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Supreme Court of India
State Of Maharshtra vs Pan India Paryatan Limited on 18 February, 2020Author: Uday Umesh Lalit
Bench: Uday Umesh Lalit, Hon’Ble Ms. Malhotra, Hemant Gupta
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 6438-6439 OF 2009
THE STATE OF MAHARASHTRA & ORS. …..APPELLANT(S)
VERSUS
PAN INDIA PARYATAN LIMITED & ANR. …..RESPONDENT(S)
JUDGMENT
HEMANT GUPTA, J.
1. The challenge in the present appeals is to an order passed by the
Division Bench of the High Court of Judicature at Bombay on
19th December, 2006 whereby Sections 3(1)(b), 3(2) and sub-
sections 5(a) and (b) of the Bombay Entertainments Duty Act,
19231 were interpreted to hold that the rate of tax payable by the
respondents2 would be as follows:
“i. For the first three years from date of
commencement of park the Petitioners are not required
to pay any duty,
Signature Not Verified
Digitally signed by
MUKESH KUMAR
Date: 2020.02.18
17:40:26 IST
ii. Duty for the 4th and 5th year, from the date of
commencement, duty payable is at the rate of 3.75%,
Reason:
1 for short, ‘Act’
2 for short, ‘writ petitioners’
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applying concessional provision.
iii. Duty payable during 6th year from the date of
commencement of park and there onwards, is at rate of
7.5%.”
2. The writ petitioners own and run an amusement park within limits
of Greater Bombay which was opened to the public for admission
on 25th December, 1989. They charged a lumpsum amount for
admission and entertainment to the amusement park. In terms of
the Act, the writ petitioners were required to pay entertainment
duty.
3. In the writ petition before the High Court, the assertion of the writ
petitioners was that on 4th October, 1994, it sought confirmation
that entertainment tax to be levied would be 3.75% of the value of
a consolidated ticket. Such stand was accepted by appellant No. 2-
The Collector, Bombay Suburban District. Later, vide
communication dated 7th January, 1995, the writ petitioners were
informed that they would be required to pay duty @7.5% and not
@3.75%. The writ petitioners challenged such demand by way of
writ petition. The said writ petition was withdrawn with liberty to
file a fresh petition.
4. The State sought to recover the entertainment duty @7.5% in
respect of entry to the amusement park for the period from
16th September, 1994 to 24th December, 1994 and @15% from
25th December, 1994. The writ petitioners paid the duty under
protest. In a writ petition challenging the provisions of the Act, the
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writ petitioners sought refund of the duty paid.
5. The High Court found that the following questions arose for
consideration:
“i. Rate of entertainment duty payable by the
Petitioners for a period from 16 th September, 1994 to
24th December, 1994.
ii. Rate of duty payable for the period commencing 25 th
December, 1994.
iii. Whether action of Respondents in seeking to
recover duty payable during 25th December, 1989 to
23rd August, 1990 already adjusted against refund
payable to Petitioners, is justified and valid in law. This
question is raised by Writ Petition No. 2009 of 1998.”
6. Before we consider the respective arguments of the learned
counsel for the parties, the statutory provisions of the Act need to
be referred:
“2 (a-1). “amusement park” means a place wherein
various types of amusements including games or rides
or both but excluding exhibition by cinematograph and
video exhibition are provided fairly on permanent basis,
on payment for admission;
xx xx xx
2 (b) “payment for admission” in relation to the levy of
entertainments duty, includes-
(i) any payment made by a person who, having been
admitted to one part of a place of entertainment, is
subsequently admitted to another part thereof for
admission to which a payment involving duty or more
duty is required,
xx xx xx
(d) “admission to an entertainment”, includes
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admission to any place in which the entertainment is
held or any place where from the entertainment is
provided by means of cable connection from any type
of antenna with a cable network attached to it or cable
television for Direct-to-Home (DTH) Broadcasting
service;
xx xx xx
(f) “entertainment duty”, or “duty” in respect of any
entertainment means the entertainment duty levied
under section 3;
3. Duty on payments for admission to entertainment. –
(1) There shall be levied and paid to the State
Government on all payments for admission to any
entertainment [except in the case of video games,
exhibition by means of any type of antenna or cable
television, or exhibition by means of Direct-to-Home
(DTH) Broadcasting service, bowling alley, Go-carting,
dance bar, discotheque, amusement park, water sports
activity, pool game] a duty (hereinafter referred to as
“entertainments duty”) at the following rates, namely:-
(a) xx xx xx
(b) In the case of every entertainment, [other than
exhibition by cinematograph including video exhibition
Provided that, in the case of the cabaret entertainment,
fifty per cent of the total payment charged by the
proprietor per person per show, whether with or without
eatables or beverages and whether regular tickets are
issued or not, for admission to such entertainment,
shall be deemed to be the payment for admission and
duty shall be levied thereon accordingly under this
clause:
Provided further that, the entertainment duty in respect
of an amusement park shall be 15 per cent of the
payment made for admission to the amusement park,
including payment made for admission for games and
rides, whether charges separately or not”
3(2) Where the payment for admission to an
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entertainment is made by means of a lump sum paid as
a subscription or contribution to any society, or for a
season ticket or for the right of admission to a series of
entertainments or to any entertainment during a
certain period of time, or 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 charge, the
entertainment duty shall be levied and paid on 50 per
cent; of such lump sum at the rates specified in clause
(b) of sub-section (1).
