1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
WRIT PETITION NO. 2868 OF 1993
Ballarpur Paper Industries,
a Company registered under the
Indian Companies Act, 1913 and
deemed to be registered under the
provisions of the Companies Act, 1956,
Having its registered office at Ballarpur,
tq. dist. Chandrapur. .....PETITIONER
...V E R S U S...
1. The State of Maharashtra
Revenue and Forest, Mantralaya,
Madam Cama Road, Bombay, 400 032.
2. The Collector, Chandrapur,
3. Additional District Magistrate,
Chandrapur. .....RESPONDENTS
-------------------------------------------------------------------------------------------------
Mr. S. V. Manohar, Advocate for the petitioner.
Mr. P. D. Kothari, A.G.P. for the respondents.
-------------------------------------------------------------------------------------------------
WITH
WRIT PETITION NO. 2729 OF /1993
Power Grid Corporation of India Ltd.
a Company incorporated having its
Office at Hemkunt Chambers,
89, Nehru Place, New Delhi. .....PETITIONER
::: Downloaded on - 09/06/2013 13:39:48 :::
2
...V E R S U S...
1. The State of Maharashtra
Revenue and Forest Department,
Mantralaya, Madam Cama Road,
Bombay, 400 032.
2. Additional District Magistrate,
Chandrapur, tq. dist. Chandrapur. .....RESPONDENTS
-------------------------------------------------------------------------------------------------
Mr. S. C. Mehadia, A. S. Mehadia, Advocates for the petitioner.
Ms. K. S. Joshi, A.G.P. for the respondents.
-------------------------------------------------------------------------------------------------
CORAM:- ANOOP V. MOHTA & C. L. PANGARKAR, JJ.
Date of Reserving the Judgment :- July 11, 2008
Date of Pronouncing the Judgment:- August 6, 2008
J U D G M E N T (Per:- Anoop V. Mohta, J.)
1. The petitioner has challenged an order passed by
Additional District Magistrate, Chandrapur dated 14.09.1993 under
Section 3(4) and 3 (a) (a) of the Bombay Entertainments Duty Act,
1923 (for short the “Act”) by which the petitioner is directed to pay
entertainment tax and surcharge at the rate of 25% and 10 % on the
total cost of Rs. 25,00,000/- incurred/spent for Dish Antenna, Cable
Television pursuance to an amendment to the Bombay Entertainments
::: Downloaded on – 09/06/2013 13:39:48 :::
3
Duty Act, 1923 dated 25.12.1992 vide Ordinance No. XII of 1992, the
Bombay Entertainments Duty (Amendment) Ordinance, 1992 and also
challenged the constitutional validity of the Amended Act.
2. By order dated 06.12.1993, this Court admitted the writ
petition and granted an interim relief in terms of prayer clause (C),
thereby has stayed the effect and operation of the impugned order and
further recovery of the entertainment duty as per the impugned order.
3. The petitioner is a registered Company, who is running a
large scale paper unit at Ballarpur, district Chandrapur and is having
large number of employees. A residential colony at Ballarpur, district
Chandrapur has been established wherein accommodation is provided
to its selective employees. It is residential colony established by the
petitioner.
4. Some time in the month of June-1992, the petitioner
purchased a Dish Antenna (Antenna), which receives national and
::: Downloaded on – 09/06/2013 13:39:48 :::
4
international satellite transmissions. The petitioner has provided
connection of this Antenna through the cable to the respective quarters
of its employees, with a view to provide facilities of television
transmissions to its employees. The petitioner has spent about
Rs.25,00,000/- for commissioning and installing the said Antenna of
its own for giving connection to its employees. The petitioner incurred
the said expenses without taking any contribution of any kind
including for initial establishment or installation or monthly payments
for providing the services of transmissions through cable to their
respective televisions. The said Antenna was fully installed in the
month of November-1992 and connections were provided in the
month of October-1992. The said expenses, borne for the Dish
Antenna, are shown in the account books of the Company. The
petitioner has been utilizing the Antenna to view satellite
transmissions only and was not using the said Antenna for exhibiting
films or movies or any such other purposes.
::: Downloaded on – 09/06/2013 13:39:49 :::
5
5. In the year 1923, the State of Bombay enacted the
Bombay Entertainments Duty Act, 1923 being Bombay Act No. I of
1923 (for short “the Act”). The Act sought to impose duty on
entertainments including any exhibition, performance and
amusement, gaming of sport to which person admitted on payments.
