TaxTMI 
TaxTMI 
2015 (9) TMI 779
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....wer of the State of Gujarat. It is also further prayed to declare that the Gujarat Entertainment Tax (Amendment) Act, 2009 is ultra vires the Constitution of India and beyond the legislative competence of the State of Gujarat and consequently to quash and set aside the same. It is also further prayed for appropriate writ to declare that the Gujarat Entertainment Tax (Exhibition by means of Direct-To-Home (DTH) Broadcasting Service) Rules, 2010, [hereinafter referred to as "Rules, 2010"], particularly Rules 3, 4, 5, 6, 7, 11, 12, 13, 14 and 16 are ultra vires the Constitution of India and are arbitrary, capricious and violative of Articles 14, 19(1)(g) and 21 of the Constitution of India and to quash and set aside the same and restrain the respondents from recovering any amount pursuant to the Rules 6, 7 and 14 thereto. It is further prayed to issue appropriate writ directing the respondents not to levy tax, fees or duty under the Act and the Rules on the DTH Broadcasting Services provided by the respective petitioners in the State of Gujarat and to quash and set aside the impugned notices received by the respondent No.2 for recovery of entertainment tax. [3.0] For the sake of con....
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....titioner has paid Rs. 10 Crores to the Ministry of Information and Broadcasting as an initial nonrefundable entry fee and furnished the Bank Guarantee for an amount of Rs. 40 Crores valid for the duration of the license. That the terms of the license further provided that the petitioner shall pay an annual fee equivalent to 10% of its gross revenue as reflected in the audited accounts of the Company. That the petitioner is also required to pay in addition to the license fee, royalty for spectrum use as prescribed by the Wireless Planning and Coordination Authority (WPC) under the Department of Telecommunications. That the petitioner has been also granted permission on nonexclusive basis for a period of 10 years to establish, maintain and operate uplinking hub (Teleport). That the license granted to the petitioner is for the whole of India and the petitioners are not required to get any permission / any other license from any of the authority for providing DTH Broadcasting services. It is the case on behalf of the petitioner that even otherwise, broadcasting is a subject matter which falls exclusively within the domain of the legislative competence of Union and States have absolutel....
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....h the notice at Annexure-C to comply with the provisions of entertainment tax and threatening action unless the notice is complied with. Hence, the respective petitioners have preferred the present Special Civil Applications under Article 226 of the Constitution of India challenging the levy of entertainment tax on the DTH Broadcasting services by the Act, by the State of Gujarat alleging inter alia that the same is ultra vires the Constitution of India inasmuch as it seeks to be imposed as a tax on a subject matter which is covered by Entry 31 and 92C of the List I of Schedule VII of the Constitution, on the ground that the power to impose tax on the subject matter covered by the said Entries is with the Central Government and not the State Government and also on the other grounds which shall be considered hereinafter. [4.0] Shri S.N. Soparkar, learned Senior Advocate has appeared with Shri Amar Bhatt, learned advocate appearing on behalf of the petitioner of Special Civil Application No.3430/2010 - Tata Sky Limited. Shri Sandip Laddha, learned Counsel has appeared with Shri Chetan K. Pandya, learned advocate appearing on behalf of the petitioner of Special Civil Application No.3....
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....etc. and the guidelines, policies and notifications issued by the Government of India and such other Acts and the Rules made thereunder are applicable to DTH Broadcasting Services which itself shows that the DTH Broadcasting Services falls under the domain of Union. It is further submitted that in the year 1994, the service tax was introduced under Chapter V of the Finance Act, 1994 with reference to its residuary power under Entry 97 List I [Union List] of the Schedule VII to the Constitution of India and that the DTH Broadcasting Services were included in the service tax net with effect from 16.07.2001 by the Finance Act, 2001 under section 65(105)(zk). It is submitted that the State therefore cannot impose entertainment tax on DTH services, the field having been occupied by the Entry 97 read with Entry 31 of List I of the Constitution of India. It is submitted that therefore the method of entertainment tax would amount to double taxation which is not permissible in law. [5.4] It is further submitted that the State Government has no legislative competence under Entry 62, List II read with Article 246(3) of the Constitution of India, to impose entertainment tax on entertainment t....
