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TMI Blog2017 (12) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 W.P.(C) 4966/2013, C.M. APPL.11216/2013, 6704/2016, 6706/2014 & 44758/2016, W.P.(C) 10729/2016, W.P.(C) 10731/2016 W.P.(C) 7465/2013, C.M. APPL.15967/2013, 4926/2014, 13750/2014, 5494/2015 & 12856/2016 W.P.(C) 2586/2017, C.M. APPL.11182/2017 & 11183/2017 W.P.(C) 7495/2014, C.M. APPL.17744/2014 & 22352/2015 W.P.(C) 9661/2016 W.P. (C) 12287/2015, C.M. APPL.32549/2015, Present: Mr. Arshad Hidaytullah, Sr. Advocate with Mr. Jitendra Singh and Mr. Saurabh S. Sinha, Advocates for petitioner/FDCI. Mr. Amit Sibal, Sr. Advocate along with Ms. Isha Jha and Ms. Ishita Srivastava, Advocates for petitioners in W.P.(C)7465/2013 & 2586/2017. Mr. Kamal Sawhney with Mr. Shikhar Garg, Advocates for petitioner in W.P.(C)4966/2013. Mr. Abhinav Agnihotri, Advocate for petitioner-Den Soccer Pvt. Ltd. in W.P.(C) 2886/2015 & 5994/2016. Mr. Siddharth Bambha, Advocate along with Mr. Rachit Shrivastava, Advocate for the petitioners in W.P.(C) 12287/2015. Mr. Atul Sharma with Mr. Abhinav Agnihotri and Ms. Satakshi Som, Advocates for petitioners in W.P.(C)7495/2014 & 9661/2016. Mr. Parag P. Tripathi, Sr. Advocate with Mr. Kunal Bahari, Advocates for respondent in W.P.(C)2563/2013. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral events (such as seminars, workshops, marketing events, setting up academic scholarships, liaison with other international fashion councils and government bodies, forecasting and development of new trends and setting industry standards and norms). By providing a platform to up and coming fashion designers, FDCI assists the promotion of Indian fashion worldwide and promotes fashion trade in the domestic and international markets. 3. Further to its objectives, FDCI, as a trade promotion council organises fashion weeks or fashion shows. These fashion shows are styled as market business promotion events and are the India Fashion Week (organised bi-annually), India Men's Week and Couture Week. None of these events are ticketed and entry is strictly by invitation; in other words the only invitees are potential domestic and international buyers and the media who are given invitations solely for promoting and marketing Indian fashion who do not buy tickets for admission. However, as organizing such events require funds, the petitioner enters into sponsorship/ partnership agreements with various parties. The amounts received are then disbursed for organizing the events and in return the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged the assessment order dated 11.06.2009 passed by the AETO in respect of the latter two events. FDCI inter alia also contended that tax was not payable on sponsorship amounts and that the order passed by the AETO had ignored the fact that sponsorship amounts were beyond the purview of the Act and also that the relationship between a sponsor and organizer was governed by sponsorship agreements. This Court by its order dated 30.04.2012 was of the opinion that the true nature of sponsorship agreements would have to be discerned to ascertain the nature of payments for the purpose of deciding if entertainment tax was payable. The court observed that: "16. We are of the view that unless the terms and conditions of the sponsorship agreement are examined it may not be possible to ascertain the true nature of the payment and decide about the applicability of the relevant provisions of the Act. The AETO, as noted above, has not carried out this exercise and has rested his conclusion merely on the statutory provisions without ascertaining the basic facts or examining the terms and conditions of the sponsorship agreement. The entire exercise seems to us to be meaningless, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the trade of the sponsor is completely different from the event- like a corporate house sponsoring a music festival, it is the second kind which the petitioner is concerned with i.e. the one where the sponsor funds an event which is integral to its trade/ business. FDCI argues that in fashion events, brand owners sponsor the show and do so purely for the purpose of furthering their business interests and are not in it for amusement. Furthermore, but for such sponsorship, talented designers and those in the fashion industry, would be unable to show case them. The sponsorship enables the event, by providing patronage, which in turn, results in exposure of designers' capabilities. No single individual or fashion house has the ability, in the country to organize an event, to showcase budding designers, whose offerings can be known to the public. The sponsors, by enabling the event, provide a platform for the future growth of such designs and products of designers and eventual growth of the industry. By participating in the events in the way they are, sponsors advertise/ promote their brands not only by showcasing it to the audience spectating the event at the venue but also to the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner ignoring that organizers who fund events cannot be taxed for payments made to access a place of entertainment. It is argued that fashion shows are not entertainment as the event participants are not entertainers, in any sense of the term, nor are the organizers or event facilitators creating an event for which there is "admission to entertainment". The core feature - that of receiving entertainment or being entertained is absent in these cases. Unlike typical entertainment events, meant to gratify, amuse or entertain viewers or participants, fashion shows, which are the subject matter of these cases, are "closed door" events the access to which is granted to only the organizers' invitees. The purpose of the event is not to entertain, but to sponsorship payments are not towards obtaining admission to a place of entertainment but are made by way of contracts which stipulate reciprocal rights from the primary organizer for purposes of advertising, organising conferences, parties, setting up stalls, banners etc. These do not constitute access to the event, nor can be equated with the price or consideration paid for "admission to entertainment event" which is the only incident of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have a rational nexus with the object of the Act. 9. FDCI challenges the impugned amendment to the Explanation on the ground that the power of a state is to impose taxes under Entry 62 of list II on "luxuries including entertainment" and consequently the impugned explanation is ultra vires the Constitution and is beyond the scope of Entertainment Tax Act. The petitioners argue that entertainment is an activity by which one person provides entertainment to another; organizers such as the petitioner, through sponsorship funding organize or create events. Whether an event is an entertainment or not would depend on the facts and as such entertainment could not be defined in a straitjacket formula. The petitioner argues that Entry 62 permits the imposition of tax only in cases where entertainment is provided and not merely for an event. As a corollary, what Entry 62 allows for the state is to legislate in respect of taxes which would be payable for a person to have access to a place of entertainment and to be the beneficiary of an entertainment event. Further, the Act does not contemplate a situation where the organizer or creator of the event needs to pay tax for access to the place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or traditional forms of entertainment were not covered by the provisions, not only did the legislature amend the definition in Section 2 (ha) and the definition of "admission to entertainment" by providing separately for clause (vi), to Section 2 (m), but created a separate charge. Relying on Union of India v M/s Martin Lottery Agencies Ltd2009 (12) SCC 209, learned senior counsel urged that levy through explanation, in a retrospective manner, falls foul of the Constitution of India. 12. Reliance upon the 1997 Rules (especially Rule 11, Form 6) is placed to reinforce this argument. They deal with the form, and manner in which information is to be given to the Commissioner before an event can be held. The petitioner submits that Form 6, which is to be submitted in compliance to Rule 11 in case of non-ticketed events (and which recognizes both sponsorship and advertisement amounts), nowhere discloses the tax component associated with the latter amounts and consequently it is a logical conclusion that when there is no payment for admission there is no taxing incidence. It was submitted that in the absence of a clear and cogent mechanism for tax collection, the levy, if it is assumed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in exceptional and rare cases. The device used by introducing, an explanation cannot widen the scope of the original provision and certainly not in a way that interferes, or conflict with the main provisions of the Act. In this regard, learned senior counsel relied on the judgment reported as Sundaram Pillai Vs Pattabiraman (1985) 1 SCC 591 which through a detailed analysis of case law relating to statutory interpretation and the scope of an explanation had enunciated that such a device has limitations and cannot widen the scope of something which was never intended to be covered. In other words, said counsel, the explanation, which are impugned in these batches of cases, are not clarificatory, notwithstanding the state's interpretation to the contrary, but seek to expropriate the petitioners through an illegal levy, in a retrospective manner. The petitioner argues that retrospective effect should be given only for clarificatory purposes or to remove technical defects or in cases of economic importance- an instance being the protection of a tax base from unscrupulous schemes created with the motive of avoiding tax liability. Now by seeking tax from the petitioner, what the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se that is playing at their home stadium. BCCI refers to its Franchise Agreement with GMR Sports Private Limited, whose team (Delhi Daredevils) has played most of its home matches (except those played in South Africa in 2009 and some matches played at Raipur) at the Ferozshah Kotla Ground in Delhi. Accordingly, while the DDCA may have provided certain assistance to the Franchisee in organizing the said matches at the Ferozshah Kotla (by virtue of being the owner of the Stadium), the responsibility of organizing the IPL T20 matches played at the Stadium is solely on the Franchisee (GMR). 