The said entertainment duty was sought to be levied on all payments
for admissions to any entertainment. The said Act came to be
amended in extenso in the year 1984 by Maharashtra Act No. XI of
1984 which substituted the definition of “entertainment” by amending
Section 2(A) of the Bombay Entertainment Duty Act. By the said
amendment, the Explanation was added to Section 2(a) which stated
that exhibition would include any exhibition by cinematograph
including video exhibition and further exhibition with the expression
‘game’ would include video game played with the aid of machines
which is operated electronically, mechanically or otherwise. Section 2
(d) defines admission to an entertainment include to admissions to
any place in which entertainment is held. The said Act was further
amended by Maharashtra Act No. III of 1987 with effect from
::: Downloaded on – 09/06/2013 13:39:49 :::
6
01.01.1987 by which Section 3(1) (a) was added which sought to levy
duty in the case of video game as well. Section 2 (f) was amended by
the said Act which defines entertainment duty or a duty in respect of
any entertainment to mean a duty levied under sub-section (1) of 1(a)
of Section 3.
6. Section 3 is the charging section which authorizes the
State Government to levy and recover a duty on all payments for
admission to any entertainment. Section 3-AA authorizes the State
Government to impose a charge on the entertainment duty.
7. In exercise of the powers conferred by Clause (1) of
Articles 213 of the Constitution of India the Governor of Maharashtra
was pleased to promulgate an ordinance, called as “the Bombay
Entertainment Duty (Amendment) Ordinance, 1992” on the 25th of
December 1992 (for short “the amended Act”). The said ordinance
amended Section 2 of the Bombay Entertainment Duty Act to Act No.1
of 1923 by inserting Clause (a-1) and (a-2) to section 2. Section
::: Downloaded on – 09/06/2013 13:39:49 :::
7
(a-2), which came to be inserted to section 1, defines “antenna to
mean any apparatus which receives television signals which enables
viewers to tune into transmissions including national or international
satellite transmissions and is enacted or installed for various exhibition
on payment by the connection holder of any contribution or
subscription or installations and connection charges or any other
charges collected in any manner whatsoever. The said ordinance
further inserted after clause (a), clause (aa) which defines cable
television to mean a system organised on payment by connection
holder of any contribution or subscription or installation/connection
charges or any other charges collected in any manner whatsoever for
exhibition of films or movie pictures. Section 3 which is the charging
section is also sought to be amened by the ordinance, by which an
exhibition by means of any type of antenna or cable television as
defined is taxed by imposing of entertainment duty pro rata the
payment for admission fees by the proprietor. There is also a circular
issued by the State Government dated 04.02.1993 which issues the
guidelines for the implemented of the said ordinance.
::: Downloaded on – 09/06/2013 13:39:49 :::
8
8. The petitioner probably, in view of the Amended Act,
received a communication dated 07.05.1993 from the Collector,
Chandrapur, whereby a certain information regarding the Antenna
was sought from the petitioner. That was not a show cause notice of
any kind under the Act. The petitioner in reference to the same,
provided the information as under:-
"1. Total connection installed ...1880 Nos.
2.
Total expenditure ...Rs. 25 Lacs.
3. Monthly/Quarterly/Yearly
contribution ...Nil for the
entertainment of Paper Mills
employees on free cost.
4. Whether expenses borne by
Company. ...As per Sl.No. 2.
5. Connection provided outside ...Nil."
9. The respondents, in spite of the above clarification,
passed the impugned order and demanded the tax and surcharge and
also threatened to seize and forfeit the said Dish Antenna, if the
petitioner failed to pay the amount and also to initiate prosecution
under the Act. The petitioner, therefore, requested the Additional
::: Downloaded on – 09/06/2013 13:39:49 :::
9
District Magistrate, Chandrapur to cancel the said demand by
explaining their position and resisted the reasoning for the said
demand and, therefore, ultimately filed the present petition.
10. The said Amended Act/Ordinance of 1992 is now Act
No. X of 1993.