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....ertainment in public places. [5.10] It is further submitted that Parliament has refrained from imposing service tax on entertainment in public places recognizing that these fall within Entry 62, List II, but has consistently impose service tax on socalled entertainment in private places, because such activities are not part of Entry 62. [5.11] It is further submitted that the Finance Act, 1994, as amended by the Finance Act, 2002 demonstrates the aforesaid. It is submitted that section 66B of the said Act provides that service tax shall be levied on the value of all services except those specified in the "negative list". It is submitted that the negative list, which is defined in section 66D, inter alia contains "admission to entertainment events or access to amusement facilities". It is submitted that the definition of "entertainment events" in section 66(24) refers to the exhibition of cinematographic films, circus, concerts etc. all of which are events in public places. It is further submitted that the budget speech of the Finance Minister for the year 2012-13 states that the negative list has been carefully drawn up keeping in view the "federal nature of our polity". It is su....
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....oviding services of the same broadcasters, competing in the same market and catering to the same set of consumers, is expressly discriminatory and violative of Article 14. It is submitted that the Madras High Court in its judgment dated 19.10.2012 in Writ Petition Nos.25721/2011 in case of Tata Sky Ltd. vs. State of Tamil Nadu and other allied petitions which was inter alia filed by the very petitioner, challenging the provisions of Tamil Nadu Entertainment Tax Act, 1939 as amended by the Tamil Nadu Tax Act, 2011 discriminated and levied higher percentage of tax for DTH has held the said provisions of law ultra vires and unconstitutional to Articles 14, 19(1)(g) of the Constitution of India. It is submitted that Madras High Court in the aforesaid decision has held that the levy of entertainment tax on DTH Broadcasting services suffers from arbitrariness in classifying DTH as a separate class from Section 4E / Cable TV for adopting a different rate of tax. [5.14] It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that even as held by the Hon'ble Supreme Court in the case of Federation of Hotel & Restaurant Association of India v. Uni....
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....r submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that Rule 12 of the Rules, 2010 indirectly empowers invasion by the State and its officers without any safeguards as to the probable or reasonable cause or basis, violates right to privacy of the petitioner and its customers and therefore, violative of Article 21 of the Constitution of India. In support of his above submissions, he has relied upon the decision of the Hon'ble Supreme Court in the case of District Registrar & Collector, Hyderabad vs. Canara Bank and Ors. reported in (2005)1 SCC 496. [6.3] It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that Rule 13 of the Rules, 2010 requires that a receipt shall be issued for every payment made towards installation and other charges. However, the DTH operators operates on a prepaid model and therefore, there is no issuance of receipts to the subscribers and the payments are also made by the customers online etc. It is submitted that therefore, the aforesaid Rule has been framed without proper application of mind and without understanding the business environment of the DTH operators. It is submitte....
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.... service provider. It is submitted that when a new connection is given to the customer, such subscriber gives the petitioner the applicable charges for installation and activation. It is submitted that after the installation and activation the subscriber is required to pay a monthly subscription charges based on his choice of channels. It is submitted that a subscriber may purchase a set top box from a retailer, which becomes the property of the subscriber. It is submitted that the service provided thereafter to the customer is prepaid service wherein a subscriber is required to purchase a recharge voucher to top up his connection balance. It is submitted that therefore the aforesaid cannot be said to be providing entertainment and therefore, the levy of entertainment tax on the DTH broadcasting services is absolutely illegal and arbitrary. [7.2] It is further submitted that section 6E of the Entertainment Tax Act, 2009, which imposes entertainment tax on DTH Broadcasting services can be upheld as a valid piece of legislation only if the incidence of tax is on entertainment. It is submitted that if the incidence of the entertainment tax is not on entertainment but on service, the ....
