2012 (2) TMI 466 - HC - Indian Laws

Summary

Issues Involved:
1. Whether entertainment tax is payable on the amount paid by a person for carrying his mobile phone inside the Delhi Race Club u/s 6(1) of the Delhi Entertainments and Betting Tax Act, 1996.
2. Whether the settlement between the petitioner and the entertainment tax authorities precludes the levy of entertainment tax.

Summary:

Issue 1: Entertainment Tax on Mobile Phone Entry Fee
The primary issue in the writ petition was whether entertainment tax is payable on the amount paid for carrying a mobile phone inside the Delhi Race Club u/s 6(1) of the Delhi Entertainments and Betting Tax Act, 1996. The petitioner, Delhi Race Club (1940) Ltd., levied a separate charge for carrying mobile phones inside the premises as a regulatory measure. The entertainment tax authorities issued a notice demanding entertainment tax at 25% on these charges. The petitioner contended that mobile phones did not fall under the category of entertainment and thus, the levy was unauthorized by the Act. However, the court held that u/s 2(m)(iv) of the Act, any payment connected with entertainment, which a person is required to make as a condition of attending the entertainment, attracts entertainment tax. The court concluded that the payment for carrying mobile phones was connected with the entertainment (horse races) and was a condition for attending the races, thereby satisfying the conditions of sub-clause (iv). Hence, the levy was deemed legal and valid.

Issue 2: Settlement with Tax Authorities
The petitioner argued that a settlement had been reached with the entertainment tax authorities, which should preclude the levy. The court dismissed this contention, stating that there can be no settlement in matters arising under a fiscal statute in the absence of a specific provision in the statute. Additionally, it was noted that there can be no estoppel against the statute, as highlighted in the Supreme Court case Mathra Parshad and Sons v. State of Punjab [1962] 13 STC 180 (SC); AIR 1962 SC 745.

Conclusion:
The court found no merit in the writ petition and dismissed it, upholding the levy of entertainment tax on the charges for carrying mobile phones inside the Delhi Race Club. The court emphasized that the payment for mobile phone entry was connected with the entertainment and was a condition for attending the horse races, thus falling within the scope of u/s 2(m)(iv) read with section 6(1) of the Act.