2006 (12) TMI 570 - HC - Indian Laws

Summary

Issues Involved:
1. Rate of entertainment duty payable by the Petitioners for the period from 16th September 1994 to 24th December 1994.
2. Rate of duty payable for the period commencing 25th December 1994.
3. Legality and validity of the action of Respondents in seeking to recover duty payable during 25th December 1989 to 23rd August 1990 already adjusted against refund payable to Petitioners.

Summary:

Issue 1: Rate of Entertainment Duty Payable from 16th September 1994 to 24th December 1994
The Petitioners challenged the Respondents' action of recovering entertainment duty at 7.5% instead of 3.75% for the period from 16th September 1994 to 24th December 1994. The Court held that the rate of duty for the 4th and 5th year from the date of commencement of the amusement park should be 3.75%, as per Section 3(5)(a) of the Bombay Entertainment Duty Act, 1923. The Court emphasized that the statutory language should not be altered to exclude amusement parks from Section 3(2).

Issue 2: Rate of Duty Payable from 25th December 1994
The Court determined that from the 6th year onwards, the entertainment duty payable by the Petitioners would be 7.5%. This conclusion was drawn from a combined reading of Sections 3(1)(b), 3(2), and 3(5)(a) & (b) of the Act. The Court rejected the Respondents' argument that amusement parks should be excluded from the concessional provisions of Section 3(2).

Issue 3: Legality and Validity of Recovering Duty Payable During 25th December 1989 to 23rd August 1990
The Petitioners contested the Respondents' action of recovering entertainment duty already adjusted against a refund for the period from 25th December 1989 to 23rd August 1990. The Court held that the burden of proof to demonstrate that there was no unjust enrichment lies with the Petitioners. The Petitioners were allowed to present relevant material to the appropriate authority to justify their claim.

Conclusion:
The Court ruled in favor of the Petitioners regarding the rate of entertainment duty, establishing that:
1. No duty is payable for the first three years from the commencement of the amusement park.
2. A duty of 3.75% is payable for the 4th and 5th years.
3. A duty of 7.5% is payable from the 6th year onwards.

The Court also directed that the Petitioners must provide evidence to counter claims of unjust enrichment for the refund issue. The rule was made absolute in both petitions, with no order as to costs.