16. It is argued by Mr. Kamal Sawhney for BCCI that all the tickets for PL T20 matches played at the said Stadium are printed by GMR and the proceeds from the sale of the said tickets are also retained solely by the Franchisee. In fact GMR is treated by GNCTD as the proprietor for all matches held in Delhi in the past. Furthermore, GMR has in the past, filed entertainment tax returns and paid them. It is urged that the agreement between GMR and DDCA clearly shows that it is the Franchisee who is fully and solely responsible for organizing (in its capacity as sole proprietor) the matches of Delhi. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly because some access to sponsors' representatives is provided for the event. 18. It is submitted that what the Act empowers the respondents to do is to collect tax on the occurrence of the specified event, i.e. admission to entertainment. In the present case, the admission to the entertainment is through sale of tickets; the tax on that incident is collected by GMR and paid to the respondents. Such being the case, the impugned notification and amendment, to the extent it purports to create a species of "entry" for the entertainment by deeming sponsorships as also another form, is beyond the mandate permitted to the legislature. In saying so, counsel urges that the taxing event or incident, i.e. is one whole, and gets completed, with the physical access and entry to the spectator; by seeking to add another layer by an artificial fiction of a deemed "entry" through sponsorship, the legislature is seeking to conjure an event that does not occur; moreover it is layering up one transaction with several artificial ones, merely to collect tax from transactions that fall outside the pale of the Act. 19. In the case of BCCI/ GMR the events are cricket matches, which qualify as entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 22. DEN Soccer (P) Ltd, (hereafter "DEN", the petitioner in WP 7495/2014) is, like BCCI, aggrieved by the respondent's position that entertainment tax is payable for sponsorship amounts received by it. DEN was granted franchise rights by Football Sports Development Private Limited for forming a football team to represent Delhi in a football tournament called "Indian Super League" (ISL) organized by Football Sports Development Private Limited. The team formed by DEN is called "De Dynamos Football Club". As franchisee of the tournament, DEN is obligated to organize certain matches in Delhi and print, sell and distribute tickets for the matches to be held at Delhi. It is alleged that DEN approached various organizations and companies for providing sponsorships for sponsoring the event. Ordinarily the benefits provided to the sponsors for the consideration paid for the sponsorship relates to displaying the sponsors company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition as well as other benefits associated with sponsorship. Pertinently DEN mentions that the sponsorship is not dependent on the matches or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment refused to grant exemption in respect of events to be conducted in that year and required the petitioner to deposit the entire taxable amount with respect to sponsorship payments. Against this, the petitioner approached this Court for issue of NOC. Since the petitioner did not protest nor did it raise any objection with respect to the previous years, where exemption was sought and granted, the petitioner is estopped by conduct from raising the issue now at this belated stage and after having claimed and received several exemptions. 24. Mr. Tripathi contends that the amendment is well within the defined limits of Entry 62 of List II of the Seventh Schedule of the Constitution. He contends that the second Explanation cannot be ultra vires the Constitution or the Entertainment Tax Act because it does not extend or enlarge the scope of the taxing incidence and has been added only for clarificatory purposes. Learned senior counsel relies on the phraseology in Section 2(m)(i) and 2(m)(iv) and explains that the term "person" includes any person including a company or body of individuals or an association. When section 2(m) is read with Section 6(6), it covers a broad class of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gram but in an indirect way get their clients to watch the shows being hosted by the petitioner. The revenue contends that the scheme of the DEBT Act does not make distinctions between direct and indirect beneficiaries of an entertainment. Similarly nowhere is the definition of "payment for admission" restricted to merely payment through ticket. As long as a contribution has been made for the admission to an entertainment place the same would be liable to tax irrespective of who watches the show. The revenue urges that no distinction exists between a person who buys a ticket and a sponsor because either way both ultimately fund/ finance the producer/ proprietor of the event; while in the latter case the contributor is an indirect beneficiary the former is a case of direct beneficiary. If the logic of the petitioner had to be followed, that no tax liability accrues on a sponsor's contribution because it is used for the purpose of funding an event, then for the same reason no entertainment tax should be charged from a ticket holder too. 27. The revenue argues that the petitioner's reliance on Form 6, specifically the lack of any taxing component, is misplaced. This is because Form 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances there is no bar to giving it retrospective effect. Mr. Tripathi relies on Raman Lal Bhai Lal Patel v State of Gujarat reported as (2008) 5 SCC 449 which held that where the definition is an inclusive definition, the use of the word 'includes' indicates an intention to enlarge the meaning of the word used in the statute. Counsel also relied on ND.P. Namboodripad v. Union of India (2007) 4 SCC 502, where the Supreme Court observed that: " .......... The word "includes" has different meanings in different contexts. Standard dictionaries assign more than one meaning to the word "include". Webster's Dictionary defines the word "include" as synonymous with "comprise" or "contain". Illustrated Oxford Dictionary defines the word "include" as: (i) comprise or reckon in as a part of a whole; (ii) treat or regard as so included. Collins Dictionary of English Language defines the word "includes" as: (i) to have as contents or part of the contents; be made up of or contain; (ii) to add as part of something else; put in as part of a set, group or a category; (iii) to contain as a secondary or minor ingredient or element. It is no doubt true that generally when the word "incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y manner unenforceable. Analysis and Conclusions 32. The vires of the impugned amendment to Section 2(m) which, by the Second Explanation brings to tax sponsorship amounts paid, in lieu of advertisements by deeming it to be payment for admission is premised upon the deemed fiction and inclusive definition. It is contended that sponsorship amounts received by proprietors for the purpose of organizing and putting together an event do not fall within the purview of the Entertainment Tax Act. Through a deeming fiction, sponsorship amounts, value of the goods supplied or services rendered in lieu of advertisement/promotion are now bracketed as payment for admission to an entertainment; the petitioners argue that the legislature has gone beyond its competence and instead of levying tax on payment for admission to an entertainment, is now levying taxes on advertisements and is going beyond the pale of Entry 62 of List II of the Seventh Schedule of the Constitution which is nothing but colourable exercise of power. The Petitioners argue that by virtue of Entry 31 and Entry 92 of List I taxes on advertisements are covered therein and consequently the State legislatures are barred from le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n society, which conducts fashion shows provides entertainment by hosting such shows. In Geeta Enterprise Vs State of U.P. & Ors, (1983) 4 SCC 202, a three Judge bench of the Supreme Court in the context of the U.P. Entertainment and Betting Tax Act, 1937, laid down certain tests to decipher if a given event is an entertainment for the purpose of levying tax. These were: "(1) That the show, performance, game or sport, etc. must contain a public colour in that the show should be open to public in a hall, theatre or any other place where members of the public are invited or attend the show; (2) That the show may provide any kind of amusement whether sport, game or even a performance which requires some amount of skill; in some of the cases, it has been held that even holding of a tambola in a club hall amounts to entertainment although the playing of tambola does, to some extent, involves a little skill; (3) That even if admission to the hall may be free but if the exhibitor derives some benefit in terms of money it would be deemed to be an entertainment; (4) That the duration of the show or the identity of the persons who operates the machine and derives pleasure or entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to a speech or performance, by a popular