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..... [7.4] It is further submitted that assuming for the sake argument and without admitting it that the transaction of DTH broadcasting is not an indivisible one but a composite one, the service element of a transaction cannot be taxed by the State Legislature. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited v. Union of India reported in (2006) 3 SCC 1 (Paras 87 and 88). It is submitted that applying the law laid down by the Hon'ble Supreme Court in the case of BSNL (Supra), if the transaction of DTH broadcasting service is recognized to have two separate elements called service and entertainment, no service tax can be levied by including value of entertainment in service and conversely, no entertainment tax can be levied by including the cost of service in the value of entertainment. It is submitted that in the present case section 6E hits the service itself by charging entertainment tax on the service attribute, viz. TV set of the subscribers which receives DTH broadcasting service. It is submitted that aforesaid makes section 6E vulnerable and incompatible with BSNL. [7.....
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...., so far as the Entry 97 of List I is concerned, the same is a residual entry, which empowers the Parliament to enact law in respect of any other matter not enumerated in List II or List III including any tax not mentioned in any of those lists. It is submitted that in the present case, the Act is directly relatable to Entry 62 of List II, falling within the legislative competence of the State Legislature and hence, on the said subject of Entry 62 of List II, the State Legislature has rightly enacted the Act and hence, residual Entry 97 of List I has no applicability in the present case. It is submitted that as such the petitioners have rightly not invoked the applicability of the said Entry 97 of List I in their pleadings. [9.3] It is further submitted that similarly the applicability of Entry 31 of List I to the subject of Entry 31 of List I to the subject of "entertainment" is only with reference to the power of "regulation and control" of the Central Government by virtue of the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933. However, the power of "regulation and control" is separate and distinct from the power of taxation and so are the two fields for the ....
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....igh Court of Punjab & Haryana in the case of Tata Sky Ltd. v. State of Punjab reported in (2011)37 VST (PH); High Court of Delhi in the case of Bharti Telemedia Ltd. v. Government of NCT of Delhi & Anr. reported in (2011)44 VST 262 (Delhi); High Court of Orissa in its judgment dated 24.04.2012 in Writ Petition (C) No.8966/2011 rendered in the case of M/s. Tata Sky Ltd. v. State of Orissa and the Allahabad High Court vide judgment and order dated 28.07.2012 in Writ Tax No.1819/2009 and other cognate matters in the case of Sun Direct TV Pvt. Ltd. & Ors. v. State of Uttar Pradesh have upheld the respective entertainment tax legislations levying tax on entertainment through DTH service, within the legislative competence of the State legislature under Entry 62 of List II of the Constitution of India. [9.7] It is further submitted by Shri Trivedi, learned Advocate General appearing on behalf of the State that in the present case "Aspect Theory" as originally propounded by the Courts in Canada and thereafter followed by Courts in India, would be applicable. It is submitted that as per the said theory, the subjects which in one aspect and for one purpose fall within the powers of a partic....
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....t even while assuming without admitting that the said two concepts are intertwined, the strands easily be separated by employing the aspect theory and in respect of the service aspect, the taxable event is entertainment from the content. [9.9] It is submitted that in the case of Bharat Sanchal Nigam Ltd. (Supra), the petitioner Company was providing service to its subscribers through SIM Card, where, the service tax was liable on the cost of SIM Card whereas, Sales Tax was also leviable on the sale price of SIM Card including value of activation charge. It is submitted that in the said case it was alleged that if the SIM card is not sold by the assessee to the subscribers but is merely part of the service rendered by the service providers, then in that case, the SIM card cannot be charged separately to Sales Tax, since it would ultimately depend upon the intention of the parties. It is submitted that therefore the decision of the Hon'ble Supreme Court in the case of BSNL (Supra) has no applicability of whatsoever nature, to the facts and circumstances of the present matter. [9.10] It is further submitted that in the case of BSNL (Supra), the Hon'ble Supreme Court had deal....
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....he aforesaid decision it is held that there is a crucial difference between the tax levied for being in the profession and the tax levied on the value of service rendered in the profession and not the fact of belonging to the profession or the income derived therefrom and that therefore, as per the aspect theory, it is open to the different Legislatures to legislate with regard to different aspects of the same subject matter. [9.11] Now, so far as the contention on behalf of the petitioners that while interpreting Entry 62 of List II, one cannot go off the limit and one cannot define the term "entertainment" used in the Act so as to inflate the ordinary meaning of the term "entertainment" used in the Entry, because the term "entertainment" used in Entry 62 of List II means "entertainment" in public place, a public show and not within the precincts of a private person's home and the contention on behalf of the petitioners that DTH entertainment is not the placerelated entertainment and hence, levy of Entertainment Tax under the Act on the same is constitutionally bad is concerned, Shri Trivedi, learned Advocate General has heavily relied upon the decision of the Hon'ble Sup....
