PETITIONER:
MARKAND SAROOP AGGARWAL AND ORS.
Vs.
RESPONDENT:
M. M. BAJAJ AND ANR.
DATE OF JUDGMENT15/09/1978
BENCH:
KAILASAM, P.S.
BENCH:
KAILASAM, P.S.
SINGH, JASWANT
CITATION:
1979 AIR 110 1979 SCR (1) 784
1979 SCC (1) 116
ACT:
Admission charges 'on per head' basis to the nightly
dinner-cum-cabaret programmes, whether liable to
entertainment tax-United Provinces Entertainment and Betting
Tax, 1937 (as extended to Delhi) Sections 2(1)(c), 3(1)(3),
4(1) and 5(3).
HEADNOTE:
The appellants are five partners of Lido Restaurant,
New Delhi and they charged 'on per head' basis in the
nightly dinner-cum-cabaret programmes. A complaint was filed
by the Entertainment Tax Inspector on behalf of the State,
against them on the ground that they had contravened the
provisions of Section 4(1) and with Section 3(1) and Section
3(3) of the U.P. Entertainment and Betting Tax Act, 1937 as
extended to Delhi and punishable under Section 5(3) of the
Act. The Trial Court acquitted the accused on the ground
that no offence against them had been established. On
appeal, the High Court found them guilty of the offences
with which they were charged, allowed the appeal, set aside
the order of acquittal and imposed a fine of Rs. 40/- each
on the five partners of the Lido Restaurant directing that
the fines be paid in addition to the tax leviable under
Section 3 of the Act.
Dismissing the appeal by special leave, the Court
^
HELD : 1. The United Provinces Entertainment and
Betting Taxes Act, 1937 (as extended to Delhi) is wider in
scope and in application. The definition of 'admission to an
entertainment' in S. 2(1) and 'payment for admission' in
Section 2(6) and used in Section 3(1) are widened so as to
embrace payment for any purpose whatsoever connected with an
entertainment and admission to place in which the
entertainment is held. [789G-H, 790A]
2. Admission to an entertainment would include
admission to any place in which entertainment is held and
payment for admission would include any payment for any
purpose whatsoever connected with an entertainment which a
person is required to make as a condition of attending or
continue to attend the entertainment. Cabaret show is an
item of entertainment. [787G-H]
3. On the facts of the case it would be an admission to
an entertainment. Though it may be for taking tea or dinner
for a minimum charge, as the admission is to a place where
the entertainment is held, it would come within the
definition under section 2(1). Further, the payment of Rs.
5/- or Rs. 10/- though it is stated to be for the dinner, as
it is connected with an entertainment and as the person is
making the payment as a condition for attending or
continuing to attend the entertainment, it would attract the
definition of payment for admission under section 2(6)(iv)
of the Act. [788G-H, 789A]
Williams v. Wright, [1897] 13 T.L.R. 551, Kitchner v.
Evening Standard Co. Ltd., [1936] 1 K.B. 576 and J. Lyons &
Co. Ltd. v. Fox, [1919] 1 K.B. 11; discussed and quoted with
approval;
785
Attorney General v. London Casing Ltd., [1937] 3 All
E.R. 858; explained and applied.
Attorney General v. Mcleod, [1918] 1 K.B. 13, Attorney
General v. Swan, [1922] 1 K.B. 682, Attorney General Arts
Theatre of London Ltd., [1933] 1 K.B. 439 and Attorney
General v. South port Corporation, [1933] All E.R. 971;
referred to.
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
368 of 1976
Appeal by Special Leave from the Judgment and Order
dated 17-2-1976 of the Delhi High Court in Criminal Appeal
No. 141 of 1971.
Frank Anthony and N. C. Sikri for the Appellant.
S. N. Anand and R. N. Sachthey for Respondent No. 1
The Judgment of the Court was delivered by
KAILASAM, J. This appeal is preferred by the five
partners of Lido Restaurant, Connaught Circus, New Delhi, by
special leave against the Judgment and order of the High
Court of Delhi in Criminal Appeal No. 141 of 1971.