3(5)(a) Notwithstanding anything contained in sub-
section (2) or in any other provisions of this Act but
subject to the provisions of clause (b), on and with
effect from the 25th December, 1989, there shall be
levied, and paid by the proprietor to the State
Government, the entertainments duty in respect of an
amusement park in the following manner, namely:-
(i) for the first three years from the date of
commencement of the amusement park, no duty;
(ii) for the subsequent two years, at the rate of fifty per
cent of the rate of duty leviable under clause (b) of sub-
section (1) or, as the case may be, sub-section (2) of
section 3;
(iii) from the sixth years, full amount of entertainments
duty leviable at the rate of specified in clause (b) of
sub-section (1) or, as the case may be, sub-section (2)
of section 3.
Explanation.- For the purpose of this sub-section,-
********* ”
(emphasis supplied)
7. The High Court held that entertainment duty to be levied for the
amusement park is 50% of 15% i.e. 7.5% under Section 3(2) of the
Act, therefore, in terms of Section 3(5)(a) and (b) of the Act, the
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entertainment duty is 50% of 7.5% i.e. 3.75%. The High Court held
that such interpretation is on the basis of a cumulative reading of
the provisions of the Act.
8. The argument of the learned counsel for the appellants is that
Section 3(5)(a) of the Act starts with a non-obstante clause
contemplating levy of an entertainment duty in respect of the
amusement park, in the manner mentioned therein. Section 3(1)
of the Act contemplates levy of entertainment duty in respect of
amusement park to be 15% of the payment made for admission to
the same. In terms of the non-obstante clause with which Section
3(5)(a) begins, the levy of duty shall be in terms of that sub
-section. There is no difficulty in respect of sub-clause (i) of Section
3(5)(a) of the Act, which is to the effect that no duty shall be
payable. Sub-clause (ii) of Section 3(5)(a) of the Act contemplates
that for the subsequent two years, duty @50% would be leviable
under clause (b) of sub-section (1) or, as the case may be, sub-
section (2) of section 3 of the Act.
9. The learned counsel for the writ petitioners argued that upon a
collective reading of the definition of “amusement park” (which
means a place where various types of entertainment are provided
on a permanent basis on payment for admission) and Section 3(2)
which provides that upon payment of admission to entertainment
by means of a lump sum amount for the right to admission to a
series of entertainments, the entertainment duty would be charged
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@ 50% of the rates mentioned in Section 3(1)(b). Thus, in the case
where the amusement park charges a lump sum amount as a right
to admission for all the rides and games available in the said
amusement park, then, Section 3(2) will be applicable and the
entertainment duty payable by the amusement park would be half
of what is provided in Section 3(1)(b) being 15% i.e. 7.5%.
10. It is also argued that the proviso to Section 3(1)(b) ends with the
phrase “including payments made for admissions for games and
rides, whether charged separately or not”. Thus, 15%
entertainment tax was payable by the amusement park where it
charged an amount for mere admission and the charges for the
games and rides being separate. However, where the amusement
park charges a lump sum amount which includes the charges for
games and rides, the entertainment tax payable would be 7.5 % in
terms of Section 3(2).
11. It is argued that Section 3(5)(a) of the Act further gives a tax
holiday on the duty payable under Section 3(1)(a) or Section 3(2)
of the Act, therefore, for the fourth and fifth year of the operation
of the amusement park, the duty would be 3.75%.
12. We do not find any merit in the argument raised by learned
counsel for the writ petitioners. In respect of first three years
falling in Section 3(5)(a) of the Act, there is no dispute, as no duty
is payable. The controversy revolves around the levy of
entertainment duty for the fourth and fifth year and subsequently
from the sixth year onwards. Sub-clause (ii) of Section 3(5)(a)
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contemplates that duty @50% under clause (b) of sub-section (1)
or, as the case may be, sub-section (2) of Section 3 would be
payable. In respect of the first part of sub-clause (ii) of Section
3(5)(a) of the Act, there can possibly be no dispute as the
entertainment duty is 50% of 15% leviable under Section 3(1)(b) of
the Act.
