1960 (12) TMI 87 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether entertainments duty is exigible under the Central Provinces and Berar Entertainments Duty Act, 1936.
2. Whether the display by mannequins constitutes an "entertainment" under the Act.
3. Whether the token price of Rs. 2/- for admission to the Dome constitutes "payment for admission to entertainment."

Issue-wise Detailed Analysis:

1. Exigibility of Entertainments Duty:
The primary question in this petition under Article 226 of the Constitution of India is whether entertainments duty is exigible from the petitioners under the Central Provinces and Berar Entertainments Duty Act, 1936. The petitioners, engaged in the manufacture and sale of textiles, set up a "Calicloth Dome" for displaying and selling their goods. Admission to the Dome was free in the morning but restricted in the evening, requiring a Rs. 2/- token, which could be adjusted against purchases. The District Excise Officer directed the petitioners to affix duty stamps on the tokens, considering them as admission fees. The petitioners contested this, arguing that their display was not an "entertainment" under Section 2(b) of the Act and that the token was not a payment for admission to entertainment.

2. Definition and Scope of "Entertainment":
The liability of the petitioners for the payment of entertainments duty hinges on the construction of the Act, particularly Section 3(1). The definitions provided in Section 2 of the Act for "entertainment," "payment for admission," and "admission to an entertainment" are inclusive and not exhaustive. The term "entertainment" naturally connotes amusement or gratification. The Act, intended to levy duty on admissions to theaters, cinemas, and public entertainments, implies that an "entertainment" must afford amusement or gratification to those who see or hear it.

In this case, the display by mannequins was argued by the respondents to be an attraction and an organized show during evening hours. However, the court found that the primary object of the Dome was to advertise and promote sales of the fabrics, not to provide organized entertainment. The mannequins' display was for enabling buyers to make selections, not for amusement. The court concluded that the Dome was not a place of entertainment as defined by the Act.

3. Payment for Admission to Entertainment:
The petitioners argued that the Rs. 2/- token was an advance payment towards the purchase of cloth, not an admission fee. The court examined whether the token constituted "payment for admission" to entertainment. It found that the token was not a charge for admission but a method to regulate trade and restrict entry to bona fide purchasers. The court noted that a visitor paying for cloth in a shop is not considered to be paying for admission to the shop. Similarly, the token was deemed an advance payment for purchases, not an admission fee.

The court referred to English case law, particularly Lyons and Co. v. Fox, which held that payments for meals in a restaurant providing entertainment were not "payments for admission" to entertainment. Applying this principle, the court concluded that the token obtained by visitors to the Dome was not a payment for admission to entertainment.

Conclusion:
The court concluded that the Calico Dome was not a place of entertainment under the Act, and no entertainments duty was payable by the petitioners. The petition was allowed, quashing the order of the District Excise Officer and restraining the enforcement of the Act against the petitioners. The petitioners were entitled to a refund of the duty already collected, and costs were awarded.