2015 (5) TMI 913 - HC - VAT and Sales Tax

Levy of entertainment tax - Subscriber - Section 4AA of the Rajasthan Entertainment and Advertisement Act, 1957 - Applicability of the case of Purvi Communication 2005 (3) TMI 438 - SUPREME COURT OF INDIA - Held that - M/s Bhaskar Multinet (Private) Ltd. is also an MSO as its claim before the AO, DC(A) and so also the Tax Board has been that it is an MSO. The DC(A) so also the Tax Board in para 7 & 8 of the impugned order has reproduced the contention of M/s Bhaskar Multinet (Private) Ltd. where it has been categorically admitted that it is MSO - Therefore, once it is an admitted fact, then in the case of M/s Bhaskar Multinet (Private) Ltd. as well, the aforesaid judgments hold good. - Judgment of the Hon ble Apex Cort in the case of Purvi Communication P. Ltd. (supra) has rightly been applied by the Tax Board in the case of M/s. Radiant Satellite Private Ltd. and by this Court in the case of M/s Sky Media (P) Ltd. (2015 (4) TMI 424 - RAJASTHAN HIGH COURT) and thus the judgment in the case of Purvi Communication P. Ltd. (supra), holds the field and I do not find any distinguishing features in between the facts in the instant cases viz-a-viz the facts in the case of Purvi Communication P. Ltd. (supra) - Decided in favour of Revenue.

Issues Involved:
1. Applicability of the Rajasthan Entertainment and Advertisement Act, 1957 to Multi System Operators (MSOs).
2. Interpretation of the term "Proprietor" under the Act.
3. Validity of the notification dated 08/03/2006 imposing entertainment tax on MSOs.
4. Retrospective amendment of the Act by the Rajasthan Finance Act, 2011.
5. Relevance of judgments from other jurisdictions and prior cases.
6. Distinguishing features between the cases of M/s Radiant Satellite Private Ltd. and M/s Bhaskar Multinet (Private) Ltd.

Issue-wise Detailed Analysis:

1. Applicability of the Rajasthan Entertainment and Advertisement Act, 1957 to Multi System Operators (MSOs):
The court held that MSOs, such as M/s Radiant Satellite Private Ltd. and M/s Bhaskar Multinet (Private) Ltd., fall within the ambit of the Rajasthan Entertainment and Advertisement Act, 1957. The Assessing Officer (AO) assessed Rs. 20/- per subscriber connection and levied entertainment tax under Section 4AA of the Act, 1957, and the notification dated 08/03/2006. The AO's decision was based on the definition of 'Proprietor' and the charging provisions under the Act, which include MSOs providing satellite signals to cable operators.

2. Interpretation of the term "Proprietor" under the Act:
The court reiterated that the term 'Proprietor' under the Act includes MSOs who provide satellite signals to cable operators. The AO and subsequent appellate authorities held that MSOs are integral to the chain of providing entertainment and thus liable for entertainment tax. The court referenced the Apex Court's judgment in the case of State of West Bengal Vs. Purvi Communication Pvt. Ltd., which established that MSOs fall within the definition of 'Proprietor' under similar legislative frameworks.

3. Validity of the notification dated 08/03/2006 imposing entertainment tax on MSOs:
The court upheld the validity of the notification dated 08/03/2006, which imposed an entertainment tax of Rs. 20/- per subscriber connection on MSOs. The AO directed the assessees to provide a list of subscribers, which they failed to do, leading to adverse inferences and the imposition of tax, interest, and penalties.

4. Retrospective amendment of the Act by the Rajasthan Finance Act, 2011:
The court noted that the retrospective amendment of the Act by the Rajasthan Finance Act, 2011, effective from 25/02/2008, was upheld by the Division Bench of the High Court in the case of Tata Sky Ltd. Vs. The State of Rajasthan. This amendment included provisions for levying entertainment tax on MSOs and was deemed constitutionally valid.

5. Relevance of judgments from other jurisdictions and prior cases:
The court considered the relevance of judgments from other jurisdictions, particularly the Apex Court's decisions in Purvi Communication and Indusind Media & Commun. Ltd. These judgments were found to be applicable to the present case, reinforcing the liability of MSOs for entertainment tax. The court also referenced its own judgment in the case of M/s Sky Media (P) Ltd., which addressed similar issues and supported the AO's conclusions.

6. Distinguishing features between the cases of M/s Radiant Satellite Private Ltd. and M/s Bhaskar Multinet (Private) Ltd.:
The court highlighted that the Tax Board's decisions differed in the two cases due to the timing of the judgments relative to the retrospective amendment. In the case of M/s Radiant Satellite Private Ltd., the Tax Board upheld the AO's order post-amendment, leading to the dismissal of the assessee's petitions. Conversely, in the case of M/s Bhaskar Multinet (Private) Ltd., the Tax Board's decision pre-amendment was quashed, and the AO's order was reinstated, resulting in the allowance of the Revenue's petitions.

Conclusion:
The court dismissed the revision petitions of M/s Radiant Satellite Private Ltd., upholding the Tax Board's order and confirming the liability for entertainment tax. Conversely, the court allowed the Revenue's petitions against M/s Bhaskar Multinet (Private) Ltd., quashing the Tax Board's order and reinstating the AO's decision. The court emphasized the applicability of the retrospective amendment and the consistent interpretation of the term 'Proprietor' across similar cases.

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