The relevant provisions of the Act are as under:-
Section 2(a-2) “antenna” means an apparatus which
receives television signals which enable viewers to tune
into transmissions including national or international
satellite transmissions and is erected or installed for
exhibition of films or moving pictures or series of
pictures, by means of transmission of television signals
by wire where subscribers’ television sets at the residential
or non-residential place are linked by metallic coaxial
cable or optic-fibre cable to a central system called the
head-end, on payment by the connection holder of any
contribution or subscription or installation and
connection charges or any other charges collected in any
manner whatsoever;
Section 2[(a) “entertainment” includes any exhibition,
::: Downloaded on – 09/06/2013 13:39:49 :::
10
performance, amusement, game or sport to which
persons are admitted for payment, [or, in the case of
television exhibition with the aid of any type of antenna
with a cable network attached to it or cable television [or
Direct-to-Home (DTH) Broadcasting Service], for which
persons are required to make payment by way of
contribution or subscription or installation and
connection charges or any other charges collected in any
manner whatsoever] [but does not include magic show]
[and temporary amusement including games and rides,]
Explanation- For the purposes of this clause,-
[(i) the expression “exhibition” includes any
exhibition by cinematograph including video exhibition
or television exhibition with the aid of any type of
antenna with a cable network attached to it or cable
television;]
Section 2[(b) “payment for admission” [in relation
to the levy of entertainments duty, includes-
(i) to (v) —–
(vi) any payment made by a person by way of
contribution or subscription or installation connection
::: Downloaded on – 09/06/2013 13:39:49 :::
11
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
cable television.
(vii) any payment made by a person to the
proprietor of a Direct-to-Home (DTH) Broadcasting
service by way of contribution, subscription , installation
or connection charges, or any other charges collected in
any manner whatsoever for Direct-to-Home (DTH)
Broadcasting service with the aid of any type of set top
box or any other instrument of like nature which
connects television set at a residential or non-residential
place of connection-holder directly to the Satellite; [and]
Section 2 [(c) “proprietor”, in relation to an
entertainment, includes any person-
(i) to (iv) —–
(v) responsible for, or for the time being in charge
of, management of providing cable connections from any
type of antenna or cable television,]
Section 2 (d) “admission to an entertainment”,
includes admission to any place in which the
::: Downloaded on – 09/06/2013 13:39:49 :::
12
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]]
Section 2 (f) “entertainment duty”, or “duty” in
respect of any entertainment means the entertainment
duty levied under section 3;
Section 3. Duty on payments for admission to
entertainment.- (1) There shall be levied an 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, Gocarting,
dance bar, discotheque, amusement park, water sports
activity, pool game] [or tourist bus with video facility] a
duty (hereinafter referred to as “entertainment duty”) at
the following rates, namely:-
(Present amended Sections)
emphasis added.
::: Downloaded on – 09/06/2013 13:39:49 :::
13
Section 3 [(4).
Notwithstanding anything contained in sub-section (2) or
in any other provisions of this Act, there shall be levied,and paid by the proprietor to the State Government, the
entertainments duty at 25 per cent of the total paymentmade by a person or a body of persons, by whatsoever
name called, by way of contribution or subscription or
installation and connection charges or any other chargescollected in any manner whatsoever, to the proprietor for
the exhibition of films or moving pictures or series of
pictures by means of any type of antenna or cabletelevision.”
(The amended section by Ordinance XVI of 1992
dated 25/12/1992)
emphasis added.
11. There is no dispute that the petitioner has
incurred/spent about Rs. 25,00,000/- in installing the Antenna and
the connections for their employees. No charge, whatsoever, is taken
and/or collected at the time of installation and/or thereafter, of
whatsoever nature. There is nothing to justify that the petitioner, at
::: Downloaded on – 09/06/2013 13:39:49 :::
14
the relevant time, collected any contribution or subscription or any
charges from their employees, to whom they had provided connection.
The Act, including the Amended Act, provides that the levy is on the
subscription and/or collection received from the connection holders by
the connection provider to the extent of 25% of the amount. The levy
is only on the receipt of the connection/subscription and any such
charges by the proprietor. Admittedly, no connection charges or any
amount whatsoever was received by the petitioner/the proprietor from
the connection holders, who were its employee. Therefore, considering
the whole scheme of the Act and the guidelines so issued, we are of
the view that the levy, as imposed in the present case, on the total
project cost of Rs. 25,00,000/-, in the facts and circumstances, is
contrary to the Act and it is impermissible. It is contrary even to the
directives issued by the State Government. The levy of 25% on the
project cost is impermissible and not within the scope of the amended
Act. The provisions as referred to above, nowhere permit the
respondents to charge or levy such taxes for such connections, which
are provided free of costs and/or without collecting any subsequent
::: Downloaded on – 09/06/2013 13:39:49 :::
15
and/or contribution at the relevant time. The entertainment duty as
contemplated is basically, in such circumstances, need to be on the
charges/subscription collected by the connection provider.
