IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.10.2008 C O R A M : THE HONOURABLE MR. JUSTICE K. CHANDRU W.P.Nos. 16414, 20698, 20709, 20710 of 1998 & 4282 & 4284 of 1999 and 5597 of 2000 Black Thunder Theme Park Private Limited, rep.by its Managing Director, A.Joseph Louis, No.2, Odanthurai Village, Ooty Main Road, Mettupalayam. .. Petitioner in WP.16414 of 1998 Amusements & Picnic Resort ( P) Ltd.rep.by Director Mr.N.E.Fernando 162, Linghi Chetty Street, Chennai-600 001. .. Petitioner in WP.20698 of 1998 MGM Diamond Beach Resorts (P) Ltd., rep.by Chief Executive Mr.M.G.M.Maran, 1/74, Mahabalipuram Road, Muttukadu, Chengai MGR District PIN-603 112. .. Petitioner in WP.20709 of 1998 Navodaya Mass Entertainment s Ltd. Varadarajapuram, Darkas, Ward II, Chennai-600 044, rep.by Chairman M.C.Punnoose. .. Petitioner in WP.20710 of 1998 VGP Golden Beach Resort Ltd. Rep.by Director Mr.V.G.S.Rajesh Injambakkam, Chennai-600 041. .. Petitioner in WP.4282 of 1999 VGP Housing Private Ltd. Prop.VGP Universal Kingdom Rep.by Director Mr.V.G.S.Rajesh Injambakkam, Chennai-600 041. .. Petitioner in WP.4284 of 1999 Maharani Amusement Park (P) Ltd. 27-B & C South Chitrai Street, Madurai-625 001, rep.by Director I.Manohar .. Petitioner in WP.5597 of 2000 https://hcservices.ecourts.gov.in/hcservices/ -vs- State of Tamil Nadu, rep. by Secretary to Government, Law Department, Chennai-9. .. Respondent in all the writ petitions. PRAYER : Petitions filed under Article 226 of the Constitution of India praying for the issuance of a writ of declaration declaring the Tamil Nadu Entertainment Tax Amendment Act 32 of 1998 as unconstitutional, null and void, ultra vires the Tamil Nadu Entertainment Tax Act, 1939 and otherwise unsustainable in law in so far as the petitioner is concerned. For petitioners :: Mr.P.R.Raman For respondents :: Mr.Haja Nazirudeen, Spl.G.P.(T) O R D E R All these seven writ petitions are filed by the owners of various Theme Parks or Amusement Parks run in the State of Tamil Nadu. In these writ petitions, they have challenged the vires of the Tamil Nadu Entertainment Tax Amendment Act 32 of 1998 and for a declaration that it is unconstitutional and ultra vires the Tamil Nadu Entertainment Tax Act, 1939 (for short, 'the Act'). 2. These writ petitions were admitted on various dates. However, the petitioners are not enjoying any interim order. In fact, this Court by a reasoned order dated 10.4.2000, dismissed the application for injunction sought for by the petitioners. A detailed common counter affidavit, dated 31.8.1999 has been filed on behalf of the respondent State. 3. By the Amendment Act 32 of 1998, Section 3(2A) was introduced into the Act defining the term ''amusement'', which reads as follows :- ''3. Definitions. - In this Act, unless there is anything repugnant in the subject or context - .. .. .. (2A) ''amusement" means any amusement, for which persons are required to make payment for admission to any amusement arcade or amusement park or theme park or the like by whatever name called." 4. Section 3(4) defining the term "entertainment" has also undergone change by the Amendment Act, which reads as follows:- https://hcservices.ecourts.gov.in/hcservices/ ''3(4). ''Entertainment" means a horse-race or cinematograph exhibition to which persons are admitted on payment; or television exhibition for which persons are required to make payment by way of contribution, or subscription, or installation or connection charges or any other charges collected in any manner whatsoever or an amusement or a recreation parlour where a game such as bowling, billiards, snooker or the like is provided." 5. Section 4-F is the charging provision levying tax of 20% on each payment for admission to an amusement and it reads as follows:- ''4-F. Tax on amusement. - (1) Notwithstanding anything contained in Section 7, there shall be levied and paid to the State Government a tax (hereinafter referred to as the entertainment tax), calculated at twenty per cent on each payment for admission to an amusement. (2) The tax levied under sub-section (1) shall be recoverable from the proprietor. (3) The provisions of this Act (other than Sections 4 4-B, 4-D, 5, 5-A, 5-B, 5-C, 5-D, 5-E, 5-F, 5-G, 6(1) and 7) and the rules made thereunder shall, so far as may be, apply in relation to the tax payable under sub-section (1)." 6. Pursuant to the amendment, demand notices were sent by various Commercial Tax Officers demanding payment of Entertainment Tax as per law. The petitioners have raised the contention that since Entry 33 under List 2 of Schedule 7 of Constitution of India talks about sports, entertainments and amusements, which were made subject to the provisions of Entry 60 of List I, where the word "amusement" was also found, whereas, under Entry 62, the State is empowered to impose tax on luxuries including taxes on entertainments, amusements, etc. Hence, the words ''entertainment and amusement" should be made separate and distinct. The expressions ''amusement or entertainment" are intended to cover an audience or a spectator related activity and not to include activities performed by a person for the enjoyment or amusing himself. 