13. It is sub-section 3(2) of the Act which is required to be interpreted.
The said provision is in respect of charging of duty at 50% of the
duty fixed in Section 3(1)(b) of the Act to the specific category of
visitors to the amusement parks such as payment in:-
a) “lump sum as a subscription or contribution to any society”,
or
b) “for a season ticket” or
c) “for the right of admission to a series of entertainments” or
d) “any entertainment during a certain period of time”
14. We find that the writ petitioners do not fall in any of the four
categories as mentioned above. Category (a) is subscription or
contribution in lump sum to any society. The expression Society is
not defined in the Act. Therefore, Society would mean a Society
registered under the Societies Registration Act, 1860 or other
similar statutes. The writ petitioners would not fall in such category
as the payment is not to any society. It is not the case of writ
petitioners that they have issued a season’s ticket to the visitors.
A Season ticket would mean a regular visitor visiting the
amusement park regularly at a specific time.
15. Category (d), that entry would be on charging 50% of the duty
fixed for any entertainment during a certain period of time,
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depends upon the decision of the State Government and/or
Municipal Corporation to grant that relaxation to enable the writ
petitioners or such other amusement park owners to charge duty
at a lesser rate.
16. The prime argument turns around in respect of category (c) as
delineated above i.e. for admission to a series of entertainment.
The argument of the learned counsel for the writ petitioners is that
when a ticket is issued by them, it is a ticket for admission to series
of entertainment. We do not find any merit in the said argument.
The amusement park is defined under Section 2(a-1) of the Act to
mean a place wherein various types of amusements including
games or rides or both are provided fairly, on a permanent basis,
on payment for admission. The payment for admission is defined
under Section 2(b) of the Act as the payment made by a person
having admitted to one part of a place of entertainment and
subsequently admitted to another part. Section 2(d) of the Act
deals with admission to an entertainment which includes admission
to any place in which the entertainment is held.
17. The argument that when a lumpsum amount is paid as a right of
admission for all rides and games, then it becomes admission to
series of entertainment, is not tenable. The writ petitioners issue
one ticket including one or more rides or games situated in one
compound. It is not the case of the writ petitioners that for every
ride or game, it is charging separately. The admission to
entertainment in terms of Section 2(d) of the Act includes all rides
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and games which are provided by the service provider. The series
of entertainment as contemplated by Section 3(2) of the Act does
not mean that on a single day ticket for one entry, it can be treated
to be a series of entertainments. The series of entertainments can
be where the facility for a game or ride is provided on multiple
days and a combined ticket is issued for events for each day. It will
only then be said to be series of entertainment.
18. Once an admission ticket is granted, it is not in terms of Section
3(2) of the Act but only in terms of Section 3(1)(b) of the Act.
Section 3(2) of the Act has no applicability for a visitor to an
amusement park who does not fall in any of the four categories
mentioned in Section 3(2) of the Act. Since, the activities
undertaken by the writ petitioners are not failing part of Section
3(2) of the Act, therefore, they are not entitled to rebate of 50%
provided to specified category of persons in Section 3(2) of the Act.
19. Section 3(5)(a) of the Act has an overriding effect over Section 3(1)
(b) and Section 3(2) of the Act. In respect of the first three years
from the date of commencement of the amusement park, there is
no issue as no entertainment duty is payable. But, in respect of
the subsequent two years, the rate of duty leviable is under clause
(b) of sub-section (1) or, as the case may be, under sub-section (2)
of Section 3. Section 3(1)(b) of the Act is applicable to all
amusement parks whereas Section 3(2) of the Act has a limited
applicability only in respect of the specified categories therein. All
amusement parks for all entertainment are not entitled to
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concessional duty in terms of Section 3(2) of the Act. Therefore,
the writ petitioners cannot claim benefit under Section 3(2) of the
Act. The argument is preposterous as the writ petitioners are
firstly claiming the benefit under Section 3(2) of the Act and then
under Section 3(5)(a) of the Act. The amusement parks would be
entitled to only one benefit either under Section 3(2) or under
Section 3(5)(a) of the Act. Since Section 3(2) is not applicable to
all amusement parks for all other activities, therefore, the
entertainment duty in terms of Section 3(5)(a) of the Act alone
would be leviable. The duty under Section 3(2) of the Act would be
leviable only in respect of specified categories mentioned therein.
20. Thus, we are unable to agree with the judgment of the High Court
that in terms of Section 3(5)(a) of the Act, the entertainment duty
is 50% of the duty payable under Section 3(2) of the Act.
Consequently, the order passed by the High Court is set aside. The
appeals are allowed.
………………………………………J.
(DEEPAK GUPTA)
………………………………………J.
(HEMANT GUPTA)
NEW DELHI;
FEBRUARY 18, 2020.
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