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....cle 14 of the Constitution of India on the ground that there is a distinction in levy of entertainment tax at Rs. 200 per TV set for connection sought to be charged from DTH operators and whereas only Rs. 6 per month is charged from cable operators, though the entertainment being provided is the same and reliance placed upon the decision of the Hon'ble Supreme Court in the case of Ashirwad Films (Supra) and the decision of the Madras High Court in the case of Tata Sky Ltd. (Supra) is concerned, it is submitted that the decision of the Hon'ble Supreme Court in the case of Ashirwad Films (Supra) would not be applicable to the facts of the case on hand. It is submitted that in the case of Ashirwad Films (Supra), the Hon'ble Supreme Court was dealing with the classification only the basis of language. It is submitted that in the present case the distinguishing features between two classes i.e. DTH operators and cable operators have been clearly mentioned in the further affidavit, which clearly go to show that the different classification made in the present case is not like the one present before the Hon'ble Supreme Court in the case of Ashirwad Films (Supra) where the ....
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....ve that "while Cable TV programmes reach the person entertained through analogue system linked by metallic coaxial cable or optic fibre cable of Central System without headend, in DTH Service, the subscribers receive the content by using antenna, receiving signals through satellite system and that beyond that, no difference is found in the content of entertainment provided by means of Cable television or through DTH." It is submitted that however further observations of the Hon'ble Madras High Court to the effect that mere difference in technology and quality of presentation, number of channels available, possibility of recording facility or payment facility, are per se not legally sustainable and run contrary to the following judgments, according to which, such differences can always justify the classification being not in contravention of Article 14 of the Constitution. [9.16] It is submitted that in the case of Prakashchand Anand v. State of Himachal Pradesh reported in AIR 1984 HP 47 (Para 8), the Hon'ble Division Bench of the High Court upheld the subclassification of cinematograph into cinema exhibition in theatres on one hand and video exhibition on the other, with ....
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....nd that if by Regulations different and lenient treatment is shown to exhibition of films by video cassette recorder, those Regulations violate the principle underlying Art.14." (Emphasis supplied) "9. It will thus appear that while the entertainment through exhibition of films has been subjected to entertainment duty, the difference in levying of such entertainment duty in these two cases is on a very sound footing and in no case can be said to be unreasonable. Interest of cinematograph exhibitors has been amply safeguarded. It will not only be inconvenient but also unjust to charge entertainment duty on every admission to the entertainment by video cassette recorder. The challenge to the constitutionality of the M.P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983 must, therefore fail." [9.18] It is further submitted that in the case of Ramesh Sippy v. State of Maharashtra reported in AIR 1989 Bombay 260 (Paras 7 and 10), it was observed as under by the Hon'ble Bombay High Court. "7. It is by now well settled that in the matter of taxing statute the legislature enjoys a larger discretion in the matter of classification so long as it adheres to the fundam....
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....e number of video game parlours in the Municipal Limits of Greater Bombay and elsewhere.In Greater Bombay video game parlours have increased from 119 in January 1984 to 174 in June 1984. Since Bombay is a commercial town and its population is larger than elsewhere in Maharashtra, video game parlours in Bombay are making more profits than the video game parlours elsewhere.Therefore since the takings in Bombay from the video game parlours are larger, a flat rate of duty at the rate of Rs. 500/- per month per machine is charged whereas having regard to the takings in places other than Bombay a flat rate of only Rs. 200/- per month per machine is charged. Thus a reasonable classification is made in that behalf. The micro classification within the metropolitan city of Bombay was neither called for nor possible. Therefore the classification made is wholly reasonable and it is not possible for us to accept the challenge of the petitioners based on Art.14 of the Constitution also." [9.19] It is further submitted that in the case of Sri Srinivas Theater v. State of Tamil Nadu reported in AIR 1992 SC 999 (Paras 19 and 21), the Hon'ble Supreme Court has clearly observed that open air the....