12. The point in the present facts and circumstances is;
whether the tax on such entertainments still can be imposed on the
provider or receiver as explained by the Division Bench of this Court in
Vasant Madhav
Patwardhan and another ..vs.. State of
Maharashtra and others; 2001 (1) Mh. L. J. 382 in following
words:-
“27. The next point to be noticed is that it is a well
settled principle of law that a tax on entertainment can
be imposed by the Legislature on the person providing
entertainment, as indeed on the person receivingentertainment. In other words, there is no reason to
preclude the legislature from imposing the tax on the
person who provides entertainment. Those who receivedentertainment are exigible to tax. Those who provide it
are similarly not immune to the taxing net.
::: Downloaded on – 09/06/2013 13:39:49 :::
16
13. From the above, it is clear that the installation and
providing transmissions through national or international satellite for
exhibition and/or films or moving pictures of series of pictures as
defined above and exhibition with the aid of any type of antenna with
a cable network attached to it or cable television falls within the
meaning of “antenna”, “entertainment” and “cable television”. The
petitioner is a proprietor, being incharge of management of providing
cable connections from any type of antenna or television being a
person who contributed of its own and incurred expenses for erecting/
installing the said antenna/cable television. The petitioner is
providing connections, cable and televisions for such entertainments to
their employees, who are receivers of such transmissions. The
petitioner can be termed as proprietor/connection provider and the
employees as receiver/connection holder.
14. However, still the important facet, based on facts and
the law at the relevant time, is that the petitioner Company had
installed/erected the said antenna and cable television and provided
::: Downloaded on – 09/06/2013 13:39:49 :::
17
entertainments to their employees free of costs. There is nothing on
record to suggest that the petitioner was providing entertainment on
payment either by way of contribution or subscription or installment
and connected charges and/or any other charges collected in any
manner whatsoever as required within the meaning of antenna,
entertainment, though it provided these facilities of entertainments,
which are viewed and heard on the television receiving set at
residential places of the employees of the petitioner. There is nothing
that the petitioner/so called service provider and/or proprietor
collected any payment by and from the persons, to whom they were
providing the services at residential place of the employee. There is
further no merit that any payment was made by the employees, who
having been permitted to use these cable television facilities for their
entertainment includes the expenses incurred by the employer/
petitioner. There is no material whatsoever on record that any
payment was made by such employees to the employer by providing
service by way of contribution, subscription, installation or connection
charges and/or charges collected in any manner whatsoever though
::: Downloaded on – 09/06/2013 13:39:49 :::
18
they have provided through antenna and cable television all facilities,
which connect television sets at residential place, through satellite or
such other system even before or after any payment of tax.
15. Even as per Section 3 (4) of the amended Act, a charging
section, the basic requirement is that there shall be levied and paid to
the State Government entertainments duty on all payments for
admission. The amount so borne, as per the scheme of the Act, is on
entertainments duty out of gross value of the ticket or payment for
admission fixed by the proprietor. As noted, they have levied
entertainment tax on the expenses incurred by the petitioner for
erection of antenna and other apparatus for securing transmission
through the cable network of cable television attached to it for
workers. The expenses so incurred by the petitioner-company at the
relevant time at the residential complex of its employees does not fall
within the meaning of payment for admission and expenses at the
relevant time. We are concerned with the provisions and position on
the date of the Ordinance i.e. Ordinance No. XII of 1992. We have
::: Downloaded on – 09/06/2013 13:39:49 :::
19
also noted that the demand was made by the respondents based upon
the Ordinance No. XII of 1992. At that time, the explanation, which is
added now by Act 20 of 1998 was not available except a circular and
demand as made, which was contrary to then existing scheme of the
amended Act. Therefore, in October-1992 when the expenditure
incurred by the petitioner, there was no provision/no ordinance,
which would have permitted the respondents to levy such tax of 25%
on the actual expenses incurred, as claimed.
16. In view of the facts as referred to above, the contention
that petitioner had installed Antenna and incurred Rs.25,00,000/- and
provided connection for its employees, whether free of costs or
without collecting any subscription, as they provide entertainment
through this antenna the petitioner is liable for entertainment duty is
impermissible. Further, respondent No. 1, who suffered loss of
entertainment duty, revenue and it affected the running cinema
industry and/or loss to the revenue and as it would set back to the
::: Downloaded on – 09/06/2013 13:39:49 :::
20
regular cinema shows casing loss on entertainment duty to the
Government is also impermissible.
17. The Cable Antenna television connection provides in the
premises round the clock and provide entertainment to the connection
holder and its family and, therefore, the respondents are entitled to
collect said tax, have no basis.
