2018 (2) TMI 1430 - HC - VAT and Sales Tax

Entertainment Tax u/s 6- A(4) of Karnataka Entertainment Tax Act, 1958 - Bangalore Fashion Week organized and held by the petitioner in Hotel Crown Plaza on 03.02.2012 - case of petitioner is that the Event organized by the petitioner did not fall within the four corners of the definition of Entertainment as defined in Section 2(e)(iii) of the Act, 1958 as it was a Fashion Week, in which, the apparels and dresses of various manufacturers were put in exhibition on mannequins and even live models. Held that - There is little doubt that the Event of Bangalore Fashion Week which included lifestyle parties, after Hour Parties, Press Conferences, display of designer products through mannequins and live models etc., would fall within the definition clauses and charging provisions of the said Act, 1958 - There is no doubt that the wide words employed in the said definition of Entertainment , which words are joined by the word or are by themselves of wide amplitude or import and there is neither any exclusion nor any separate inclusion in the said definition, because the legislature in its own wisdom already provided the wide words include all pervasive entertainments so as to cover all kinds of amusement, entertainment, exhibition or performance or pageant or a game or sport whether held in indoor or outdoor and made them taxable under the provisions of Section 3 of the said Act, 1958. The event organized by the petitioner clearly attracts the entertainment tax liability and there is no escape from the wide definition of Entertainment and charging provisions as contained in the Act itself. The overlapping of the words employed in the definition of Entertainment is intended to cover different kinds of Events and things of entertainment and they cannot be construed in separate and water tight compartments. At this stage, there is no need to relegate the petitioner to the appellate channels, as provided under the said Act against the said impugned assessment order - petition dismissed - decided against petitioner.

Summary

Issues:
Challenge to the imposition of Entertainment Tax on an event organized by the petitioner under the Karnataka Entertainment Tax Act, 1958.

Analysis:
1. Previous Litigation History: The petitioner filed a writ petition challenging the order imposing Entertainment Tax. The earlier petition was disposed of with liberty to approach the Karnataka Appellate Tribunal. A subsequent Writ Appeal directed the Entertainment Tax Officer to reconsider the matter.

2. Contentions of the Petitioner: The petitioner argued that the Fashion Week event did not fall under the definition of 'Entertainment' as per the Act. Citing a Madhya Pradesh High Court case, the petitioner claimed that events not providing gratification, diversion, or amusement should not be taxed. The petitioner also distinguished a Supreme Court judgment on a similar issue.

3. Respondent's Argument: The Respondent-Department contended that the event organized by the petitioner fell within the Act's definition of 'Entertainment' and should be taxed. They supported the impugned order both on procedural and substantive grounds.

4. Court's Analysis: The court examined the definitions of 'Entertainment' and 'Payment for admission' under the Act. It noted the wide scope of the definitions, encompassing various forms of amusement, exhibition, and performance. The court emphasized that the receipt of sponsorship fees and advertisement charges made the petitioner liable for Entertainment Tax.

5. Interpretation of Definitions: The court rejected the petitioner's reliance on a Madhya Pradesh High Court decision and emphasized the broad and inclusive nature of the Act's definition of 'Entertainment.' It clarified that the Act did not restrict the definition to specific terms like 'pageant.'

6. Decision: The court upheld the imposition of Entertainment Tax on the Fashion Week event, stating that it clearly fell within the Act's provisions. It dismissed the writ petition, finding no merit in the petitioner's arguments. The impugned order was deemed comprehensive and valid, leading to the dismissal of the petition without costs.