public figure, or motivational speaker, or a gratis performance by a popular entertainer which involves considerable expense, borne by a few sponsors (without which the event cannot take place) would not be an admission to an entertainment, unless those seeking the entertainment event are made to pay. Similarly, the judgment in Poorvi (supra) in the opinion of this court is of no assistance. That case did not concern entry to an entertainment event; it sought to tax a cable operator- much the same way the present Act does, through a separate definition as well as a charging mechanism. The relevant provisions of the state Act, in that case read as follows: "(4a) Where any owner, or any person for the time being in possession, of any electrical, electronic or mechanical device, is a cable operator and receives through such device the signal of any performance, film or any other programme telecast, and thereafter such owner or person, against payment received or receivable,- (i) exhibits such performance, film or programme through cable television network directly to customers, or (ii) transmits such signal to a sub-cable operator, who i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for admission to the entertainment or without any such payment for admission; (v) any payment made by a person who having been admitted to one part of a place of entertainment is subsequently admitted to another part thereof, for admission to which a payment involving tax or more tax is required; Explanation 1: Any subscription raised, contribution received or donation collected in connection with an entertainment, where admission is partly or entirely by tickets/ invitation specifying the amount of admission or reduced rate of ticket shall be deemed to be payment for admission; Explanation 2: Any sponsorship amount paid or value of goods supplied or services rendered or benefits provided to the organizer of an entertainment programme in lieu of advertisement of sponsor's produce/brand name or otherwise shall be deemed to be payment for admission." Explanations 1 and 2 were inserted on 1st October, 2012, with retrospective effect from 1st April, 1998."Proprietor" is defined by Section 2(o); it reads as under:- "2(o) "proprietor" in relation to any entertainment includes any person- (i) connected with the organisation of the entertainment, of (ii) charged with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the regular entertainment programme whichever is higher. (6) Where the payment for admission to an entertainment, referred to in sub-section (1), is made wholly or partly, the means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and of the amount of the payment for admission, if any, made otherwise (7) Where in a hotel or a restaurant, or a club, entertainment is provided by way of cabarets, floor shows, or entertainment is organised on special occasion along with any meal or refreshment with a view to attract customers, the same shall be taxed at a rate to be notified under sub-section (1)." Section 8 prescribes relates to information, which has to be provided by a person, who holds entertainment. The said section reads:- "Section 8 - Information before holding entertainment 1) No entertainment on which tax is leviable shall be held without prior information being given to the Commissioner in the manner prescribed. (2) No proprietor of a cable television network or video cinema shall provide entertainment unless he obtains permission from the Commissioner in the manner prescribed. (3) Notwiths ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax under this Act: PROVIDED that the government may cancel such exemption if it is satisfied that the exemption was obtained through fraud or misrepresentation, or that the proprietor of such entertainment has failed to comply with any of the terms or conditions imposed or directions issued in this behalf and thereafter the proprietor shall be liable to pay the tax which would have been payable had not the entertainment been so exempted. (4) Where the government is satisfied that the entertainment programme is not conducted for profit and the entire gross proceeds from payment for admission as defined in clause (1) of section 2 of an entertainment are to be devoted to philanthropic, religious or charitable purposes, without any deductions whatsoever on account of the expenses of the entertainment, it may, subject to the rules made under this Act, grant exemption to such entertainment from payment of tax under this Act on such terms and conditions as it may deem fit to impose. (5) Where any exemption from payment of tax is granted under sub-section (4), the proprietor of such entertainment shall furnish to the Commissioner such documents and records and in such in manner as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the proviso to sub-section (3) of section 14 of the Act. (5) The proprietor of the exempted entertainment shall submit to the Commissioner all tickets for admission for attestation in the manner required by the Commissioner before bringing them into use. He shall also prepare and submit to the Commissioner or any other officer authorised by him, within fifteen days from the date of entertainment a full and true account of the tickets issued at different rates and the gross amount collected from the sale thereof along with the counterfoils of used tickets and all the unused ticket books. He shall also furnish a full and true account of the expenditure incurred along with the vouchers, if so required by the Commissioner or any other office authorised by him, within fifteen days from the date of entertainment. 36. Exemption by Government under section 14(4) of the Act. (1) The application for exemption under sub- section (4) of section 14 of the Act shall be presented to the Commissioner, at least, fifteen days before the date of the entertainment stating clearly the full description, the nature of entertainment and the purposes of entertainment with necessary proof: PROVIDE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as its various organizing partners, who have business interest in these shows, to further their business select the audience for the shows. At fashion shows the nature of the goods showcased are generally luxury goods or brands and these shows are generally styled glamorously with after parties, special appearances by models etc. FDCI's position is that the shows are not held entertaining or providing amusement but for the purpose of furthering business; the dominant purpose here is promoting business; if incidentally the audience is entertained it would not imply that the primary purpose for organizing the event is entertainment. These events are held for a fixed audience picked by the organizers themselves; the "public" element is absent in the case of FDCI. It is true that the events in question showcase luxury goods in luxury locations like five star hotels and convention centres. However, by that reason alone the events cannot be labeled as entertainment shows. 43. The Govt. of NCT of Delhi relied on Amit Kumar v State of Uttar Pradesh (2008) 1 SCC 528, where the Supreme Court held that the fashion show in question which was organized for promoting an arts and cultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons who are being entertained". The revenue relies upon Union of India v Alok Kumar (2010) 5 SCC 349 to contend that in this case there are not several different expressions representative of one genus. 45. In the present case, "accommodation" necessarily means all kinds of accommodation. Once any payment for admission to entertainment is made, Section 6, the charging provision that subjects to tax all such payments is attracted. Section 6(6) taxes any payment for admission to entertainment under Section 6(1) made by way of subscription, contribution and donation or otherwise. The revenue contends that the phrase "or otherwise" in Section 6(6) is to be construed widely to include sponsorship amounts. It relies on the decision of the Supreme Court in Lila Vati Bai v State of Bombay AIR 1957 SC 521 where it was held that when the legislature uses the term "otherwise" in a statute it does so to cover all possible cases occurring due to any reason. On the other hand the petitioners argue that Section 6(6) is towards any payment made in lieu of being entertained and sponsorship amounts are outside the purview of the section. The petitioner argues that sponsors are not the ones being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghts. Through the Second Explanation, read with Section 6, the legislature includes sponsorship into the taxing ambit. 49. Two questions arise in the circumstance - firstly can the legislature increase the scope of taxability by inserting an Explanation and secondly is such inclusion of sponsorship amounts within the scope and object of the Entertainment Tax Act read as a whole. An Explanation is added to clear any ambiguities that may arise while interpreting or applying a provision of the statute; it is not meant to enlarge the scope of the original provision. It only explains what has already been given and cannot through the process of explaining or clarifying seek to add that which is not there in the original provision. When there is some challenge to the scope of the explanation, it is useful to discern any ambiguity by testing its true effect in the context of the whole Act. In this context the decision of the Supreme Court in Sundaram Pillai Vs Pattabiraman (1985) 1 SCC 591 where a detailed analysis of statutory interpretation and the scope of "explanation" was done is of relevance. The Court held that: "53. Thus, from a conspectus of the authorities referred to above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slate is derived from Article 245, the areas of legislation are demarcated by the three lists under Schedule VII. It was held that: "32. One of the proven methods of examining the legislative competence of an enactment is by the application of doctrine of pith and substance. This doctrine is applied when the legislative competence of a Legislature with regard to a particular enactment is challenged with reference to the Entries in various lists and if there is a challenge to the legislative competence the courts will try to ascertain the pith and substance of such enactment in question is genuinely referable to the field of legislation allotted to the State under the constitutional scheme." 