2014 (9) TMI 228 - HC - VAT and Sales Tax

Levy of entertainment tax - Held that - On a plain reading of section 3 of the Act, it is amply clear that the chargeable event is the admission to an entertainment. Thus, if in the case of individual owners of rides, each ride is considered as a separate entertainment, merely because the owner of all the rides is the same, the charging event would not change. The charge is on admission to an entertainment, thus if each ride constitutes an entertainment, the tax is to be levied accordingly. In the present case there is no dispute that the fee for each ride is less than rupees six. In a given case a person may opt for only one ride, in another a person may opt for any number of rides. Thus, entertainment tax cannot be levied in such a case on the basis of the number of persons who have entered the amusement park. Notification dated September 4, 1992 has been issued by the Government of Gujarat in exercise of powers under section 29(1) of the Act. By virtue of the said notification the classes of entertainment enumerated thereunder are exempted from payment of tax leviable under section 3 of the Act to the extent specified thereunder. - entertainment is in the nature of a ride, each of which is a separate entertainment and is operated by a machine operated by electricity, petrol, diesel or otherwise and admission to each ride is subject to payment of a sum not exceeding ₹ 6 per ticket, hence, the same would squarely fall within the ambit of item No. 3 of the above notification and would be fully exempt from payment of entertainment tax. Accordingly, considering the nature of entertainment provided by the petitioner, mere entry into the amusement park does not provide any kind of amusement to the visitor and, therefore, is not chargeable to entertainment tax. Under the circumstances, it is not permissible for the respondents to take into consideration the amount collected by way of entry fee for the purpose of assessment of entertainment tax under the provisions of the Act. Moreover, for the reasons stated hereinabove, it is not permissible for the respondents to club the price of tickets for each individual ride together for the purpose of computing the entitlement of the petitioner for availing of the benefit of the notification dated September 4, 1992 issued in exercise of powers under section 29(1) of the Act whereby entertainment is exempt from the purview of the Act if the admission rates for such entertainment does not exceed ₹ 6. Rides provided by the petitioner not being rides provided in water parks and holiday resorts are not exigible to entertainment tax. In this regard, it may be noted that the orders impugned in the present case pertain to the period January 17, 1997 to February 16, 1997. Schedule III came to be inserted in the Entertainment Tax Act, vide section 3 of the Gujarat Entertainments Tax (Amendment) Act, 1998 (Gujarat Act No. 8 of 1998) which was brought into force on 1st August, 1998. In the aforesaid premises the provisions of Schedule III not being applicable in respect of the period under consideration, the contention raised by the petitioner does not merit acceptance insofar as the facts of the present case are concerned. For the period after August 1, 1998 the petitioner may agitate the issue if it so deemed fit in an appropriate case. - Decided partly in favour of assessee.

Issues Involved:
1. Exemption from entertainment tax under Section 3A of the Gujarat Entertainments Tax Act.
2. Whether each ride in the amusement park constitutes a separate entertainment.
3. Treatment of bumper tickets as single or multiple entertainments.
4. Validity of the orders passed by the appellate and revisional authorities.

Detailed Analysis:

1. Exemption from Entertainment Tax Under Section 3A of the Act:
The petitioner argued that rides provided in the amusement park fall under the exemption specified in Entry 13 of Schedule III of the Act, which exempts all kinds of sports excluding those in water parks or holiday resorts. However, the court noted that Schedule III was inserted by the Gujarat Entertainments Tax (Amendment) Act, 1998, effective from August 1, 1998. Since the period in question was from January 17, 1997, to February 16, 1997, the provisions of Schedule III were not applicable. Therefore, this contention was not accepted for the period under consideration.

2. Whether Each Ride Constitutes a Separate Entertainment:
The petitioner contended that each ride in the amusement park is a separate entertainment and should not be clubbed together for tax assessment. The court agreed, stating that the chargeable event under Section 3 of the Act is the admission to an entertainment. Since each ride is a separate entertainment and the fee for each ride is less than Rs. 6, the petitioner is entitled to exemption under the notification dated September 4, 1992. The court emphasized that mere entry into the amusement park without enjoying any rides does not constitute entertainment and, therefore, should not be subject to entertainment tax.

3. Treatment of Bumper Tickets:
The petitioner argued that bumper tickets, which offer a discount on multiple rides, should be treated as separate tickets for each ride. However, the court held that bumper tickets, being a combination of several rides at a concessional rate, should be considered as one single ticket for the purpose of entertainment tax. The court clarified that the admission rate for bumper tickets should not include the entry fee, as the entry fee is not charged for any specific entertainment.

4. Validity of the Orders Passed by Appellate and Revisional Authorities:
The court found that the orders passed by the appellate and revisional authorities were non-speaking and lacked application of mind. The appellate authority merely referred to the facts and contentions without providing any reasons, while the revisional authority incorrectly stated that the Collector had given detailed reasons. Consequently, the court quashed and set aside these orders.

Conclusion:
The court allowed the petition partly, quashing the impugned orders and directing the fourth respondent to re-calculate the petitioner's liability for bumper tickets in line with the court's findings. The petitioner was entitled to exemption for individual rides priced below Rs. 6, and the entry fee should not be included in the computation of entertainment tax for bumper tickets. The rule was made absolute to this extent, with no order as to costs.

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