7. By relying upon certain English decisions, it was sought to argue that there is a distinction between ''amusement" and ''entertainment". When the petitioners are providing only facilities and the persons are enjoying such facilities, the same thing cannot be subjected to an entertainment tax. The legislative entry should not have any meaning from common parlance, but it should have a legislative definition. The definition ''amusement" introduced by the Amending Act was an arbitrary definition. 8. In reply to these allegations, in paragraphs 10 and 11 of the counter affidavit, it is stated as follows:- ''10. As regards the contention raised in paragraph (G) https://hcservices.ecourts.gov.in/hcservices/ of the affidavit, it is respectfully submitted that Section 2 of the Tamil Nadu Entertainment Tax (amendment) Act, 1998 (Tamil Nadu Act 32 of 1998) defines amusement as any amusement for which persons are required to make payment for admission to any amusement arcade or amusement park or the like by whatever name called. From a careful reading of the above definition, it would be clear that the legislature has specifically by mentioning the words ''any amusement" thought fit only to impose tax on amusement and not on any other activity which is remotely connected with amusement for which a person is charged for in such amusement arcade or amusement park. Further, the intention of the legislature as a legislative policy is borne out by the fact that the Tamil Nadu Act 32 of 1998 seeks to levy tax only on amusement provided by the class of persons who exclusively run and establish arcades, parks etc. for providing amusement by collecting a payment for admission. Apart from the sources provided for amusement, if the petitioners carry on any other activity which do not fall within the meaning of amusement, the same will not attract tax liability under the Entertainment Tax Act. The legislature has used the words Amusement Arcade or Amusement Park or Theme Park or by whatever name called as they are referred and called in common parlance and as such, there is no necessity to define the areas in particular unless there exists some ambiguity that is capable of giving room for misunderstanding of the provision. The present section is sufficiently clear that is only the amusement-oriented activity that is subject to taxation. 11. It is further submitted that the legislature has been cautious while defining amusement in section 2 of the Tamil Nadu Act 32 of 1998 by using the adjective ''amusement" and ''Theme" preceding the words Arcade and Park. Similarly, the legislature is also conscious and deliberate in not including any or every area or place where amusement is provided which would mean to include all the activities carried out by the citizens of the State as mentioned in para (H) of the affidavit of the petitioner. In this regard, it would be relevant to state that the activities as narrated by the petitioner such as use of clubs, Gymnasiums, swimming pools, Golf courses, etc. Visiting libraries, exhibitions, trade fairs, visiting parks, jungle resorts for animal rides, zoos or indoor games facilities on payment of admission charges cannot be understood or recognised as activities solely providing amusement and people undertake such activities or visit such places for varied reasons. The nature of activities referred above enable learning of a game or sport, provide for a past-time inculcate social habits, maintenance of good health and well being and such other benefit enuring https://hcservices.ecourts.gov.in/hcservices/ therefrom. However, these activities apart from being helpful in achieving the abovesaid purposes incidentally do provide some amusement but qualitatively they are different from the kind of amusement provided by the petitioners. When the legislature has defined it with a definite intent, the allegation of the petitioner that if a wider arbitrary definition to amusement is to be accepted all the aforesaid activities are liable to be charged with entertainment tax is total misapprehension of the impugned enactment. 