18. By the present petition, the challenge is also made to the
Constitutional validity of the Act in view of the said demand made by
the respondents. However, in view of the above and as we are of the
view that the demand so made is apparently illegal and beyond the
scope, therefore, there is no question of deciding the Constitutional
validity. It is rightly not pressed also.
In view of above, the submission that the alternate
remedy is available under Section 10 of the Act, in the facts and
circumstances, is also rejected.
::: Downloaded on – 09/06/2013 13:39:49 :::
21
19. Admittedly, the expenses were incurred some time in
June-1992. Cable networking commenced in October-1992. The
Ordinance came into force on 25.12.1992 and that later on converted
into law in the year 1993. Therefore, on the date of the said
installation, the Ordinance/Act in question was not in existence. The
taxing statutes are normally prospectives unless it is expressly stated to
be retrospective. In C.I.T., Bombay ..vs.. M/s Gwalior Rayon Silk
Manufacturing Co. Ltd. (1992) 3 Supreme Court Cases 326, the
Supreme Court has observed as under:-
“All statutes including a taxing statute, should always be
read as prospective unless it is expressly stated to be
retrospective.”
20. The taxes cannot be imposed/levied on presumptions
and assumptions. In Canadian Eagle Oil Company vs. Per Viscount
Simon LC; 1945 Vol. II All England Law Reports 499 it is quoted as
under:-
::: Downloaded on – 09/06/2013 13:39:49 :::
22
“In a taxing Act, one has to look as to what is clearly
said. There is no room for any intendment. There is no
equity about a tax. There is no presumption as to tax.
Nothing is to be read in, nothing is to be implied. One
can only look fairly at the language used.”
No taxes can be collected by the respondents without
authority of law.
A taxing statute must be construed strictly; [Sneh
Enterprises ..vs.. Commissioner of Customs [2006] 7 SCC 714];
[Manish Maheshwari ..vs.. Asst. Commissioner of Income-Tax and
another; [2007] 289 ITR 341 (sc). In the present case, as section is
clear, there is no case of any interpretation or construction. As the law
is clear and explicit, the demand of respondents is without authority of
law as the provisions of amended Act nowhere permit the respondents
to collect such tax/duty from the petitioner on the amount of expenses
incurred by them as done in the present case.
In totality, we are inclined to quash and set aside the
impugned order/notice dated 14.09.1993.
::: Downloaded on – 09/06/2013 13:39:49 :::
23
21. In the result, Writ Petition No. 2868 of 1993 is allowed.
The impugned order dated 14.09.1993 issued by respondent no. 3 is
quashed and set aside. No order as to costs.
22. In Writ Petition No. 2729 of 1993, The petitioner is a
Government of India undertaking and earlier it was known as National
Thermal Power Corporation of India Ltd. The petitioner is having a
400 K.V. Sub-Station at Bhadravati in Chandrapur District and a
residential colony for its employees in the same complex. It had
installed a Cable T.V. Net work and provided connections to its
employees without any charge. No outsider is permitted to use the
said system. Respondent No. 2 demanded information regarding the
Cable Network System. Reply given by the petitioner. An order
passed by respondent No. 2 directing the petitioner to pay amount
towards entertainments duty and surcharge.
::: Downloaded on – 09/06/2013 13:39:49 :::
24
23. In this case also, the impugned demand notice dated
14.09.1993 was issued, demanding 25% tax on the total expenses
incurred by the petitioner. The petitioner has specifically averred and
pointed out that before passing of the impugned order this facility is
provided to its employees as welfare measure at no costs and no
charge whatsoever recovered and received by the petitioner at any
point of time.
Therefore, the entertainments duty at 25% and
surcharge at 10% on total costs incurred by the petitioner/Corporation
for installation of cable television network is impermissible and
beyond the newly added Section 3 (4) of the amended Act as
discussed above. There was no question of even filing the returns as
admissible under Section 4(b) of the Act for assessment of the
entertainments duty. Therefore, the impugned order dated
14.09.1993, under section 3(4) and 3 (aa) of the amended Act is
contrary to the law and, therefore, liable to be quashed and set aside
and it is liable to be quashed and set aside.
::: Downloaded on – 09/06/2013 13:39:49 :::
25
24. In the result, Writ Petition No. 2729 of 1993 is also
allowed. Order dated 14.09.1993 passed in C. R. No. 273/ENT/1993-
94 of Bhadravati of respondent No. 2 is quashed and set aside. No
order as to costs.
JUDGE JUDGE
kahale
::: Downloaded on - 09/06/2013 13:39:49 :::