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2014 (8) TMI 1048 - HC - VAT and Sales TaxLiability of Entertainment tax in view of amendment in the Rajasthan Entertainments and Advertisements Tax Act, 1957 by the Rajasthan Finance Act, 2008 - Section 3(4A), 4AAA ibid - Petitioner providing direct-to-home (DTH) broadcasting services all over India including the State of Rajasthan contended that the respondent-State cannot levy entertainment tax as DTH broadcasting services specifically covered under List I, Schedule VII (entry 92C) by virtue of discipline of article 246(1) of the Constitution of India and it cannot be again taxed under any taxing entry under List II of Schedule VII (entry 62) just by artificially enlarging the scope of the entry under List II. The definition of entertainment remains un-amended, however the charging section states that the entertainment tax is on DTH broadcasting service - Held that - the amendment in the Rajasthan Entertainments and Advertisements Tax Act, 1957 by the Rajasthan Finance Act, 2008 was introduced from February 25, 2008 under the aforesaid Acts/Rules and by this amendment direct-to-home (DTH) service was brought in the ambit of entertainment tax and to pay entertainment tax. Therefore, after considering the decision of Hon ble Apex Court in the case of State of West Bengal and others Versus Purvi Communication P. Ltd. and others 2005 (3) TMI 438 - SUPREME COURT OF INDIA upheld legislative competence of the State Legislature to levy entertainment tax on all payments for admission to an entertainment through direct-to-home (DTH) as contemplated under the relevant section 7 of the Delhi Entertainments and Betting Tax Act, 1996, the petitioner is liable to pay entertainment tax. - Decided against the petitioner
Issues Involved:
1. Levy of entertainment tax on Direct-to-Home (DTH) broadcasting services. 2. Legislative competence of the State to impose entertainment tax on DTH services. 3. Validity of amendments to the Rajasthan Entertainments and Advertisements Tax Act, 1957. Issue-Wise Detailed Analysis: 1. Levy of Entertainment Tax on DTH Broadcasting Services: The petitioner, a limited company providing DTH services, challenged the order dated May 28, 2010, which held them liable for entertainment tax under sections 3(4A) and 4AAA of the Rajasthan Entertainments and Advertisements Tax Act, 1957, and rules 18BBBB and 18BBBBB of the Rajasthan Entertainments and Advertisements Tax Rules, 1957. The petitioner argued that DTH services fall under List I, Schedule VII (entry 92C) of the Constitution of India and cannot be taxed under List II (entry 62). The respondents countered by citing judgments from the Supreme Court and various High Courts upholding similar levies. 2. Legislative Competence of the State to Impose Entertainment Tax on DTH Services: The respondents relied on the Supreme Court's judgment in the case of State of West Bengal v. Purvi Communication P. Ltd., which upheld the legislative competence of the State to levy entertainment tax on cable operators. The Punjab and Haryana High Court in Tata Sky Limited v. State of Punjab, and the Jharkhand High Court in Bharti Telemedia Limited v. State of Jharkhand, among others, also upheld the State's competence to levy such taxes. The courts held that the levy of entertainment tax falls under entry 62 of List II and does not infringe on the Central Government's jurisdiction under entry 92C of List I. 3. Validity of Amendments to the Rajasthan Entertainments and Advertisements Tax Act, 1957: The amendments introduced on February 25, 2008, brought DTH services within the ambit of entertainment tax. The petitioner argued that this amendment was unconstitutional. However, the courts consistently upheld the validity of such amendments, stating that the State Legislature is competent to levy entertainment tax on DTH services. The Supreme Court in Purvi Communication P. Ltd. clarified that the State Legislature can tax entertainments, which includes DTH services, under entry 62 of List II. The Punjab and Haryana High Court, Jharkhand High Court, and Delhi High Court upheld similar amendments in their respective states, reinforcing the State's power to impose such taxes. Conclusion: The Rajasthan High Court dismissed the writ petitions, affirming that the levy of entertainment tax on DTH services is within the legislative competence of the State. The court relied on precedents set by the Supreme Court and various High Courts, which upheld similar levies and amendments, confirming that such taxes do not infringe on the Central Government's jurisdiction. The court found no merit in the petitions and upheld the validity of the amendments to the Rajasthan Entertainments and Advertisements Tax Act, 1957.
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