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TMI Blog2008 (11) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, hence, the writ petitions are being disposed of by this common judgment. Heard learned counsel for the parties and perused the affidavits, counteraffidavits and rejoinder affidavits filed on behalf of the parties. Factual matrix of these cases is that the petitioners are granted licences under section 4 of the Indian Telegraph Act, 1885 read with section 5 of the Indian Wireless Telegraphy Act, 1933, on payment of licence fee. Their case is that DTH service is different to that of one provided by the cable operators. It is pleaded by the petitioners that the DTH services are provided by them by using satellite system that transmits programmes and provides T.V. signals directly to subscriber's premises. The subscriber in the case of DTH can have access to the multiple channel directly at home in KU band using a small antenna and a Set Top Box (STB) which decrypts/decodes the code. STB once purchased by the customer becomes his property and no monthly rent is payable on it. On the other hand, cable operations are done on C band through cables and it serves number of televisions. Each of the petitioners, namely M/s. Dish T.V. India Limited and M/s. Tata Sky Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1353 of 1993, it has been pleaded that no specific provision is required to be made in U.P. Entertainments and Betting Tax Act, 1979, to bring the DTH service providers under the net of entertainment tax. It is further stated in the counter-affidavit that State Legislature is fully competent to levy the entertainment tax on DTH service, under entry 62 of the List II (State list) of the Seventh Schedule to the Constitution of India. Referring to the case of State of West Bengal v. Purvi Communication P. Ltd. [2005] 140 STC 154 (SC); AIR 2005 SC 1849, it is further pleaded that the regulatory power and taxing powers cannot be mixed up. What is material is that the DTH service providers are also showing channels of entertainment, like the cable operators. Before further discussion, it is pertinent to mention here that the U.P. Entertainments and Betting Tax Act, 1979, was enacted by the Legislature of State of Uttar Pradesh (applicable to the State of Uttarakhand) as the subject-matter relating to entertainment tax was covered under entry 62 of List II (State List) of the Seventh Schedule to the Constitution of India. Initially, the said tax was payable on admissions to ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting has been adopted by the Finance Act, 2001 (with the following changes made vide Finance Act, 2003): broadcasting has the meaning assigned to it in clause (c) of section 2 of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 (25 of 1990) and also includes programme selection, Scheduling or presentation of sound or visual matter on a radio or a television channel that is intended for public listening or viewing, as the case may be; and in the case of a broadcasting agency or organisation, having its head office situated in any place outside India, includes the activity of selling of time slots or obtaining sponsorships for broadcasting of any programme or collecting the broadcasting charges on behalf of the said agency or organisation, by its branch office or subsidiary or representative in India or any agent appointed in India or by any person who acts on its behalf in any matter; The Telecommunication (Broadcasting and Cable Services) Interconnection Regulation 2004, provides definition of expression direct to home operator in regulation 2(k), as under: direct to home operator means an operator licensed by the central Government to distribute multi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that of cable service and cable television network , quoted above, and the definitions of expressions broadcasting and broadcasting agency and organisation given in the Finance Act, 1994 (as amended), this court is of the clear view that the broadcasting agency or organization which is providing entertainment without cables cannot be said to be covered by section 4B of the U.P.Entertainments and Betting Tax Act, 1979 (applicable to the State of Uttarakhand). And, the State Legislature, if so advised, may come with the amendments like the one brought by State Legislature of Maharashtra in the Bombay Entertainments Duty Act, 1923. Unless such amendment is brought by the Legislature to bring the broadcasting agencies into the net of the entertainment tax, said tax cannot be levied on the broadcasting agencies for DTH service provided by them to its subscribers. On behalf of the respondents attention of this court is drawn to the judgment and order dated May 26, 1995, passed by the Division Bench of Allahabad High Court in Writ Petition No. 1353 of 1993 (Universal Communication System v. State of U.P.,) wherein the Allahabad High Court has taken the view that where on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners it is submitted that since, the dismissal of the special leave petition is not simpliciter but howsoever brief, for the reasons mentioned in the order, as such the view taken by the Division Bench of the Patna High Court on the point, cannot be said to have been accepted by the apex court. Having heard learned counsel for the parties and after going through both the judgments of Allahabad High Court and Patna High Court, referred above, and after perusing the order of dismissal of special leave petition by the apex court on the brief reasons, this court is of the opinion that the ratio which has been approved by the apex court by dismissing the SLP is more binding in nature as to the one expressed by the Division Bench of the Allahabad High Court. On this point, (relating to binding nature of such orders) the cases of State of Manipur v. Thingujam Brojen Meetei [1996] 9 SCC 29, Union of India v. M.C. Desai [1998] 11 SCC 399, referred on behalf of the respondents get clarified by the view taken by the apex court in a subsequent judgment of Kunhayammed v. State of Kerala [2000] 119 STC 505; [2000] 6 SCC 359. Relying on the principle of law laid down by the apex court in A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes on entertainments, amusements, betting and gambling and entry 92C of List I (Union List) clarifies the field of legislation of Parliament on taxes on services . Article 246 read with article 245 of the Constitution of India empowers the Parliament and the State Legislatures to make the laws on the subjects mentioned in List I and List II, respectively, while List III consists of the topics on which Parliament as well as the State Legislatures have power to make law. Learned counsel for the parties read out various paragraphs of State of West Bengal v. Kesoram Industries Ltd. [2004] 266 ITR 721 (SC); [2004] 10 SCC 201, in support of their contentions relating to competence of Legislature on entertainment tax (for brevity this court does not think it necessary to quote the paragraphs of the judgment). In para 31 of said judgment referring to Hoechst Pharmaceuticals Ltd. v. State of Bihar [1984]8 55 STC 1 (SC); [1983] 4 SCC 45, it is observed that there is no overlapping in the taxing power and Constitution provides independent sources of taxation to the union and the States. It is further observed in said case that taxation is considered to be distinct matter for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is payable (or the like words) in entry 62 after the expression tax on luxuries, including taxes on entertainments, amusements, betting and gambling . For the reasons as discussed above, this court is of the view that though, there is legislative competence of the State to levy entertainment tax on the entertainment provided by the petitioners (broadcasting agencies) to its subscribers, but same cannot be levied without there being specific provision in such local Act (U.P.Entertainments and Betting Tax Act, 1979). As such, the notices issued by the respondent District Magistrates for recovery of entertainment tax from the petitioners, being without authority of law, are liable to be quashed. Accordingly, the impugned notices dated August 24, 2006, November 20, 2006, February 12, 2007, August 9, 2007 and recovery certificate/citation issued by the District Magistrate, Pithoragarh, and notice dated August 27, 2007 issued by the District Magistrate, Champawat; notices dated August 2, 2007 and September 10, 2007 issued by the District Magistrate, Udham Singh Nagar; and notice dated September 12, 2007 issued by the District Magistrate, Nainital, against petitioners M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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