A complaint was filed by the Entertainment Tax
Inspector on behalf of the State in the court of the
Judicial Magistrate, First Class, against the appellants on
the ground that they had contravened the provisions of
section 4(1) read with section 3(1) and section 3(3) of the
U.P. Entertainment and Betting Tax Act, 1977, as extended to
Delhi and punishable under section 5(3) of the Act. The
trial court acquitted the accused on the ground that no
offence against them had been established. On appeal by the
Entertainment Tax Inspector, the High Court found that the
appellants were guilty of the offences with which they were
charged, allowed the appeal, set aside the order of
acquittal and imposed a fine of Rs. 40/- each on the five
partners of the Lido Restaurant and directed that the fines
be paid in addition to the tax leviable under section 3 of
the Act.
P.W. 3, Bodh Raj, was the entertainment tax inspector
at the material time. On 15th November 1968, under the
instruction of his superior officer, he went along with
Bajaj, P.W.5, inspector, and visited Lido Restaurant,
Connaught Circus, at 10 P.M. and remained in the Restaurant
till 11.15 P.M. Cabaret programme was given in the
restaurant and a band was in attendance. P.W. 3 contacted
the manager and recorded a statement which is Ex. B.1, in
which the manager, V. N. Sood, stated that they were holding
cabaret programme from 5th November 1968 daily and that the
service is effected on an a la carte basis. The minimum
charges for eatables at the time of
786
cabaret are Rs. 5/- at evening tea, and Rs. 10/- at dinner
time from 10 P.M. onwards. According to his statement, there
was no admission charge or fee of any kind. P.W. 3 also
examined cash memos and found at that time 72 persons were
present in the restaurant for taking dinner. The evidence of
the inspector is that no charges for entry to the restaurant
was collected except a minimum charge of Rs. 5/- for the
evening and Rs. 10/- for the night which was adjustable
towards the food. The Accountant of the restaurant, who was
examined as P.W. 4, explained that they were collecting the
charges for the food consumed by the customer in the
restaurant and no money was being charged for cabaret or any
other type of entertainment. The evidence of P.W. 5, the
inspector, Entertainment Tax, is that a sum of Rs. 10/ were
the minimum charges for the food including band performance.
A sum of Rs. 10/- were charged on per head basis, in the
nightly dinner-cum-cabaret programme.
On the evidence adduced, the trial court found that the
cabaret performance in a restaurant is essentially an item
of entertainment. It also found that Rs. 5/- and Rs. 10/-
were minimum charges for the afternoon tea and dinner. It is
also clear that these amounts were adjusted towards the
eatables that were consumed. It is not the case for
prosecution that the price of eatables were raised for the
purpose of covering the entertainment, but it is seen from
the admission of the manager as well as the evidence on
record that whether a person consumed anything or not, he
had to pay Rs. 5/- for the evening and Rs. 10/- for the
night. If he consumes eatables for more than Rs. 5/- in the
evening and for more than Rs. 10/- in the night, the amount
of Rs. 5/- and Rs. 10/- paid by him would be adjusted. On
these facts, the question arose whether any charges were
collected for the cabaret entertainment. The trial court
came to the conclusion that nothing was charged for cabaret
performance and the minimum charges had only been fixed so
that no undesirable element can get into the restaurant. The
High Court came to a different conclusion and found that the
idea behind the requirement of payment of minimum charge was
to cover the cabaret programme and therefore would attract
entertainment duty payable under the law.
In order to decide the question, the relevant
provisions of the law under which the accused are charged
will be referred to. The United Provinces Act 8 of 1937 was
passed on 22nd October 1937 for the purpose of imposing a
tax on entertainment and other amusements and on certain
forms of betting. Section 3(1) provides that there shall be
levied and paid to the Central Government on all payments
for admission to any entertainment, a tax at the rate
specified in the section.
787
Section 3(3) provides for amounts payable on lump
subscription or contribution or on season ticket and other
matters which would be referred to a little later.
