2023 (12) TMI 365 - HC - VAT and Sales Tax

Refund of duty deposited - Constitutional validity of proviso to Section 3(1) and sub-section (5A) of Section 3 of the Bombay Entertainment Duty Act, 1923, inserted by the Bombay Entertainment Duty (Amending) Act, 1998 - whether the Petitioner can justify in invoking Article 14 of the Constitution of India, to claim refund of duty deposited on the ground that the respondents have not collected duty from similarly placed persons? HELD THAT - There are separate provisions dealing with the amusement park and the water sports activity. If the legislative intent was to cover only water sports activity by amusement park then the Acts would not have made a distinction between the amusement park and water sports activity. The levy is on the activities and not on the entity carrying on the activities. Therefore, whether water sports activity is carried on by amusement park or by non amusement park, both would be liable to pay the entertainment duty - It is also important to note that third proviso to Section 3(1) expressly provides that water sports activity whether situated within or outside the amusement park would be liable for entertainment duty. Therefore, the scheme of the Act clearly negatives the contention raised by the petitioners by relying on legislative debate that only water activities by amusement park are liable for duty. It is important to note that the petitioners have admitted that they are covered by the Entertainment Duty Act. After having admitted the same, the petitioners cannot turnaround and contend at the fag end of the proceedings that since the intention of the legislature is to cover water activities in amusement park and since their activities are not in amusement park, they are not liable for duty. Section 3(1) of the Act which is charging section imposes levy, not only on entertainment as defined by Section 2(a) of the Act but also covers various other activities including water sports activity and admittedly, the activities of the petitioners like water sking, wind surfing, sailing, kayaking, Jet boating etc. are water sports activities and hence covered by charging section. The petitioners having made an application and having taken benefit of no duty for the first three years now cannot turnaround, on expiry of three years when they are liable to pay duty at the rate of 50% and full amount thereafter, that their activities are not covered by the Bombay Entertainment Duty Act and therefore, the petitioners rightly began the arguments by stating that they are covered by the provisions of the Bombay Entertainment Duty Act. The petitioners are now estopped from contending otherwise. The claim of refund by the Petitioner is made of the duty which they themselves and rightly so paid. On these facts, in our view, the petitioners now cannot contend that their activities are not covered by the Entertainment Duty Act. The Supreme Court in case of Supreme Court in case of THE STATE OF TRAVANCORE-COCHIN AND OTHERS VERSUS THE BOMBAY COMPANY LTD., ALLEPPEY AND OTHERS 1952 (10) TMI 28 - SUPREME COURT held that speeches made by the Members of Constituent Assembly in the course of debates on the draft constitution is unwarranted. The Supreme Court observed in the said judgment that this form of extrinsic aid cannot be used for interpreting any provisions of the statute and same has been generally accepted in England and in the construction of Indian Statutes as well. The petitioners are not justified in relying upon the views of some members in the course of the debates in the Legislative Assembly for interpretation of provisions of Entertainment Duty Act when the Act itself is clear on this issue - Petition dismissed.

Summary

Issues Involved:
1. Constitutionality of proviso to Section 3(1) and sub-section (5A) of Section 3 of the Bombay Entertainment Duty Act, 1923.
2. Refund of entertainment duty paid by the petitioners.
3. Alleged discrimination under Article 14 of the Constitution of India concerning the levy of entertainment duty on water sports activities.

Summary:

1. Constitutionality of Proviso to Section 3(1) and Sub-section (5A) of Section 3:
The petitioners initially challenged the vires of the proviso to Section 3(1) and sub-section (5A) of Section 3 of the Bombay Entertainment Duty Act, 1923, as inserted by the Bombay Entertainment Duty (Amending) Act, 1998. However, they decided not to press this issue in light of the Delhi High Court's decision in DLF Golf Resorts Ltd. vs. State of Haryana & Ors. The issues raised in this prayer were kept open, and the adjudication was confined to the other prayers.

2. Refund of Entertainment Duty:
The petitioners sought a refund of Rs. 1,52,45,923/- paid as entertainment duty. They argued that since similar operators were not charged the duty, they were discriminated against under Article 14 of the Constitution. The court noted that the petitioners admitted their liability under the Bombay Entertainment Duty Act and had sought exemptions and remissions under Section 3(5A). The court held that the petitioners could not claim a refund based on negative equality, as the principle of equality under Article 14 does not permit perpetuating an illegality. The court cited several Supreme Court decisions to support this view, including Secretary, Jaipur Development Authority, Jaipur vs. Daulat Mal Jain & Ors. and Gursharan Singh & Ors. vs. New Delhi Municipal Committee & Ors.

3. Alleged Discrimination under Article 14:
The petitioners contended that other operators engaged in similar water sports activities were not subjected to entertainment duty, thus violating Article 14. The court found no evidence to support that the activities of the petitioners were identical to those of other operators. The court emphasized that Article 14 guarantees equality before the law and does not sanction negative equality. The petitioners failed to demonstrate any parity between their activities and those of the operators at Gateway of India. The court held that the petitioners' plea of discrimination was untenable and dismissed the petition.

Conclusion:
The court dismissed the petition, holding that the petitioners were liable to pay entertainment duty under the Bombay Entertainment Duty Act, and there was no violation of Article 14. The petitioners' claim for a refund was rejected, and the court emphasized that equality under Article 14 cannot be claimed based on an illegality.