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....t which has legislative competence to enact a law and that therefore, the Act enacted by the State Legislature in the present case is constitutionally valid. It is submitted that there may be cases where regulatory control may lie with the Central Government, which can exercise the powers in that behalf, but at the same time, taxation powers may be there with the State Legislature, if the nature of tax is relatable to any of the entries of List II of the 7th Schedule to the Constitution, where the State Legislature has exclusive power to enact law. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of State of West Bengal v. Kesoram Industries Ltd. reported in (2004)10 SCC 201 more particularly 129 of the said decision. [10.0] Now, so far as the challenge to Rules 3, 7, 11, 14 and 16 of the Rules, 2010 by some of the petitioners on the ground that they are ultra vires the Constitution of India and are arbitrary, capricious and violative of Articles 14, 19(1)(g) and 21 of the Constitution of India is concerned, Shri Trivedi, learned Advocate General appearing on behalf of the State has heavily relied upon the de....
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....cause some inconvenience or hardship, the same cannot be invalid on that ground alone. [10.3] It is further submitted that similarly Rule 12 cannot be said to be violative of Article 21 of the Constitution of India merely because it empowers the authority under the Act to have free access to any place in respect of which, a Certificate of Registration is used, in execution of their duties under the Act. Making above submissions and relying upon above decisions, it is submitted by Shri Trivedi, learned Advocate General appearing on behalf of the State that the provisions of the Act and the Rules are not violative of Articles 14, 19(1)(g), 265, 300A, 301 of the Constitution of India as alleged. It is submitted that the Act is a competent legislation enacted by the State Legislature and therefore, the petitioners are not entitled to any reliefs as prayed for or otherwise and therefore, all the petitions are required to be dismissed with the direction to the petitioners to forthwith make the payment of the outstanding dues towards entertainment tax with the compliance of the current tax liabilities. [11.0] Heard learned advocates appearing on behalf of respective parties at length. ....
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.... one part of a place of entertainment, is subsequently admitted to another part thereof for admission to which a payment involving tax or more tax is required; (ii) any payment for seats or other accommodation in a place of entertainment; (iii) any payment for a programme or synopsis of an entertainment; (iv) any payment made for the loan or use of any instrument or contrivance which enables a person to get a normal or better view or hearing of the entertainment which, without the aid of such instrument or contrivance, such person would not get; (v) any payment for any purpose whatsoever connected with an entertainment which a person is required to make a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment; (vi) any payment for admission of a motor vehicle into the auditorium of a cinema known as DriveinCinema; (vii) any payment made by a person by way of contribution or subscription or installation charges or connection charges or any other charges collected in any manner whatsoever for television exhibition with the aid of any type of antenna with a cable network attached to it or cabl....
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....an entertainment with the aid of any type of antenna or cable television or Direct-To-Home (DTH) Broadcasting Service shall carry on television exhibition without obtaining a valid Certificate of Registration from the prescribed officer. (2) The provisions of sub-section (1) shall not be deemed to have been contravened if the proprietor having applied for such registration as provided in this section within three months from the date of the commencement of the Gujarat Entertainments Tax (Amendment) Act, 1993, carries on television exhibition with the aid of any type of antenna with a cable network attached to it or cable television. (2A) The provisions of sub-section (1) shall not be deemed to have been contravened if the proprietor having applied for such registration as provided in this section within three months from the date of the commencement of the Gujarat Entertainments Tax (Amendment) Act, 2009, carries on television exhibition with the aid of Direct-To-Home (DTH) Broadcasting Service. (3) Every proprietor providing an entertainment with the aid of any type of antenna or cable television or Direct-To-Home (DTH) Broadcasting Service shall apply in such form, in such ....
