municipal Corporation of Greater Bombay at the rate of ₹ 500 per machine per month on the total number of machines installed in the video games parlour; within the limits of all the areas, other than the area of the Municipal Corporation of Greater Bombay, referred to in sub-cls. (I). (11), (111), and (1V) of cl. (b) of sub-sec (I), at the rate of ₹ 250/- per machine per month on the total number of machines installed in the video games parlour." Section 3(AA) provides for surcharge on the entertainment duty. Then comes S. 4C which provides for remission or refund in respect of machine in video game parlours remaining inoperative and unproductive and reds as under; "4C. (I) Where any e....
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....g or employment. If there is no show there is no tax". Therefore it is contended that the tax or a duty cannot depend upon the capacity of the machine to entertain. In the present case the tax is levied in lump sum and that too on a notional basis. The tax is payable even in the case where the machine, though could be used, in fact is not used. In substance therefore, it is the contention of the petitioners that the tax as levied in on the machine itself and not on the Act of entertainment. We find it difficult to accept this contention. 6. IN the affidavit filed in reply by the respondents, it is contended that the entertainment duty charged on the video game parlours on lump sum basis is based upon the entertainment received by the patrons of the parlour having regard to the takings from such machines. If the factors as alleged by the petitioners are required to be taken into account for the purpose of charging entertainment duty, it would be impossible to arrive at a proper rate, inasmuch as every video games parlour would trot out different factors and different quantum of expenses, including overheads and repairs etc. the expenses and out goings in respect of each video....
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.... the legislature to classify is of wide range and flexibility so that it can against its taxation in all proper and reasonable ways. The legislature which is competent to levy a tax must inevitably be given full freedom to determine which articles should be taxed, in what manner and at what rate. In tax matters, the State is allowed to pick an choose districts objects persons, methods and even rates for taxation if it does so reasonably (see , State of Karnataka v. Hansa Corpn). It is equally well settled that the micro classification will not vitiate the tax. Only because the tax is levied at a conveniently flat rate having regard to the various circumstances or as an easy means of collection and a variety of other pragmatic variables, to call it invalid, is an absurdity, especially because in fiscal matters large liberality must be extended to the Government having regard to the plurality of criteria which have to go into the fiscal success of the measure. (See , Avinder Singh v. State of Punjab). 8. It may be stated at the outset that the reasonableness of the tax is not challenged nor it is alleged that the tax imposed is exhorbitant, or ex-proprietary or confiscatory. In the ....