51. One time - honoured principle applied to determine legislative competence is that a Court must not take a doctrinaire or pedantic approach but should weigh the question in a liberal manner. Though the entries in the Seventh Schedule only outline the fields of legislation, yet, when legislative competence with respect to an Act is challenged, its legitimacy has to be traced keeping in mind the scope as well as object and reasons of the Act with reference to the Entries in either List II or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise." A proprietor in the context of Section 6 and for the purpose of the issue at hand is defined under Section 2(o) as: "(o) "Proprietor" in relation to any entertainment includes any person- (i) Connected with the organization of the entertainment" 54. In this backdrop what is to be determined is whether sponsorship amounts fall within the classification under Section 6(6). The substance of levy under the Act is payment for admission in any form to a place of entertainment. The taxing incidence therefore, is payment for admission to entertainment, not the entertainment event itself. When juxtaposed with the scheme of the Act, which is to tax payment made for admission to entertainment, the question, which presents itself, is whether sponsorship amounts, made through agreements, for business purposes are payments for admission to a place of entertainment. Payment for admission to a place of entertainment, in common parlance, would mean payment for the purpose of entry to enjoy or derive amusement from the entertainment event. What sponsors do is diametrically opposite to what is contemplated under the Act. A sponsor is a secondary organizer of the event. While the prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of going to the measure of the tax would arise only if it is found that the charge of tax is attracted. Under section 3 read with section 2 (d) and section 2 (a) , the charge or levy of tax is attracted only if an entertainment takes place in a specified place or locations and persons are admitted to the place on payment of a charge to the proprietor providing the entertainment. In the present case, as DTH operation is not a place-related entertainment, it is not covered by the charging section 3 read with section 2 (a) and 2 (b) of the 1936 Act. Consequently, the question of going to section 2 (d) (iv) does not arise. Moreover, even if section 2 (d) (iv) is to be read as an extension of section 3 and, thus, as a part of the charge, it does not make any difference at all because section 2 (d) (iv) refers to "entertainment" which takes us back to section 2 (b) and finally to section 2 (a). 38. We have held that DTH is not covered by the provisions of section 3 read with section 2 (a) 2 (b) and 2 (d) of the 1936 Act. The issue gets further settled on reference being made to the mechanism of collection of the charge as provided under section 4 of the 1936 Act. Section 4 (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere inserted. The courts are in future required to determine whether a service tax within the meaning of Entry 92C would cover sale of lottery or it would come within the purview of residuary entry containing Entry 97 List I. If it is held to be a taxing provision within the purview of Entry 97, the same will have a bearing on the States. The Explanation so read appears to be a charging provision. It states about taxing need. It can be termed to be asui generis tax. If it is a different kind of tax, the same may be held to be running contrary to the ordinary concept of service tax. It may, thus, be held to be a standalone clause. A constitutional question may have to be raised and answered as to whether the taxing power can be segregated. If by reason of the said explanation, the taxing net has been widened, it cannot be held to be retrospective in operation." 57. This court's reasoning is bolstered, to a considerable extent, because in the past, whenever the legislature wished to expand the levy of tax, not only did it amend the definition clause, but also amended the charging provision, as in the case of DTH service and video service. This is apparent from the amendment to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices from multi- system operator or from cable operator or from direct-to-home (DTH) broadcasting service at a place indicated by him to the service provider, without further transmitting it to any other person; Explanation In case of hotels each room or premises where signals of cable television network are received shall be treated as a subscriber. Explanation II: In case of direct-to-home (DTH), every television set or computer set receiving the signals shall be treated as a subscriber; xxxxxxxxxxxxxxxx 7. Tax on cable, video service and direct-to-home (DTH) service (1) Subject to the provisions of this Act, there shall be levied and paid an entertainment tax on all payments for admission to an entertainment through a direct-to-home (DTH) or through a cable television network with addressable system or otherwise, other than entertainment to which section 6 applies, at such rates not exceeding rupees six hundred for every subscriber for every year, as the government may, from time to time, notify in this behalf, which shall be collected by the proprietor and paid to the Government in the manner prescribed. (2) Nothing in sub-section (1) shall preclude the government fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return and challan of payment shall be furnished to the assessing authority within seven days from the end of the month for which tax is due and the provisions of sub-rules (2) and (3) of rule 25 shall mutatis mutandis apply. (3) Where the subscriber is a restaurant, the entertainment tax shall be paid as per the provisions of sub-section (3) of of section 7 of the Act and each room and premises where signals of cable television network are received, shall be treated as a subscriber. The provisions of sub-rules (2) and (3) of rule 25 shall mutatis mutandis apply." 58. It is evident, from the above provisions that Section 7 is a separate charging section. It clearly stipulates that entertainment tax is to be levied on all payments for admission to entertainment, inter alia, through a cable television network or DTH service. Now, if the respondent/NCT's arguments were to be accepted, there was no necessity of amending the charging provision, of the very same enactment, when according to that logic, the object of bringing to tax other diverse elements would have been achieved by merely amending the definition. However, the amendments of 2010, which not only amended the defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, that if the computation could not be done, the charge was not intended to apply." A similar view was expressed in Commissioner of Income Tax v D.P. Sandhu Bros [2005] 273 ITR 1 (SC) where describing the judgment in Srinivasa Setty it was held that "all transactions encompassed by Section 45 must fall within the computation provisions of Section 48. If the computation as provided under Section 48 could not be applied to a particular transaction, it must be regarded as "never intended by Section 45 to be the subject of the charge". 61. Govind Saran Ganga Saran vs. Commissioner of Sales Tax and Ors1985 (Supp) SCC 205 held that: "6. The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If these components are not clearly and definitely ascertainable it is difficult to say that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the amount received from them. Details with regard to number of shows daily held, number of seats in each class, number of each kind of tickets, etc. too has to be furnished. Form 6 stipulates that an applicant should give details of the amount of security deposit, if any, lying with the department if shows were previously held and amount of arrears of tax, if any, to be deposited in respect of shows previously held. 63. The forms, after submission are to be processed and dealt with by the authorities under Section 13 of the Act read with Rules 30 and 31. Section 13 reads as under:- "Section 13 - Deposit and forfeiture of security (1) Every proprietor before holding an entertainment on which tax is leviable shall deposit such security and in such manner as may be prescribed. The Commissioner may deduct any arrears of tax from the security and may vary or forfeit the security in such manner as may be prescribed. (2) No order to forfeit the security shall be made under subsection (1) unless, after giving the proprietor reasonable opportunity of being heard, the Commissioner is satisfied for reasons to be recorded that the proprietor has evaded the tax or violated the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of any subsequent default in the deposit of tax: PROVIDED FURTHER that the amount of security may be fixed at an amount higher than the full house capacity, if the Commissioner deems it fit in the interest of revenue. [(2) The amount of security for a direct-to-home (DTH) service shall be fixed by the Commissioner and shall not be more than the total tax chargeable for a period of three months.]" 