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....status of antecedents and the previous experience, if any, of the proprietor; (iii) the adequate precaution made for safety, convenience and comfort of the persons covered under Direct-To-Home (DTH) Broadcasting Service as per the guidelines issued by the Government of India from time to time. Explanation.- For the purpose of subrule (1) the expression 'antecedents' means the conduct of the applicant in relation to the regular payment of any tax or other dues payable by him. (2) The Certificate of Registration under section 6C shall be issued Proforma-2 and the Commissioner may prescribe special condition or conditions to be fulfilled, in the certificate. 5. Refusal to Grant Certificate.- The Commissioner shall have absolute discretion to refuse a Certificate of Registration for grounds to be recorded in writing for refusal of granting the Certificate of Registration. The Commissioner before refusing the Certificate shall afford to the proprietor an opportunity of being heard. 6. Fees.- The fees for a Certificate of Registration shall be rupees 10 lacs, the fees for renewal of Certificate of Registration shall be ten thousand and the fees for duplicate Certificate of Re....
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....t. - (1) The assessment of tax in the respect of an entertainment shall be made within thirty days after the return in respect of such entertainment is furnished. (2) After the assessment is made, the prescribed officer shall serve a notice upon the proprietor for payment of tax, if any additional amount of tax is found to be due." [11.2] In view of section 6(e) of the Act, entertainment tax is leviable / imposed on per television set on the entertainment by Direct-To-Home (DTH) Broadcasting Service. Section 6(e) of the Act is very exhaustive and it provides that notwithstanding anything contained in section 3, 4, 6, 6A or 6B or any other provisions of this Act, there shall be levied and paid, by the proprietor of every Direct-To-Home (DTH) Broadcasting Service, to the State Government, the entertainments tax, per television set which receives radio frequency signals for exhibition of films or moving pictures or series of pictures with the aid of a set top box or any other apparatus attached to it for securing transmission through Direct-To-Home (DTH) Broadcasting Service, a tax at the annual rate of Rs. 200 per television set for which such proprietor has provided Direct-To-Hom....
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....st II of the 7th Schedule to the Constitution to make a law for the levy and collection of tax on such entertainments. In the aforesaid decision the Hon'ble Supreme Court has also further held that power of the State to levy tax on luxuries including taxes on entertainment, amusement etc. falling under Entry 62 of List II of the 7th Schedule is not fettered by the enactment of Cable TV Network (Regulation) Act, 1995 by Parliament. It is specifically observed and held that the power of regulation or control under the said central enactment is separate and distinct from the power of taxation by the State legislature under Entry 62 of List II being a specific power, the power of taxation cannot be cut down or fettered by the general power or regulation as exercised by the Parliament in enacting the said 1995 Act. It is further observed and held that even enactment of more than one statute on different taxable objects and taxable persons under the legislative field exclusively reserved for the State, is not prohibited by the Constitution of India. In the aforesaid decision, in paras 34 to 42, the Hon'ble Supreme Court has held as under: "34. In the instant case, respondent No....
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....t II of Seventh Schedule to the Constitution of India, and the two statutes apply admittedly to levy of tax on amusements, entertainments and luxuries in their respective area but the area of application of the said 1982 Act is different as would evident from the provisions of 1922 Act and the 1972 Act as aforesaid. The said 1982 Act was, for the first time, enacted by the State Legislature in 1982 and its area of application was initially confined to levy and collection of tax from the holders of television set or sets under Section 4 of that Act. Thereafter, under Section 4A of that Act, inserted by the West Bengal Taxation Laws (second Amendment) Act, 1983, the area of its application was extended to levy and collection of tax from the holders of video cassette recorder. The purpose of sub-Section 4(a) of Section 4A of the Act is to levy and collection of tax from any person who provide cable service directly to consumers or transmits to a sub-cable operator through a cable television network and otherwise controls or is responsible for the management and operation of a cable television network and such person has been defined as "Cable Operator" being a taxable person exclusive....
