1996 (11) TMI 458 - SC - Indian Laws

Summary

Issues Involved:
1. Legislative Competence
2. Pre-existing Legislation
3. Violation of Freedom of Speech and Expression
4. Colorable Legislation
5. Violation of Article 14
6. Public vs. Private Entertainment
7. Prohibitive Tax Rate

Summary:

1. Legislative Competence:
The appellants argued that the State Legislature lacked the competence to enact the Amendment Act as the subject matter falls exclusively within the province of Parliament (List 1 of the Seventh Schedule to the Constitution). The court upheld the High Court's decision, agreeing that the State Legislature had the competence to enact the Amendment Act.

2. Pre-existing Legislation:
The appellants contended that the Amendment Act was ineffective since the field was already occupied by the Cable Television Network (Regulation) Ordinance 9 of 1994 and the subsequent enactment made by Parliament. The court found no merit in this argument and upheld the High Court's rejection of this contention.

3. Violation of Freedom of Speech and Expression:
The appellants claimed that the Amendment Act violated their freedom of speech and expression guaranteed by Article 19(1)(a) of the Constitution. They argued that the tax imposed was prohibitive and designed to kill the cable television business. The court held that while providing entertainment is a form of exercise of freedom of speech and expression, the business aspect of it can be taxed. The court cited previous judgments to support the view that taxation is permissible as long as it does not stifle the freedom of expression.

4. Colorable Legislation:
The appellants argued that the Amendment Act was a colorable piece of legislation aimed at benefiting cinema operators. The court found no evidence to support this claim and upheld the High Court's rejection of this contention.

5. Violation of Article 14:
The appellants argued that the Amendment Act violated Article 14 of the Constitution as it did not levy tax on Doordarshan and other establishments providing entertainment through dish antennas. The court held that there is no comparison between Doordarshan, a government organization, and the appellants, who are private entities. The court found no substance in this grievance.

6. Public vs. Private Entertainment:
The appellants contended that the tax was on private enjoyment rather than public entertainment. The court upheld the High Court's decision, agreeing that the nature of the entertainment provided by cable television is akin to that provided by cinema theatres and can be taxed similarly.

7. Prohibitive Tax Rate:
The appellants argued that the tax rate was prohibitive and designed to kill the cable television business. The court found that the tax rate was reasonable and comparable to the tax levied on cinema theatres. The court noted that the rate of taxation had since been reduced to 20 percent and found no flaw in the State's reasoning for imposing the tax.

Conclusion:
The Supreme Court upheld the High Court's decision, rejecting all the contentions raised by the appellants. The appeals and writ petitions were dismissed with no order as to costs.