65. By Rule 31, the Commissioner is entitled to fix the amount of security, not exceeding the amount of the total tax chargeable for the full house capacity. The proprietor is required to deposit security in terms of Rule 30 (1) by way of bank draft or pay order or bank guarantee or a fixed deposit receipt, for such amount as may be specified by the Commissioner under Rule 31. The second proviso stipulates that the amount of security may be higher than the full house capacity, if the Commissioner deems it fit in the interest of revenue. 66. The revenue had sought to urge that the columns, in Form 6, especially Sl. No. 10 indicates the machinery provision for collection in this case. This court is unable to concur. Just a reference to the expression "sponsor" would not, per se, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to secure visibility for their products/services. The end production may or may not be priced. If it is, the cost of the ticket for admission purposes, only, is the taxing incident. Any other interpretation would inject an uncontrolled element of subjectivity to the incidence of taxation, which is confined to entry to an admission event and nothing else. 68. Exhibitions, fashion shows, cultural festivals are generally conducted as a marketing exercise to further business of the concerned industry. For instance, in a college/cultural festival several private (and corporate) sponsors, in lieu of advertisement fund the festival. Such festivals are typically organized to facilitate interaction and dialogue between students from similar disciplines from different colleges. All such events are by invitation only where students do not purchase tickets and the presence of music or competitions or other kinds of events does not rob these festivals of its essential character of being a forum for student interaction. Even in the case of IPL matches, where the events are entertainment events and are ticketed, sponsors play a different role and do not share the same equation as the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aurants were not "payments for admission" to an entertainment within the meaning of the Act. Bailhache J. put the matter thus: "The question, therefore, which we have to determine is, what is the meaning of those words 'payment for admission' to an entertainment in that section. I ask myself whether any ordinary intelligent person who had taken tea or had dined at the Trocadero would, using ordinary language, say that he had paid for admission to the Trocadero. The answer to that question must be in the negative. In ordinary language when one has paid for a dinner in a restaurant, one does not say that one has paid for admission to the restaurant any more than, when one pays for a pair of boots bought in a shop, one would say one was paying for admission to the shop." 71. In Calico Mills Ltd. vs. State of Madhya Pradesh & Ors. AIR 1961 MP 257 a nominal entry charge of Rs. 2 was levied in an establishment ("the Calico Dome") which sold cloth and other related merchandise. Fashion models gave special performances at certain times. The charge to the store was uniform. The court held that such charge was an entry charge to the establishment, to restrict access having r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectator or as one of the audience to an entertainment. A display of the fabrics by mannequins wearing them was no doubt arranged during the evening hours. But that was not for the purpose of affording amusement Or gratification to the visitors but for enabling them to make a selection in the purchase of the goods they desired. It is common knowledge that the elegance and beauty of a wearing apparel can be best judged and appreciated when it is shown off by a person wearing it and not when it is folded and wrapped in packages. It is also well known that many drapers and milliners of repute and standing display their goods on dummy models. It seems to us that a place where fabrics are displayed and shown off by mannequins wearing them is no more a place of entertainment than a shop establishment where wearing apparels are displayed on dummy models. Nothing turns on the fact that the display by mannequins was on a stage or on the fact that there was a seating arrangement inside the Dome for having a good view of the display, or again on the fact that "many fashionable ladies and gentlemen of the town were attracted more towards the show than towards the purchase of cloth". Many o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shop. It may be that some persons interested more in the feature of display of fabrics by mannequins than in the purchase of any cloth did not make any purchase and did not cash in the form of cloth the value of the token. Or. again it may be that those making purchases of high value were indifferent to the credit allowable to them on the strength of a token. But because of such vagaries of some visitors, one cannot run away from the facts and hold that the amount paid for the token was a payment for admission to an entertainment within the meaning of the Act. The token of Rs. 2/- obtained by a person visiting the Dome during evening hours was nothing more than a part advance payment towards the purchases that may be made. We do not entertain the slightest doubt that there was no entertainment within the provisions of the Act and the token obtained by a person visiting the Dome during certain hours was not a payment for admission to the Dome, much less a payment for admission to a place in which entertainment was held." 72. For the above reasons, it is held that sponsorship amounts received by the petitioners became part of the admission to the entertainment events - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sponsorship amounts paid in the other cases (BCCI, GMR, DEN) are not to enable entry of someone to be amused or entertained, but rather to enable visibility of the sponsor's products or services. The placing of hoardings, or advertisements on site cannot be said to form "entry" to an entertainment event. For these reasons, it is held that the levy in this case also fails for absence of a defined and valid collection mechanism. 74. Now, to deal with the revenue's argument that the amendments are merely clarificatory in nature. The revenue relied on Gold Coin Health Food Private Ltd (supra) and Ambae Picture Palace (supra) for this proposition and also urged that the expression "entertainment" was defined in an inclusive manner. So read, Section 6 (6) read with Form 6 had always created a levy and a mechanism. Therefore, the clarification being what it is, is a declaration of what existed (since inception of the enactment) and consequently, was retrospective. 75. This court notices that in M/s Martin Lottery, a decision rendered after Gold Coin Health Food (P) Ltd (supra) in fact noticed this amendment. "the Court must be satisfied that the Parliament did not intend to introd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the appellants is accepted, the same would give rise to incongruous results. Such an interpretation, as is well-known, must be avoided, if avoidable. Furthermore, a statutory impost must be definite. Having regard to Article 265 read with Article 366(28) of the Constitution of India nothing is realizable as a tax or by way of recovery of tax or any action akin thereto which is not permitted by law." 77. The argument that sponsored events and sponsorship per se were covered by the un-amended Act, is therefore, insubstantial and rejected. The sequitur is that the amendment introduced a new element. By itself, in the absence of change to the enacting part creating a levy, (as discussed previously) the addition of the two impugned explanation, with retrospective effect cannot result in a valid impost; such impost cannot be retrospective in character. It is therefore held that the amendment is not clarificatory; it is also of no consequence given that there is no amendment to the charging section. Nor has a fresh charging provision been introduced introducing a fresh levy. In view of the opinion expressed as to the effect of the amendment, it is held that the retrospe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sponsors and the amount sponsored by them" and "name of advertiser and amount received from them" respectively. While submitting application under Form 6, it is not expected from an organizer to pay entertainment tax on sponsorship amounts, an aspect which is otherwise clearly spelt out in Form 5- i.e. entertainment tax paid proportionately on the ticket. 79. The upshot of the above discussion is that in regard to concluded or past transactions, where the organiser or proprietor of the event had no opportunity to collect tax - either because the event was not ticketed (as admission was not paid for) or the entertainment event itself like in sports events, was based on tickets, on which entertainment tax was paid, the requirement of paying amounts, now, on the basis that the past event too is taxable, results in onerous consequences. Speaking about retrospective levies, the Supreme Court in D. Cavasji v State of Karnataka 1985 (1) SCR 825 stated as follows: "It may be open to the Legislature to impose the levy at the higher rate with prospective operation but levy of taxation at higher rate which really amounts to imposition of tax with retrospective effect has to be ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature and the reasonableness of the restrictions imposed by it. In other words, it may be open to a party affected by the provisions of the Act to contend that the retrospective operation of the Act so completely alters the character of the tax imposed by it as to take it outside the limits of the entry which gives the legislature competence to enact the law; or, it may be open to it to contend in the alternative that the, restrictions imposed by the Act are so unreasonable that they should be struck down on the ground that they contravene his fundamental rights guaranteed under Article 19 (1) (f) & (g)." Yet later in Tata Motors v State of Bihar, 2004 (5) SCC 783 the Supreme Court had to examine the validity of introduction of a provision with retrospective effect, that partially withdrew a benefit that had been enjoyed by assesseess. This is what the court stated: "It is no doubt true that the legislature has the powers to make laws retrospectively including tax laws. Levies can be imposed or withdrawn but if a particular levy is sought to be imposed only for a particular period and not prior or subsequently it is open to debate whether the statute passes the test of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to a period of eight years and not either before or subsequently and, therefore, we are of the view that the impugned provision, namely, Section 26 deserves to be quashed by striking down the words "not being waste goods or scrap goods or by products" occurring in the said Section 26 of the Maharashtra Act IX of 1989 and the authorities concerned shall rework assessments as if that law had not been passed and give appropriate benefits according to law to the parties concerned." 