Section 4(1) runs as follows:-
“4.(1) Save as otherwise provided by this Act, no
person, other than a person who has some duty to
perform in connection with the entertainment or a duty
imposed upon him by law, shall be admitted to any
entertainment, except with a ticket stamped with an
impressed embossed, engraved or adhesive stamp (not
before used) issued by the Central Government for the
purposes of revenue and denoting that the proper
entertainments tax payable under section 3 has been
paid.”
The words “payment for admission” in section 3(1) is
defined under section 2(6) as follows:-
“Payment for admission” 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 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; and
(iv) any payment for any purpose whatsoever
connected with an entertainment which a
person is required to make as a condition of
attending or continuing to attend the
entertainment in addition to the payment, if
any, for admission to the entertainment.”
Admission to an entertainment is defined under section 2(1)
as including admission to any place to which the
entertainment is held. Under section 3(1), all payments for
admission to any entertainment is taxable. Admission to an
entertainment would include admission to any place in which
entertainment is held and payment for admission would
include any payment for any purpose whatsoever connected
with an entertainment which a person is required to make as
a condition of attending or continue to attend the
entertainment. It is not in dispute that cabaret show is an
item of entertainment. The only question therefore that
arises for consideration in this case is, whether any
payment
788
for admission to the entertainment is made. The contention
on behalf of the prosecution is that by levying a minimum
charge of Rs. 5/- for the evening and Rs. 10/- for the
night, there is a payment for the entertainment also. It is
the case of the defence that there is no levy for the
entertainment and the minimum fee is levied only for the
purpose of keeping out undesirable elements from getting
into the restaurant. By levying a minimum fee, the customer
is liable to pay the amount whether he consumes any eatable
or not. Two advertisements which were inserted by the
restaurant invited customers for the show. In the issues
dated November 15, 1968 and November 9, 1968, marked as Ex.
‘A’ and ‘C’ of the Hindustan Times, it is stated-
“LIDO
Air-conditioned
RESTAURANT
Opposite
Super Bazar
CABARET
Every day at 7-00 & 10-00 P.M.
(Please take seats by 6-30 & 9-30 P.M.)
*Welcome by Ladies
*Music
*Large Selection in Eatables
*Open till late night
Seat Reservation on Tel. 44110”
The customers are invited for the cabaret to take their
seats by 6.30 and 9.30 P.M. and to listen to music during
which time large selection of eatables would be available.
It is not alleged that any extra rate is charged for the
eatable because of the show but it is not disputed that a
minimum fee is levied, for taking a seat for witnessing the
show and for taking tea or dinner. If the normal rates are
charged for the items consumed and incidentally a show is
put up, it cannot be said that any payment is made for
admission for the entertainment but requiring a minimum of
Rs. 5/- and Rs. 10/- whether the customer consumed any
eatable or not would lead to an irresistible conclusion that
a payment of fee for admission to the entertainment is also
included.
On the facts of the case it would be an admission to an
entertainment. Though it may be for taking tea or dinner for
a minimum charge, as the admission is to a place where the
entertainment is held, it would come within the definition
under section 2(1). Further, the payment of Rs. 5/- or Rs.
10/- though it is stated to be for the dinner, as it is
connected with an entertainment and as the person is making
789
the payment as a condition for attending or continuing to
attend the entertainment, it would attract the definition of
payment for admission under section 2(6) (iv) of the Act. On
the facts therefore we agree with the conclusion arrived at
by the High Court and confirm the convictions passed on the
appellants and reject the appeal. The High Court, in
disposing of the appeal by the Government, though the
Government was not present, dealt with the law elaborately
referring to various English decisions. The learned Counsel
for the appellants, Mr. Frank Anthony, referred to some of
the decisions and we would, before concluding our judgment,
refer to a few of them in brief.
It may be noted that English Law on the subject has its
origin from the Sunday Observance Acts, 1625 to 1780. The
Act, as a general rule, prohibited all public entertainments
of all types on Sundays. Act 1780 provided that “any house,
room or other place which shall be opened or used for public
entertainment or amusement and to which persons shall be
admitted by the payment of money or by tickets sold for
money shall be deemed a disorderly house.”, vide Halsbury
Laws of England. In Williams v. Wright a ticket for a Sunday
concert at the Queen’s Hall was stamped “Admission Free.
