1988 (7) TMI 385 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to insertion of sub-section (1-A) in section 3 of the Punjab Entertainment Duty Act, 1955 invoking Article 14 of the Constitution of India.

Analysis:
The petitioners, cinema owners and an association of cinema owners in Punjab, challenged the insertion of sub-section (1-A) in section 3 of the Punjab Entertainment Duty Act, 1955, effective from April 1, 1986, on grounds of violating Article 14 of the Constitution of India. Section 3 of the Act pertains to the charging of duty on payments for admission to entertainments, with the term "entertainment" being defined broadly to include various forms of public amusement. The duty is charged per capita on the sale of tickets for cinema shows arranged by cinema owners. The introduction of sub-section (1-A) allowed for the levy of lump sum entertainment duty on the replay of video tapes, video cassettes, or video records through specific devices, attracting a different duty structure from traditional cinema shows.

The Court referred to a previous judgment where it was established that the exhibition of motion pictures through devices like V.C.Rs. and T.V. sets falls within the definition of "entertainment" under the Act. The State of Punjab imposed the impugned legislation to tax exhibitors showcasing films through V.C.Rs. and similar mediums. The Court noted the distinction between the entertainment duty payable per capita for cinema shows under section 3(1) and the duty per stirpes under section 3(1-A) for video tape exhibitions. The petitioners argued against this distinction, claiming it violated Article 14 by creating differential treatment for similar forms of entertainment.

The Court rejected the petitioners' argument, emphasizing that the State has the authority to levy taxes to maintain revenue streams. It held that classifying video tape exhibitions separately for the purpose of imposing entertainment duty did not infringe Article 14. The judgment highlighted that if different forms of entertainment, offered through distinct methods and mediums, attract varied duty structures, it does not amount to discrimination under Article 14. The Court also noted a previous ruling that both cinemas and video tape exhibitions were considered cinematographs under the Cinematograph Act, but this did not impact the current issue. Ultimately, finding no merit in the petition, the Court dismissed it summarily.

In conclusion, the Court upheld the validity of the sub-section (1-A) insertion in the Punjab Entertainment Duty Act, 1955, allowing for the levy of lump sum entertainment duty on video tape exhibitions without contravening Article 14 of the Constitution of India.