80. This Court has concluded, earlier in the course of this judgment, that the amendment is not clarificatory; nor can it be said to introduce a valid levy, because of lack of any amendment to the charging provision; nor is there any valid mechanism to collect such levy. Therefore, the retrospectivity assigned to the amendment, is clearly arbitrary and unreasonable. It is so declared. 81. One last aspect needs to be dealt with. The revenue had contended that since many petitioners had sought exemptions and in some cases, deposited amounts pursuant to demands, the present proceedings on their part are not maintainable. The invocation of the doctrine of estoppel or waiver, in the opinion of this court, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners are directed to be refunded to them, with interest @ 7 percent per annum from date of payment, within 8 weeks from today. In the case of GMR, the amounts collected towards sponsorship receipts (as opposed to ticket collections for which tax has been deposited in the normal course) shall be similarly refunded, with similar rate of interest within 8 weeks. 83. All the writ petitions are allowed in terms of the above directions without any order as to costs. OPINION OF DEEPA SHARMA, J. 1. I have had the benefit of reading the judgment of my learned brother Judge. Since I hold different view, I have decided to write a separate judgment:- 2. These are 22 writ petitions. In writ petitions bearing W.P.(C) No.2563/2013, W.P.(C) No.6728/2013, W.P.(C) No.4792/2014, W.P.(C) No.3626/2015, W.P.(C) No.3308/2015, W.P.(C) No.2886/2015 and W.P.(C) No.3247/2015 (Group-A), the petitioner/Fashion Designs Council of India (hereinafter referred to as "FDCI") has challenged the assessment orders dated 08.03.2013, 19.06.2014 and 29.12.2014, wherein the entertainment tax has been imposed on the sponsorship amounts received by the FDCI for conducting the events. 3. In writ petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation to the main provision, without amending the main provision. The petitioners have also sought the quashing of Explanation 2 of Section 2(m) of the Act. 5. On the other hand, the main contention of respondents is that the definition of Section 2(m) of the Act is inclusive and wide enough to include all the payments made, may it be called by any name and made in any form for tickets or other accommodations in any form in a place of entertainment. It is argued that even before Explanation 2 was added, sponsorship amount received by FDCI for holding fashion shows was subjected to entertainment tax and this Court in earlier writ petition being W.P.(C) No. 1145/2010 titled as Fashion Design Council of India vs. GNCT and Ors., has dealt with this issue and remanded the matter with the direction to examine the sponsorship documents and then to assess the tax and this way the Coordinate Bench of this Court had upheld the levy of tax on sponsorship amount received by FDCI for conducting the fashion show. Also, this Court in the said matter had upheld the refusal on the part of respondents to give 100% exemption to FDCI from entertainment tax and upheld the order of the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislative intent in unequivocal terms, the same must be given effect to, regardless of the consequences that may follow. But if the words used in the provision are imprecise, protean or evocative or can reasonably bear meanings more than one, the Rule of strict grammatical construction ceases to be a sure guide to reach at the real legislative intent. In such a case, in order to ascertain the true meaning of the terms and phrases employed, it is legitimate for the Court to go beyond the and literal confines of the provision and to call in aid other well recognised rules of construction, such as its legislative/history, the basic scheme and framework of the statute as a whole, each portion throwing light on the rest, the purpose of the legislation, the object sought to be achieved, and the consequences that may flow from the adoption of one in preference to the other possible interpretation. 67. Where two alternative constructions are possible, the court must choose the one which will be in accord with the other parts of the statute and ensure its smooth, harmonious working, and eschew the other which leads to absurdity, confusion, or friction, contradiction and conflict between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction should not be given effect to..... 59. It has to be reiterated that the object of interpretation of a statute is to discover the intention of the Parliament as expressed in the Act. The dominant purpose in construing a statute is to ascertain the intention of the legislature as expressed in the statute, considering it as a whole and in its context. That intention, and therefore the meaning of the statute, is primarily to be sought in the words used in the statute itself, which must, if they are plain and unambiguous, be applied as they stand...." (emphasis supplied) 13. The same principles were again reiterated by the Apex Court in Gurudevdatta VKSSS Maryadit v. State of Maharashtra (2001) 4 SCC 534, wherein the Court has again held that the cardinal principle of interpretation is to give ordinary meaning to the words used by the Legislature and the words has to be understood in their natural, ordinary and popular sense and be construed according to their grammatical meaning. The relevant paragraph is reproduced as under:- "26. Further we wish to clarify that it is a cardinal principle of interpretation of statute that the words of a statute must be understood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should further the said object. Where the words used in a Statue are clear and unambiguous, the ordinary grammatical interpretation to those words should be given unless such an interpretation leads to absurdity. 16. In order to determine the issue in hand which essentially relate to the interpretation of Section 2(m) of the Act and the added Explanation 2 to it, it is necessary to understand the scope and object of the whole Act. 17. Section 9 and Section 10 of the Act puts total restrictions on the admission to a place of entertainment of any person unless such person is in possession of a valid ticket or he/she is a person exempted therein. Section 9 and Section 10 of the Act are reproduced as under for convenience:- "9. Restriction of admission - Save as otherwise expressly provided by or under this Act, no person (other than a person who has some specific duty to perform in connection with the entertainment, or duty imposed upon him by law, or a person authorized by the government in this behalf) shall be admitted to any entertainment except with a ticket in the prescribed form denoting that the proper tax payable under section 6 has been paid." "10. Restriction on ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and paid to the government in the manner prescribed. (2) Nothing in sub-section (1) shall preclude the government from notifying different rates of entertainment tax for different classes of entertainment or for different payment for admission to entertainment. (3) Where the payment for admission to an entertainment together with the tax is not multiple of fifty paise, then notwithstanding anything contained in sub-section (1) or sub-section (2) or any notification issued thereunder, the tax shall be increased to such extent and be so computed that the aggregate of such payment for admission to entertainment and the tax is rounded off to the next higher multiple of fifty paise, and such increased tax shall also be collected by the proprietor and paid to the government in the manner prescribed. (4) If in any entertainment, referred to in sub-section (1), to which admission is generally on payment, any person is admitted free of charge or a concessional rate, the same amount of tax shall be payable as if such person was admitted on full payment. (5) Where the admission to a place of entertainment is generally on payment, and if any entertainment is held in lieu of the regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently admitted to another part thereof, for admission to which a payment involving tax or more tax is required; (vi) any payment made by a person by way of contribution, subscription, installation or connection charges or any other charges collected in any manner whatsoever for entertainment through direct-to-home (DTH) broadcasting service for distribution of television signals and value added services with the aid of any type of addressable system, which connects a television set, computer system at a residential or non-residential place of subscriber's premises, directly to the satellite or otherwise. Explanation: Any subscription raised, contribution received or donation collected in connection with an entertainment, where admission is partly or entirely by tickets/invitation specifying the amount of admission or reduced rate of ticket shall be deemed to be payment for admission." 