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Issues:
Validity of Sections 3 and 4 of the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972. Analysis: 1. The appeal challenges the validity of Sections 3 and 4 of the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972. Section 3 imposes an entertainment tax on individuals entering places with luxury where entertainment is provided. Section 4 imposes a luxury tax on hotel and restaurant proprietors providing luxury facilities. The definitions of entertainment and luxury are crucial for understanding the scope of the Act. 2. The High Court upheld the validity of both sections. The single Judge relied on a previous case, Spences Hotel Pvt. Ltd. v. State of West Bengal, while the Division Bench dismissed the appeal based on OmPrakash v. State of West Bengal. The Constitution Bench affirmed the validity of Section 4, emphasizing that the tax is on the provision of luxury, not its utilization. The Court held that the taxable event need not be the actual consumption of luxury, but its potential availability to consumers. 3. Regarding Section 3, the Court found no difficulty in upholding its validity. The argument that the taxable event is the service rendered, not entertainment, was dismissed. The Court emphasized that the provision ensures certainty in taxation matters. 4. In conclusion, the appeal challenging the validity of Sections 3 and 4 of the Act was dismissed. The Court ruled that the provisions are constitutionally sound. No costs were awarded in the case.
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