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.... the terms and conditions set out in this agreement. Price The price payable by the FRANCHISEE for access to the signals provided by the NETWORK shall be as follows: (a) Rs. 25/per subscriber per month to be paid before the 7th day of the month. (b) The FRANCHISEE will keep an interest free deposit of Rs. 50/per subscriber with the NETWORK. (c) The price mentioned in (a) above is liable to change depending upon the market conditions and by mutual understanding between the parties of the area. Terms and Conditions (a) The NETWORK shall not provide any connections direct to home in the territory where the FRANCHISEE is operating. (b) The FRANCHISEE would provide a list of subscribers within seven days of signing this agreement with full name, address and other information of relevance as required by the NETWORK. Subsequently any change in the subscriber list would be communicated to the NETWORK within seven days. The FRANCHISEE would submit complete information and not withhold the name of subscribers or declare less number of subscribers to the NETWORK. * * * (d) The FRANCHISEE is authorised to receive and immediately retransmit and/or communicate the signals of ....
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....venth Schedule to the Constitution of India may be imposed not only on the person spending on entertainment but also on the act of a person entertaining, or the subject of entertainment. It is well settled by this Court that such tax may be levied on the person offering or providing entertainment or the person enjoying it. The respondents admittedly engaged in the business of receiving broadcast signals and the instantaneously sending or transmitting such visual or audio visual signals by coaxial cable, to subscribers homes through their various franchise. It has been made possible for the individual subscribers to choose the desired channels on their individual T.V. sets because of cable television technology of the respondents and of sending the visual or audio visual signals to subcable operators, and instantly retransmitting such signals to individual subscribers for entertaining them through their franchise. The respondents' act is, no doubt, an act of offering entertainment to the subscribers and/or viewers. The respondent is very much directly and closely involved in the act of offering or providing entertainment to subscribers who are on his record. For the fact of offe....
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.... or any other programme to the subscriber and/or viewers against payment, and as such owner or person exhibits such performance, film or any other programme through his cable television network directly to customers he is liable to pay tax. Except that owner or person of the class referred to in sub-section (4a) of Section 4A of the said 1982 Act, no other person can be held liable to pay such tax. There is clear indication of the character of tax from the incidence of such tax or taxable event which takes place on the happening of the event of offering entertainments to the subscribers. The person on whom the legal liability to pay tax falls he has also been clearly and unambiguously mentioned in the charging section. The rates of tax has been sought to be specified by the notification. The measure of tax is the "gross receipt" on the basis of which the person is saddled with the liability to pay tax. There is no uncertainty or vagueness of the legislative scheme. The tax levied by sub-section (4a) of Section 4A of the said 1982 Act does not interfere with the fundamental rights guaranteed under Article 19(1)(g) of the Constitution or is violative of Article 19(1)(g). 41. We als....
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....of telecommunication network for presentation to members of public. In the present case, respondent No.1 sends visual images and audio signals for presentation to the individual subscribers at various homes through their Feeder Line i.e. coaxial cable or any other device used for transmitting audio and visual signals in terms of clause 2 of the said agreement. The franchisee has access to the signals provided by respondent No.1. Therefore, it cannot be disputed that the price or prices received or receivable by the respondent No. 1 is the amount received or receivable by him for transmitting the signal for exhibition of any performance, film or any other programme telecast and the aggregate of such prices or amounts is the gross receipt of the respondent No.1 in relation to any month or part thereof. Who will be considered the giver of the entertainment the Cable operator or the subcable operator?" [11.4] Applying the ratio of the law laid down by the Hon'ble Supreme Court in the case of Purvi Communication (P) Ltd. and Ors. (Supra) to the facts of the case on hand, providing Direct-To-Home (DTH) Broadcasting Service in the aid of set top box would certainly fall within the me....
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....in the meaning of "entertainment", in light of Entry 62 of the 7th Schedule to the Constitution of India, levy of entertainment tax on providing Direct-To-Home (DTH) Broadcasting Services is permissible within the legislative competence of the State. [11.6] Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited (Supra) and the submissions made by the learned Counsel appearing on behalf of the respective petitioners with respect to the "Aspect Theory" and their attempt to distinguish the decision of the Hon'ble Supreme Court in the case of Puvi Communications (P) Ltd. and Ors. (Supra) from the decision of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited (Supra) and the contention on behalf of the petitioners that later judgment of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Limited (Supra) marches ahead of decision in the case of Purvi Communications (P) Ltd. and Ors. (Supra) by holding inter alia that if one single transaction has two taxable events, both can be taxed but two taxable events cannot be mixed up by allowing two separate taxes on one event and ....