23. The definition starts with, using the expression "payment for admission includes". The use of word 'includes' in the definition unambiguously demonstrates the intent of the Legislature. The conscious use of the word 'includes' by the Legislature seems to have been don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue that generally when the word 'include' is used in a definition clause, it is used as a word of enlargement, that is to make the definition extensive and not restrictive...." 28. The Hon'ble Supreme Court in an earlier judgment P. Kasilingam and Ors. vs. P.S.G. College of Technology and Ors. AIR 1995 SC 1395, while discussing the meaning of words 'means' and 'includes' has held as under:- "19....A particular expression is often defined by the Legislature by using the word 'means' or the word 'includes'. Sometimes the words 'means and includes' are used. The use of the word 'means' indicates that "definition is a hard-and-fast definition, and no other meaning can be assigned to the expression that is put down in definition." (See: Gough v. Gough [(1891) 2 QB 665:60 LJ QB 726]; Punjab Land Development and Reclamation Corpn. Ltd. v. Presiding Officer, Labour Court[(1990) 3 SCC 682, 717 : 1991 SCC (L&S) 71]). The word 'includes' when used, enlarges the meaning of the expression defined so as to comprehend not only such things as they signify according to their natural import but also those things which the clause d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory meaning. At any rate, such expansive definition should be so construed as not cutting down the enacting provisions of an Act unless the phrase is absolutely clear in having opposite effect.." (emphasis supplied) 33. It therefore is clear that the fundamental canon of statutory construction is that a literal interpretation is the first and foremost approach. If the words are plain and clear, the Courts must give effect to its ordinary meaning without adding or subtracting anything. It is the grammatical interpretation which is needed to be given to a word used in a provision and the same should be in harmony and consonance with the Statute. 34. In the Act, the Legislature has used the expression 'include' in Section 2(m) of the Act which defines the payment for admission and also in Section 2(aa) of the Act which defines admission to an entertainment. From the object of the Act and the language used by the Legislature in other provisions of the Act clearly shows that the Legislature has consciously used the word 'include' in Section 2(m) and Section 2(aa) of the Act. The use of the word 'include' in these two definitions, defining 'payment for adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sorship amount paid as per definition of Section 2(m)(i) of the Act is payment for admission. This is the only interpretation that can be given to this provision. 37. Sub-clause (iv) of clause (m) of Section 2 of the Act includes within its ambit, any payment made by a person in any form, called by whatever name, may be made for any purpose, connected with the entertainment and if in lieu of that, a person is allowed to attend the entertainment or allowed to continue to attend it, then such payment by virtue of this provision, is payment for admission. The use of the words and expression "any payment, by whatever name called for any purpose whatsoever", if that purpose is "connected with entertainment" and which a person is required to make "in any form" as a "condition of attending", unambiguously depicts the intention of Legislature to give widest amplitude to this provision. To give narrow or restricted interpretation to the definition would certainly defeat the object of the provision and intent of the Legislature. 38. The Hon'ble Supreme Court in Gurudevdatta VKSSS Maryadit (supra) has clearly held that "the words of a statute must be understood in their natural, ordinar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in any form. The conscious use of such wide range language by the Legislature only indicates that it has been used with an object to circumvent the evasion of tax. 41. The said intention can also be seen, in the language used while defining "Admission to an entertainment" in Section 2(aa) of the Act. In this definition, the Legislature has again used the expression includes. The expression 'admission to entertainment' includes "admission to any place in which entertainment is held". While defining the expression "Admission to an entertainment", the Legislature has not used the expression "Admission of a person to a place where entertainment is held" rather it has used the language "includes admission to any place where entertainment is held". Reading of this plain inclusive language suggests that admission to a place of entertainment could be of a person or by any other way like display of goods, brand names or logo or advertisement of one's product etc. at a place where entertainment is being held. Wide amplitude of the provision cannot certainly be restricted. When both the definitions of admission to an entertainment and definition for payment for admission, is read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same." The same principles were reiterated by the Hon'ble Supreme Court in Dipak Chandra Ruhidas v. Chandan Kumar Sarkar (2003) 7 SCC 66. 45. This Court needs to judge the nature of impugned Explanation in the light of these principles which the Apex Court has formulated, in order to conclude whether the impugned Explanation is explanatory/clarificatory or it adds new levy, if it is latter, then it has to go. 46. For this, we need to construe Section 2(m). As already discussed, Section 2(m)(i) of the Act states that when a payment is made for seats or other accommodations in any form in a place of entertainment then such payment for seats or other accommodation in any form is subjected to tax as the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., entry to the shows organized by it is exclusively by invitation, both for domestic and international buyers, associated professionals and media. It was granted 100% exemption from the liability to pay entertainment tax under the Act in respect of the events held by it for the period 2002-2004. However, for the year 2008-2009, such exemption for holding such events was withdrawn and as a special case, considering the recession in the industry and export sectors and to project Delhi as a world class city, the liability of FDCI to pay the tax, was restricted to 50% of the tax payable. 49. FDCI approached this Court in writ petitions bearing W.P.(C) No.1145/2010, W.P.(C) No.3199/2011, W.P.(C) No.3200/2011, W.P.(C) No.3201/2011, W.P.(C) No.6564/2011, W.P.(C) No.7505/2011, W.P.(C) No.7506/2011, W.P.(C) No.1169/2010 and W.P.(C) No.4728/2010 against the assessment orders and demand of 50% of the entertainment tax and non-issuance of No Objection Certificate (NOC) on account of non-payment of entertainment tax. This Court directed the issuance of NOC subject to deposit of money. Before Additional Entertainment Tax Officer (AETO), FDCI raised two contentions. The first was that the Fashi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tipulation that the amounts are received by the petitioner on condition that some persons will be allowed admission to the Fashion shows without any separate payment for the same. This contention was put forward before the AETO. But he has not chosen to examine the same on the basis of the facts, the agreements between the petitioner and the sponsors. He has examined the question whether the Fashion shows are "entertainment" within the meaning of the Act, an aspect about which there is now no dispute. The AETO has referred to the question whether the sponsorship amount collected by the petitioner represented payment for admission to an entertainment in para 17 of his order dated 11.06.2009, which is an assessment order for the period 15.10.2008 to 19.10.2009. He has merely referred to Section 2(m) of the Act, and particularly to clause (i) of the provision. He has noted that the definition of the expression "payment for admission" is an inclusive definition and, therefore, should be construed liberally. He has also referred to Section 2(aa) of the Act which defines the term "admission to the entertainment". From this provision he has drawn the inference that even if the payment rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich defines the word 'entertainment' and Section 3 of The Uttar Pradesh Entertainment and Betting Tax Act, 1937, is akin to Section 6 of the Act. In M/s Geeta Enterprises and Ors. (supra),the Apex Court has laid down the parameters to be considered while deciding whether an event is an entertainment or not. The Court has held as under:- "12. Thus, on a consideration of the legal connotation of the word 'entertainment as defined in various books, and other circumstances of the case as also on a true interpretation of the word as defined in Section 2 (3) of the Act, it follows that the show must pass the following tests to fall within the ambit of the aforesaid section: 1. that the show, performance, game or sport, etc. must contain a public colour in that the show should be open to public in a hall, theatre or any other place where members of the public are invited or attend the show. 2. that the show may provide any kind of amusement whether sport, game or even a performance which requires some amount of skill. In some of the cases, it has been held that even holding of a tombola in a club hall amounts to entertainment although the playing of tombola does, to so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich could be free goods, free services or other benefits to the organizers and thereby causing profits to the organizers, then such benefits and sponsorship money and payments made is admission to a place of entertainment. It is apparent that in such scenario, the organizers are saving its expenditure on such services while organizing the events and thus earning profits. By virtue of definition of payment for admission in Section 2(m) of the Act, these certainly have to be considered as payments for admission in a place of entertainment. No one can be allowed to evade tax by camouflage. The definition of payment for admission in Section 2(m) of the Act is wide enough to include all payments by piercing the camouflage as also observed by the Apex Court in para 12 of M/s Geeta Enterprises (supra) where it has clearly held that even where the admission to an entertainment is free, "but if organizers derives some benefit in terms of money, it would be deemed to be an entertainment". 