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TMI Blog2012 (6) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... h 7500 or above connections with the object of levy of luxury tax at the rate of ₹ 5 per month per person enjoying connection. We therefore, declare the levy of luxury tax on cable TV operators with above 7500 connections as discriminatory and violative of article 14 of the Constitution of India, and hence unconstitutional. Allow the WP(C) by declaring the impugned provisions of the Act authorizing levy and collection of luxury tax on cable TV operators including the petitioners with connections of 7500 or above as discriminatory and hence unconstitutional and invalid. - W.P. (C). No. 33966 of 2006 - - - Dated:- 28-6-2012 - RAMACHANDRAN NAIR C.N. AND BABU MATHEW P. JOSEPH, JJ. For the Appellant : Dushyant Dave, Senior Advocate and Saji Varghese For the Respondents : K.P. Dandapani, Advocate-General, Sojan James, Special Government Pleader and John Varghese, Standing Counsel, Central Board of Excise, The judgment of the court was delivered by C.N. RAMACHANDRAN NAIR J.- This WP(C) filed challenging the constitutional validity of levy of luxury tax on cable TV operators with effect from April 1, 2006 was dismissed by this court along with a few other cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs also raised the contention before the Supreme Court that this court in the judgment has not considered the challenge against the constitutional validity with reference to direct-to-home operators who are also providing the same service. Taking note of these contentions, namely, the subsequent amendment and the petitioners' challenge based on article 14 with reference to direct-to-home operators, the Supreme Court set aside the judgment and remanded the matter for enabling the petitioners to amend the WP(C) raising additional grounds for consideration by this court. 4. The learned senior counsel Shri Dushyant Dave appearing for the petitioners argued in support of all the grounds raised including the additional grounds raised after remand by the Supreme Court. The first ground raised by him is that the service rendered by the cable TV operators falls under entry 92C, List I of the Seventh Schedule to the Constitution which is covered by the Finance Act, 1994 providing for service tax on cable TV operators. Since the field is fully occupied by Central legislation, the State has no authority to levy tax under the Act in exercise of powers under entry 62 of List II of the Sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the decision in Bharat Sanchar Nigam Ltd. v. Union of India reported in [2006] 3 VST 95 (SC); [2006] 145 STC 91 (SC); [2006] 282 ITR 273 (SC), held that the same transaction may attract liability for service tax as well as liability for tax under any other head permissible in law. So much so, since the service rendered by cable TV operators involves entertainment to subscribers certainly both service tax as well as luxury tax could be levied. Further, what we notice is that service tax is payable on taxable service, which is the charges collected by the cable TV operators from subscribers for providing the service. Cable TV provides facility to consumers to access news, serials, cinemas and other entertainment programmes telecast in various channels. The provision in the charging section of the Act, i.e., section 4(2), is to levy ₹ 5 per connection per month towards luxury tax and collection from the subscriber is to be made compulsorily under the provision. So much so, what is to be seen is that though the tax is a charge on the cable TV operators, the incidence of tax falls on the subscribers, i.e., ₹ 5 per month, which is probably two per cent of the monthly col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow 7500 connections. When tax liability is to be borne by subscriber, he can avoid tax liability by joining an operator with less than 7500 connections. This is a clear discrimination without any basis is what we think. We do not want to refer various judgments of the Supreme Court on the application of article 14 because it is settled position that legislation in taxation matters also should conform to the discipline contained under Part III of the Constitution inasmuch as tax should be levied without discrimination. We have to also take into account the subsequent amendment made to the statute in the year 2011 completely exonerating all cable TV operators including the petitioners, which is probably the largest operator in the State. So much so, the whole effort of the State now is to sustain the legislation for five years to collect the arrears from the petitioners and probably few others who have connections above 7500. In our view, the change of policy and the subsequent two amendments have provided grounds to the petitioners and others to effectively and successfully challenge the constitutional validity of the legislation. 6. We are constrained to observe that going by th ..... 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