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....r the Finance Act, 1998 for taxable service rendered by practicing Chartered Accountants was challenged on the ground that the impugned service is, in pith and substance, a tax on the practice of a "profession" and "trade", falling within employment relatable to Entry 60 in List II of the 7th Schedule to the Constitution and, therefore, beyond the competence of Parliament. Ultimately it is held that there is a difference between the tax levied for being in the profession and the tax levied on the value of service rendered in the profession and not the fact of belonging to the profession or the income derived therefrom and that therefore, as per the Aspect Theory, it is open to the different Legislatures to legislate with regard to different aspects of the same subject matter. Even the aforesaid issue is also directly covered by the decision of the Hon'ble Supreme Court in the case of Federation of Hotels & Restaurants Association of India (Supra). [11.8] Now, so far as the contention on behalf of the petitioners and challenge to the levy of entertainment tax on the DTH service on the ground that the same is violative of Article 14 of the Constitution of India is concerned, it ....
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....ding the constitutionality of the tax, oppressiveness; wisdom of advisability or expediency of a tax as measure of revenue; hardship; are not relevant. The Hon'ble Supreme Court has further observed and held that the Court is not concerned with the wisdom or unwisdom, justice or injustice of the law as the legislature is alive to the need of the people. It is further observed and held that in the field of taxation, the legislature greatly enjoys a greater latitude of classification. [11.10] In the case of State of M.P. vs. Rakesh Kohli & Anr. reported in AIR 2012 SC 2351 in paras 13, 14 and 29, the Hon'ble Supreme Court has observed and held as under: "13. In our opinion, the High Court was clearly in error in declaring Clause (d), Article 45 of Schedule 1-A of the 1899 Act which as brought in by the M.P. 2002 Act as violative of Article 14 of the Constitution of India. It is very difficult to approve the reasoning of the High Court that the provision may pass the test of classification but it would not pass the requirement of the second limb of Article 14 of the Constitution which ostracises arbitrariness, unreasonable and irrationality. The High Court failed to keep in....
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.... it has not made the classification which commends to the Court as proper. Nor can the legislative power be said to have been unconstitutionally exercised because within the class a subclassification was reasonable but has not been made. It is further observed that the modern State, in exercising its sovereign power of taxation, has to deal with complex factors relating to the objects to be taxed, the quantum to be levied, the conditions subject to which the levy has to be made, the social and economic policies which the tax is designed to subserve, and what not. It is further observed that unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review. [11.13] In the case of Sri Krishna vs. Town Area Committee, Chirgaon reported in AIR 1991 SC 2096, the Hon'ble Supreme Court in para 31 has observed and held as under: "31. The contention that the tax is discriminatory in view of the exemptions granted to some of the products and to those that enter the TAC by rail or motor transport is equally untenable. It is for the legislature or the taxing authority to determine the question of need, the policy and to select the goods or services for taxation....
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....on of the Madras High Court in the case of Tata Sky Ltd. rendered in Writ Petition No.25721/2011 and other cognate matters is concerned, with respect, for the reasons above, we are not in agreement with the view taken by the Madras High Court on the alleged violation of Article 14 of the Constitution of India. [12.0] In some of the petitions, some of the petitioners have also challenged the validity of Rules 3, 7, 11, 14 and 16 of the Rules, 2010 on the ground that they are ultra vires the Constitution of India and are arbitrary, capricious and violative of Articles 14, 19(1)(g) and 21 of the Constitution of India. [12.1] Rule 6 deals with "Certificate of Registration" and Rule 7 deals with "Security deposits to be furnished" on obtaining certificate of registration. Section 6C of the Act deals with registration whereas Section 7 of the Act lays down the provisions relating to "Admission to Entertainment". Sub-section (3) of section 7 empowers the State Government to require the proprietor to give security for the payment of tax and other purposes. When to safeguard the future liability, Rule 7 provides for "Security Deposit", it cannot be said to be unconstitutional and/or arbit....