9. In the light of the stand taken by the respective parties, it has to be seen whether the Amendment Act suffers from any constitutional vice. In so far as the power of the State to subject persons to entertainment tax is concerned, Entry 62 of List 2 is relevant and it reads as follows:- ''62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling." 10. Even a plain meaning will make it clear that the petitioners' activities will be covered within the definition of the word ''amusement". The Concise Oxford English Dictionary defines the terms ''amusement", ''amusement arcade" and ''amusement park" as follows:- ''Amusement : The state or experience of finding something funny; the provision or enjoyment of entertainment; a game machine or other mechanical device for providing entertainment". ''Amusement Arcade : An indoor area containing coin-operated game machines." ''Amusement Park : A large outdoor area with fairground rides and other entertainments. (see: 11th Indian Edition 2007. O.U.P) Therefore, it is too late for the petitioners to challenge the levy of entertainment tax on the admission fee charged by the petitioners. 11. Once there is a legislative entry provided under Article 246 of the Constitution, it is open to the State to levy tax with reference to the entry. The Supreme Court, in its judgment in Indian Express Newspapers (Bombay) (P) Ltd. -vs- Union of India reported in (1985) 1 SCC 641, dealing with the power of the State to levy taxes, observed as follows:- ''Taxation is the legal capacity of sovereignty or one of its governmental agents to exact or impose a charge upon persons or their property for the support of the Government and for the payment for any other public purposes which it may constitutionally carry out." 12. It is not open to the petitioners to contend that they are only providing facilities and it cannot be an amusement coming under Entry https://hcservices.ecourts.gov.in/hcservices/ 62, List-II of Schedule VII. In fact, more or less a similar contention, which had been raised in respect of entertainment tax regarding cinemas, was repelled by the Supreme Court in Y.V.Srinivasamurthy and others -vs- The State of Mysore and another reported in AIR 1959 SC 894. Para 3 of the said judgment may be usefully extracted below:- ''3. It is only necessary here to refer to an additional argument that was advanced by learned counsel for the appellants before us in support of his contention. He drew our attention to Entry 33 of List II of the Seventh Schedule to the Constitution which runs as follows: “Theatres and dramatic performances; cinemas subject to the provisions of Entry 60 of List I; sports, entertainments and amusements.” He contends that that entry covers laws made with respect to each of the items as a separate subject, but points out that Entry 62, which has been quoted above, permits imposition of tax only on luxuries including taxes on entertainments, amusements, betting and gambling. Learned counsel concludes that law made with respect to Entry 62 cannot permit imposition of taxes on cinemas, for the word “cinemas” mentioned in Entry 33 has been omitted from Entry 62. We do not thick there is any substance in this argument. Learned counsel agrees that the words “entertainments” and “amusements” are wide enough to include theatres, dramatic performances, cinemas, sports and the like. If his argument is correct, then, on a parity of reasoning, the State Legislature will have no competence to enact a law imposing a tax on theatres or dramatic performances or sports, for none of those words are mentioned in Entry 62. This is sufficient to repel this argument. The truth of the matter is that “cinema” had to be specifically mentioned in Entry 33 of List II in order to avoid any possible conflict between it and Entry 60 in List I. 13. While defining the term "entertainment", a Division Bench of Madhya Pradesh High Court in Calico Mills Ltd. -vs- State of M.P. reported in AIR 1961 Madhya Pradesh 257 has dealt with the issue in some detail. The passage found in para 6 may be usefully extracted below:- ''6. The natural import of the term 'entertainment' is amusement and gratification of some sort. The term connotes something in the nature of an organised entertainment. This is evident from the fact that the Act was enacted to provide for the levy of a duty in respect of admission to theatres, cinemas and other places of public entertainment. Therefore, an entertainment to come within the definition of section 2 (b) and of the provisions of the Act must be some exhibition, performance, amusement, game or sport for the purpose of entertainment, that is, for affording some sort of amusement and gratification to those who see or hear it." (Emphasis added) https://hcservices.ecourts.gov.in/hcservices/ 14. In the light of the same, the challenge to the constitutional validity must necessarily fail and accordingly all the writ petitions will stand dismissed. There will be no order as to costs. Sd/- Asst. Registrar /true copy/ Sub Asst. Registrar js To The Secretary to Government, Law Department, Fort St.George, Chennai-600 009. 7 cc to Mr.P.R.Raman, Advocate, SR.NO.59389 to 59895 1 cc to spl.Government Pleader(T), SR.NO.59029 W.P.Nos.16414, 20698, 20709, 20710 of 1998 & 4282 & 4284 of 1999 and 5597 of 2000 KGK(co) em/10.11.08 https://hcservices.ecourts.gov.in/hcservices/