Reserved Seat 1s.” On the facts it was held that a charge
was made for a reserved seat and was not incompatible with
the admission being free and hence no offence was committed.
In a subsequent case, Kitchner v. Evening Standard Co. Ltd.,
in connection with an all-in wrestling contest an
advertisement stated-“Prices 4s. 6d., 3s. 6d., 2s. 0d.,
reserved, unreserved 1s. 0d.”, it was held that an offence
was committed as the advertisement made it plain that no one
can get in without payment. The Finance (New Duties) Act,
1916, section 1(1) of the Finance (New Duties) Act, 1916,
reads as follows:-
“There shall, as from the fifteenth day of May,
nineteen hundred and sixteen, be charged, levied and
paid on all payments for admission to any entertainment
as defined by this Act an Excise duty (in this, Act
referred to as ‘entertainments duty’)…”
This sub-section is similar to section 3(1) of the United
Provinces (Entertainment and Betting Tax) Act, 1937, with
which we are concerned. The Acts with which we are
concerned, have taken into account the subsequent
developments and widened the definition of ‘admission to an
entertainment’ and ‘payment for admission so as to embrace
payment for any purpose whatsoever connected with an
790
entertainment and admission to a place in which the
entertainment is held. In Halsbury’s Laws of England, 3rd
Edn. Vol. 37, page 11, para 19, it is stated that it would
be a levy for entertainment where refreshments are sold for
a higher price than the normal price even though no money is
paid for admission and would be liable for tax. A decision
which was debated at length at the bar is that of a Court of
Appeal in J. Lyons & Co. Ltd. v. Fox. In that case, the
concerts of music were given during and after the service of
tea and dinner. The dinner was permitted to stay for one
hour after the service of dinner had ceased. No charge was
made in any form except for the meals which were served both
at a fixed price and a-la-carte, and for which a bill was
rendered to the customer before he left the restaurant. By a
majority it was held that payments made by the customers to
the restaurant were not payment for admission to
entertainment within the meaning of section 1(1) of the
Finance (New Duties) Act, 1916, and that the entertainment
duty was therefore not chargeable in respect thereof. A
minority judgment took the view that the tea or dinner was
purely incidental to the concert, especially in view of the
finding of the Magistrate that the persons were paying not
merely for the dinner but also for the entertainment which
followed the dinner. Reference was made to Attorney General
v. London Casino Ltd., under the Finance (New Duties) Act,
1916. In this case, food and drinks were supplied, as in an
ordinary restaurant, and patrons were able to dance on the
stage. In addition, an elaborate revue was performed at the
stage. Patrons were allotted tables as in an ordinary
restaurant and there was a fixed menu each night, but dishes
could be ordered a-la-carte. A minimum charge of 15s. 6d.
was made, payment being made before leaving. The Court
distinguishing the case in J. Lyons & Co. Ltd. v. Fox
(supra) held that no doubt could be entertained that people
paid 15s. 6d. because they can have a good dinner in
pleasant surroundings and that they paid it and to a
substantial extent paid it because they will, in addition to
the dinner, be able to see an extremely good and interesting
and lively entertainment. The Court holding, “whatever the
result may be, I cannot bring myself to doubt that the
normal person paying 15s. 6d. pays not only for the dinner
but also for the right to dance to a band, and to a
substantial extent also pays it because he desires to see
that is a good and elaborate and expensively produced show.”
The facts of the case in the London Casino’s case (supra) is
similar to the facts of our case. In the case before us, a
minimum is fixed and we have no doubt, a part of which is a
payment for admis-
791
sion to the entertainment. Other decisions referred to were
Attorney General v. Mcleod, Attorney General v. Swam,
Attorney General Arts Theatre of London Ltd. and Attorney
General v. Southport Corporation. We feel it is unnecessary
to burden our judgment with the various decisions referred
to in detail by the High Court for they are not applicable
as the Act with which we are dealing is wider in its scope
and application. In the circumstances we confirm the
conviction and sentence imposed by the High Court and its
direction regarding levy of the tax and dismiss the appeal.
S.R. Appeal dismissed.
792