60. This Court in earlier challenge by FDCI in its judgment dated 30.04.2012 in para 16, has clearly held that "unless the terms and conditions of the sponsorship agreement are examined it may not be poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act does not specifically refer to the grant of a personal hearing. Secondly, all the points raised by the petitioner in support of the claim for exemption have been duly noted in the impugned order and taken into consideration by the competent authority. After taking into account all the relevant criteria and the submissions made by the petitioner, the competent authority has taken a decision to grant exemption to the petitioner from payment of entertainment tax only to the extent of 50% of the tax amount as a special case. In coming to this decision it seems to us that there is no flaw, irregularity or irrationality in the decision of the competent authority justifying interference under Article 226 of the Constitution of India. The relevant part of the impugned order which has been extracted by us hereinabove bear out the reasons for not accepting the claim of the petitioner in full. The petitioner has been treated fairly and objectively and we, therefore, decline to interfere. 23. In these writ petitions, interim directions were issued for deposit of tax as condition for issue of NOC for holding the events. The events were permitted to be held as the petitioners depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) which includes payments made "in any form". 65. The language of charging Section 6(6) of the Act further clarifies the intent of Legislature that the Section 2(m) of the Act is required to be given the widest possible interpretation to avoid the theft of tax. It is the charging Section and levy entertainment tax on every payment for admission to any entertainment. For the sake of repetition, Section 6(6) of the Act is reproduced herein:- "6. Tax on payment for admission to entertainment- (1) to (5) XXX XXX XXX (6) Where the payment for admission to an entertainment, referred to in sub-section (1), is made wholly or partly, by means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and on the amount of payment for admission, if any, made otherwise. 66. This clause levy tax on two types of payments. Firstly, on payments made in lump sum and secondly, on the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ospective effect or it was not so. 19. In Principles of Statutory Interpretation, 11th Edn., 2008, Justice G.P. Singh has stated the position regarding retrospective operation of statutes as follows: "The presumption against retrospective operation is not applicable to declaratory statutes. As stated in Craies and approved by the Supreme Court: 'For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error, whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a preamble, and also the word "declared" as well as the word "enacted".' But the use of the words 'it is declared' is not conclusive that the Act is declaratory for these words may, at times, be used to introduce new rules of law and the Act in the latter case will only be amending the law and will not necessarily be retrospective. In determining, therefore, the nature of the Act, regard must be had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an to the form. If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospectively. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended ... An amending Act may be purely declaratory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect (ibid., pp. 468-69). 21. Above being the position, the inevitable conclusion is that Explanation 4 to Section 271(1)(c) is clarificatory and not substantive. The view expressed to the contrary in Virtual case [(2007) 9 SCC 665] is not correct." 69. Also, in the case of ETO v. Ambae Picture Palace (1994) 1 SCC 209, the Hon'ble Supreme Court has clearly held that when the Parliament or State Legislature has the competence to legislate, they can do so prospectively as well as retrospectively and the taxation laws are no exception to this power. The retrospective effect of Explanation 2 does not mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The Act has also made the provision of Appellate Authority whose jurisdiction can be invoked against order of Commissioner. The Act thus provides sufficient mechanism and it cannot be said that there is no machinery provided for charging tax on payments, as envisaged in Explanation, received for admission to an entertainment. 72. I have given thoughtful consideration to the arguments of learned Senior Counsel of the parties. Their arguments in detail on this point are recorded by my learned brother in his order and therefore not repeated again. 73. Section 6 is the charging Section. Sub-section (1) of Section 6 of the Act makes it mandatory to levy entertainment tax on "all payments for admission to any entertainment". The language used is "there shall be levied". On imposing the definition of "payment for admission" in Section 2(m) of the Act, it is evident that all payments made in any form or be termed by any name either for seats or other accommodation in any form in a place of entertainment, the charge shall be levied on such payments which may be in terms of money or which could be in terms of benefits/services etc. as already discussed and it is the duty of organizer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... class 14. Total number of each kind of tickets printed for each class for each show 15. Name of place and date, if any, where shows were last held 16. Last serial number of each kind of ticket for each class and for each show issued at last place 17. The amount of security deposit if any, lying with the department if shows were held previously 18. The amount of arrears of tax, if any, to be deposited in respect of shows held previously 19. Manner and criteria of distribution of invitation cards 20. Outlets of distribution of invitation cards if distribution if on first come first serve basis 21. Specimen signature of the persons who own 22. Specimen signature of the person responsible for management 23. Additional information, if any, required by the Commissioner Date....... Signature..........." 76. The said Rule thus also distinguishes in the events which are ticketed and those which are non-ticketed, i.e., where the admission is by invitation. Here, it is important to note that pursuant to Sections 8 and 9, there is absolute restriction to entry to a place of entertainment (excluding those exempted under Sections 8 and 9) otherwise than on a ticket, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , goods or benefits or freebees. 79. It is also clear that Form 6, which is meant for non-ticketed events like the one held by FDCI, the organizer of an event is required to furnish wide arena of information like estimate of expenses with details, sources for meeting the expenses, name of sponsors and the amount sponsored by them, name of advertisers and the amount received from them, number of seats in each class, last serial number of each kind of ticket for each class and for each show issued at last place, the manner and criteria of distribution of invitation cards, outlets of distribution of invitation cards if distribution is on first come first serve basis and any other additional information, if any, required by the Commissioner. The list is exhaustive, wherein the organizer of an event can very clearly disclose sponsorship amounts received by him. He can also disclose the value of goods, which are not difficult to be valued. Also, it is noteworthy that even before the impugned Explanation 2, the Form 6 required the organizer of a non-ticketed event to disclose as per serial No.10 and 11 of Form 6, the name of sponsors and advertiser and the amount received from them. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if the admission is free of charge or on concessional rate. Where the admission is generally on payment, the tax has to be paid as if the entry was on payment of full charge. It therefore cannot be said that the Act does not provide sufficient machinery for levying tax. 84. Harmonious and effective interpretation is needed to be given to the provisions of a Statute, keeping in mind its prime object and the purpose. The Act prohibits the entry to any place of entertainment except as provided in Sections 9 and 10 of the Act and Section 2(m) of the Act defines payment for admission which definition is inclusive. The object and purpose of the Legislature for making the definition of Section 2(m) of the Act so broad and inclusive is to defeat indigenous methods adopted to avoid tax. The Hon'ble Supreme Court had also acknowledged this attitude of organizers that in order to avoid taxes, they tactfully invent new methods. In Amit Kumar (supra) case, the Hon'ble Supreme Court has come heavily on FDCI and while rejecting their contentions that entry by invitation cards was not 'payment for admission', the Hon'ble Supreme Court has held that though tickets may not have be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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