2015 (4) TMI 424 - HC - VAT and Sales Tax

Levy of Entertainments & Advertisements Tax - Whether the assessee M/s Sky Media (P) Ltd. Jodhpur, a Multi System Operator (MSO), falls within the definition of Proprietor' and the charging provision of the Rajasthan Entertainments & Advertisements Act, 1957 and is liable to pay entertainment tax on the satellite signals or electronic TV signals provided to the cable operators, who further transmit the same to the viewers/consumers for entertainment by exhibition of films & videos etc. - Held that - there is no separate definition of the Multi System Operators like the present assessee, cable operators, sub-cable operators are found in the Rajasthan Entertainment & Advertisement Tax Act, 1957 but equally it is beyond any doubt that the MSO with the nature of work it does of receiving the satellite signals and transmitting the same to the cable operators is nothing but a work of cable operator as defined under the West Bengal Act, which was subject matter of the controversy before the Supreme Court in the case of M/s Purvi Communication (supra) and it would be of great value to quote para 34 and 35 of the said judgment to explain the aforesaid proposition that MSO is nothing but a cable operator as defined in the West Bengal Act read with the provisions of the Cable TV Network Regulations, 1995. Multi System Operator, will clearly fall within the ambit and scope of the definition Proprietor' read with the charging provision of Section 4AA of the amended law, irrespective of the fact that there is no separate definition of such MSO, cable operator or sub-cable operator in the Rajasthan Act. A closer scrutiny of the definition of Proprietor', who falls within the tax net under the said law would reveal that even MSO like the present assessee is undoubtedly a person connected with the organization of entertainment. He may or may not be a last person providing such entertainment in the chain to the ultimate subscriber/viewer and there may be one or more agency in between like cable operator or sub-cable operator in the present case. But, it is undoubted that without the transmission of satellite signals or electronic signals by the MSO to the cable operators or sub-cable operators, the ultimate consumer or viewer cannot view the entertainment. Thus, the MSO is undoubtedly an integral part of the chain of persons or agencies or organization providing such entertainment and since the definition of the Proprietor clearly covers such an assessee, therefore, it cannot be contended, as has been contended by the assessee, that in the absence of a specific definition in the definition clause of cable operator or Multi System Operator, they would not fall within the tax net. The controvery is squarely covered on all fours by the aforesaid judgments of Hon'ble Supreme Court in the case of M/s Purvi Communication (2005 (3) TMI 438 - SUPREME COURT OF INDIA), Indusind Media (2013 (3) TMI 110 - SUPREME COURT) and the amended provisions of the Rajasthan Entertainment & Advertisement Tax Act, 1957 and the orders passed by the assessing authority in the present cases deserve to be upheld while the orders passed by the two higher appellate authorities, namely; Deputy Commissioner (Appeals) and the Rajasthan Tax Board, deserve to be quashed and set aside. - M/s Sky Media Pvt. Ltd. would fall within the scope of charging provision of the Rajasthan Entertainments & Advertisements Tax Act, 1957 and under the retrospectively amended provisions of the Act and the present assessee would fall within the definition of Proprietor' as defined under Section 3(8) of the Act and is liable to entertainment tax under the charging provision of Section 4AA of the said Act of 1957. - Decided against assessee.

Summary

Issues Involved:
1. Whether the assessee, a Multi System Operator (MSO), falls within the definition of 'Proprietor' under the Rajasthan Entertainments & Advertisements Tax Act, 1957.
2. Whether the MSO is liable to pay entertainment tax on the satellite signals provided to cable operators.

Issue-wise Detailed Analysis:

1. Definition of 'Proprietor':
The core issue was whether M/s Sky Media Pvt. Ltd., an MSO, falls under the definition of 'Proprietor' as per the Rajasthan Entertainments & Advertisements Tax Act, 1957. The court examined the definitions and charging provisions under the Act, particularly Section 4AA and the relevant definitions in Section 3. The court noted that the term 'Proprietor' includes any person connected with the organization of entertainment, which encompasses MSOs providing satellite signals to cable operators. The court referenced the Supreme Court's judgment in M/s Purvi Communication, which held that MSOs fall within the definition of 'Proprietor' under similar provisions of the West Bengal Act. The court concluded that the absence of specific definitions for MSOs, cable operators, and sub-cable operators in the Rajasthan Act does not exclude MSOs from the tax net, as they are integral to the chain of providing entertainment.

2. Liability to Pay Entertainment Tax:
The court assessed whether the MSO is liable to pay entertainment tax under the amended provisions of the Act. The Assessing Authority had imposed entertainment tax on the assessee, considering it a 'Proprietor' providing cable services. The court upheld this view, reiterating that the MSO's role in transmitting satellite signals to cable operators makes it liable for the tax. The court referred to the Supreme Court's decisions in M/s Purvi Communication and Indusind Media, which confirmed that MSOs are liable to pay entertainment tax. The court dismissed the assessee's argument that the lack of specific definitions in the Rajasthan Act exempts them from tax liability, emphasizing that the broader definition of 'Proprietor' sufficiently covers MSOs.

Conclusion:
The court concluded that M/s Sky Media Pvt. Ltd., as an MSO, falls within the definition of 'Proprietor' and is liable to pay entertainment tax under the Rajasthan Entertainments & Advertisements Tax Act, 1957. The orders of the Deputy Commissioner (Appeals) and the Rajasthan Tax Board, which had set aside the tax imposition, were quashed. The court upheld the Assessing Authority's order, affirming the tax liability of the assessee. The revision petitions filed by the assessee were dismissed, and the question of law was decided in favor of the Revenue.