1952 (3) TMI 30 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of the phrase "some duty to perform in connection with the entertainment" under Section 4 of the U.P. Entertainment and Betting Tax Act.

In this case, the accused proprietors of a cinema-house were prosecuted for admitting thirteen individuals without paying the entertainment tax, as required by the U.P. Entertainment and Betting Tax Act. The trial court found the accused liable for the penalty under Section 5(3) of the Act. The accused contended that the individuals were exempt from the tax as they were board-boys and band-men performing duties in connection with the entertainment. The Sessions Judge upheld the trial court's decision, interpreting the phrase "some duty to perform in connection with the entertainment" broadly to include duties performed both inside and outside the entertainment venue. However, the High Court disagreed with this interpretation, emphasizing that the exemption under Section 4 of the Act applies only to individuals performing duties inside the place of entertainment. The Court clarified that individuals engaged for publicity purposes, such as band-men and board-boys, do not qualify for the exemption and are liable to pay the entertainment tax if admitted without tickets.

Moreover, the High Court highlighted that the exemption from entertainment tax under Section 4(1) of the Act is limited to individuals with duties to perform inside the entertainment venue. The Court differentiated between individuals performing duties inside the venue, who are exempt, and those engaged for tasks outside the venue, who do not qualify for the exemption. The judgment emphasized that individuals admitted free of charge, even if employed for promotional activities, are still required to pay the entertainment tax if found inside the venue without tickets. The Court rejected the Sessions Judge's broad interpretation of the phrase "some duty to perform in connection with the entertainment," emphasizing that the exemption only pertains to duties performed inside the entertainment venue.

Additionally, the High Court addressed the scenario where multiple partners are involved in managing a cinema. The judgment clarified that partners not actively performing duties during the entertainment are still considered exempt from the tax if they have managerial responsibilities. The Court also discussed the situation of board-boys engaged without wages but offered free shows in return for their services. The judgment underscored that such board-boys, if admitted to the entertainment venue, are liable to pay the tax under Section 3(2) of the Act. Ultimately, the High Court upheld the conviction of the accused proprietors, rejecting the interpretation of the Sessions Judge and affirming that the accused were rightly convicted and sentenced for violating the provisions of the U.P. Entertainment and Betting Tax Act.

Therefore, the High Court dismissed the reference made by the Sessions Judge, affirming the conviction of the accused proprietors and emphasizing the strict application of the provisions of the U.P. Entertainment and Betting Tax Act regarding the payment of entertainment tax for individuals admitted to entertainment venues without proper tickets.