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2020 (12) TMI 278 - HC - VAT and Sales TaxLevy of Entertainment Tax - Online Booking Charges - Tamil Nadu Entertainment Tax Act, 1939 - HELD THAT - The present Appeals are squarely covered by the decision of this Court in PVR LTD., (FORMERLY KNOWN AS SPI CINEMAS PVT. LTD.) NEW DELHI VERSUS COMMERCIAL TAX OFFICER 2020 (10) TMI 778 - MADRAS HIGH COURT which dealt with the question of taxability of the Entertainment Tax on the Online Booking Charges and this Court held that the same are not subject to tax under the provisions of the the Tamil Nadu Entertainment Tax Act, 1939. These Appeals are squarely covered by the above judgment - Appeal allowed - decided in favor of appellant.
Issues:
Taxability of Entertainment Tax on Online Booking Charges under the Tamil Nadu Entertainment Tax Act, 1939. Analysis: The High Court of Madras, in a common judgment by Dr. Justice Vineet Kothari and Mr. Justice M.S. Ramesh, addressed the issue of taxability of Entertainment Tax on Online Booking Charges under the Tamil Nadu Entertainment Tax Act, 1939. The court referred to a previous decision in PVR Ltd. v. CTO, where it was held that online booking charges are not subject to tax under the Act. The court emphasized that the payment for admission is the key factor for the levy of Entertainment Tax, and online booking charges are not mandatory for gaining entry into the cinema hall. These charges are considered an additional payment for extra facilities provided by the cinema hall owner and are not uniformly charged from all customers. The court highlighted that the online booking charges are not a mandatory condition for all cinema-goers and are an optional, separate facility provided by the cinema owner. The judgment distinguished the case of Drive-in Theatre, where different classes of consumers were charged differently based on the services availed. It was clarified that the service of internet booking is outside the realm of the Entertainment Tax Act and is an independent, optional service. The court stressed that only the cost paid by the customer for entry to attend the entertainment can be taxed, not for a different service like online booking of tickets. The judgment also referred to the Gujarat High Court decision regarding separate payments for separate facilities not being exigible to Entertainment Tax. The court reviewed the assessment order passed by the Assessing Authority, noting that the Assessee had paid Service Tax on online booking charges under the Finance Act, 1994. The Assessing Authority imposed Entertainment Tax on online booking charges, leading to a reassessment order with penalties. However, the court held that the reassessment orders for the relevant years could not be sustained and quashed them. Consequently, the court allowed the Writ Appeals filed by the Assessee, setting aside the order of the learned Single Judge. The Appeals were allowed based on the previous judgment, and no costs were awarded. In conclusion, the High Court of Madras ruled in favor of the Assessee, holding that online booking charges are not subject to Entertainment Tax under the Tamil Nadu Entertainment Tax Act, 1939. The judgment provided a detailed analysis of the legal provisions and previous decisions to support the decision in this case.
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