2008 (12) TMI 685 - HC - VAT and Sales Tax

Liability to pay entertainment duty in respect of the cable television network in the premises of the hospital - Held that - The provision of television exhibition by means of cable television network in the hospital constitutes entertainment as defined under section 2(a). Having observed that the activity of exhibition on television by means of a cable network amounts to entertainment we see no reason why petitioner No. 1 ought not be treated as a proprietor in relation to it. It is obvious that the petitioners are responsible for management of the entertainment and in any case are connected to some degree with the organisation of entertainment and are charged with and are responsible for or for the time being are in-charge of the management of entertainment as contemplated by clauses (i) to (iv) of sub-section (c) of section 2. We therefore reject this contention. Appeal dismissed.

Summary

Issues:
1. Liability to pay entertainment duty for cable television network in hospital premises.

Analysis:
The petitioners, a public charitable trust running a hospital, challenged the liability to pay entertainment duty for cable television network in the hospital premises. The District Collector raised a demand for entertainment duty based on a survey, which was confirmed through subsequent orders. The petitioners argued that they should not pay entertainment duty as they do not collect any fees from patients or visitors for viewing the television sets. However, the authorities held that the petitioners are liable to pay entertainment tax on 150 connections in the hospital.

The main question was whether the provision of television exhibition by means of a cable television network in the hospital constitutes "entertainment" as defined under the Act. The Act defines "entertainment" to include any exhibition for which persons are required to make payment. The court noted that even though the hospital did not charge separately for viewing television, the charges were included in the room fees paid by patients. Therefore, the court concluded that the provision of television exhibition in the hospital falls under the definition of "entertainment" as per the Act.

Another contention raised was whether petitioner No. 1 could be considered a "proprietor" in relation to the entertainment as defined in the Act. The Act defines "proprietor" to include persons responsible for the management or organization of entertainment. The court found that the petitioners were responsible for the management of the entertainment and connected to its organization, thus rejecting the contention that petitioner No. 1 is not a proprietor in relation to the entertainment.

In conclusion, the court dismissed the petition, stating that there was no merit in the arguments presented by the petitioners. The court upheld the liability of the petitioners to pay entertainment duty for the cable television network in the hospital premises.