89 CWP Noe7559of2009 Hllt IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARHe CWP No7559 of2009 DateofDecision 8 e012010 ECityProjects Construction Pvt Ltd 09e Petitioner Versus 0 C UnionTerritory and others I C5 I Z CORAM HONBLE MRJUSTICE MMKUMAR HONBLE MRJUSTICE JASWANT SINGH Presentl Mr RC DograSenior Advocate with Ms Balwinder Kaur Advocate for thepetitioner I Mr Amar Vivek Advocate for the 08 1 To be referredto theReporteror not e3 2 Whether the should be reported in theDigest07 mm Z JASWANT SINGHJe QW Theprayer in the instantwrit petitionOled under Article 226 of the Constitution is for quashingorder dated 1822005 P59 by EntertainmentTax OfOcerAssessingAuthorityUT the petitionersliability for a sum of Rs7946031 towards entertainment dutyunder the PunjabEntertainment Duty Act 1955 to UT 6forbrevityl55 Act9 in respectof year 200405upto31 December20041 hasbeenfound due furtherprayeris for declarationthat the activitycarried on by the petitioner ie offeringvideo gamesmachines is not exigibleto entertainment dutyas the Notiflcation dated2622004 6P69hasnot beenissued qua their activity Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 90 Ol CWP Noe7559of2009 H2H Factsin briefmaybe noticed as under Petitioner is a Companyunder the provisions of Act 1956 It is statedthat the petitioner runs the of a MallcumeMulti namelyFun Republicat Mani MajraUT wherein different typesof business activities are canied on playingof video games by the publicon the installed 16 1 machinesin a specifiedarea It is claimed that 16 video gamesmachines 0 hadbeen installed wef 722004 It appearsthat on an inspection carried 0 I on bythe official of the Excise and Taxation Department in the business C5 I premiseson 1012005 the activityofplayingofvideo gamesby members of the publicupon paymentof money was foundwithout paymentof Z entertainment dutyunder 1955 Act a show cause notice C dated 1912005 6P29was issuedby NoAssessing Authority I uponthe A replydated 1712005 6PAIwas flled by a5 the Nossessing Authority on the m basis of the reply information supplied and the documents and Z givenon 422005 passed assessment order dated 1822005 0P51 111 m of years 200405 ipto 31 December20049 It was not disputed beforethe Offlcer that membersofthe publicwere playing video on the installed machinesafter makingpaymentof Rs101 per game by insertioll of a coin in the machine It was also not disputedby the thata totalreceiptofRs4432801 duringthe Onancialyear 200405upto31 December 2004 had been and no dutyhad been paid AssessingAuthorityfound that the activityundertaken by the 811filledthe criteria laid down by Honble the Supreme Court inMls Geeta Enterprisesand Others v State ofUP and others 1198314 Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 91 9 1 6 CWP No7559 of2009 14311 SCC2002 and thus fell within the ambitof definition of Entertainment exigibleto entertalnment duty OfOcer determined thepayable entertainment dutyequalto Rs7946031 at the rate of 30Io on thegross receiptsHowever it appearsthat no Tax Demand Notice was issued in pursuanceofthe assessment order till April 2009 PetitioneraRer delayof four years has Oled the presentwrit 1 assessment order dated 1822005 6P59 on the petition 0 basis that the Notification dated2602004 6Pe69 iSSUedbYthe C I Administration under Sub Section 19of Section 3 C5 I of 1955 Act is not to the activityof the petitionerIt is also assertedby the that assessment order was reservedand thereafter Z it was neitherpassed in the presenceof of the petitioner nor r ever communicatedand servedupon thepetitioner I has filed a reply and taken a a5 objectionthat the impugned order dated 1822005 6P591S 7 under the provisions of Section 114 of 1955 Act within a Z of 30 daysof such order and no appealhavingbeen Oled againstthe tl orderit has attained finality The pleaof delayand laches has also been raisedwarranting dismissal ofthe writ petition Wehave heardlearnedcounselfor theparties at length Learned counsel for the petitionerhas contended that the 1 Notification2622004 P69 issued under Sub Section 19of Seclion 30f 1955Act is not to the activityof the petitioneras the same pertalns Cinema Entertainment Ithas funher been arguedthat no separate Notification regarding the chargingof entertainment duty on the games has been issued by the Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 92 e 11414 CWP Noe7559of 2009 under 1955 Act and therefore order dated 182005 P5I 1S liable to be set aside beingwhollywithout jurisdictionLearned counsel has also that the impugned order dated 1822005 P9 wasneitherservedupon the andno demandtax notice lll of Annexure P5 was issued became awareof the assessment orderonlyon 30A2009 upon the receiptofthe tax C demand notice dated 10A2009 and thereafterthe PresentWrit 0 C was filed raisingthequestions ofjurisdiction I Per contra learned counsel for the contendedthat C5 I the Notification dated 2622004 P69 issued by the Competent Z Authority in exercise under Sub Sectiorl9 of Section 30f 1955 Act whereby the rate of entertainmentdutywas reducedto 30Io was lly C to all other activities falling within the deflnition of I C45 Entertainmentbesides the Cinema activities Therefore no separate Notiflcationfor each activity was requiredHe has further raisedthepleaof nmw Z ofalternative remedydelayc laches Qw The objectionof delayand laches is not beingentertained because the in their replyhavenowherestatedthat as to how and lIl what manner assessment order had been served upon the petitioner it is also very difflcult to acceptthat the petitionerwould not be aware of such an assessment order after having in the However it is also not disputedlat till April 2009 no demandnotice in pursuanceof the assessment order had been served It is also an admittedcase bythepartiesthat in respectof assessment yearsno entertainmentdutyhas been paidnor any assessment havebeeninitiated Furtherno doubt an alternativeremedyin theshapeof Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 93 CWP Noe7559of2009 8514 an to be filed within 30 daysof such order under Section 114l of 1955Act is available and the writ petitionhas been Oled within 30 daysof of demand notice However instead of relegating the petitioner to availits alternativeremedywe have to decide the case since the of of Notification dated 2622004 369 and lack of jurisdiction in passingthe impugned assessment order r 6P59has been raised Therefore the preliminaryobjections raised are 0 rejected C We have givenour consideration to other rival C5 submissionsandthe pleadings of the partiesThe short issue raised bythe for our considerationis whetherthe Notication dated262004 Z Annexure P69 would be to the activitiesother than Cinema tr activities or not It would be for proper to refer I to the definition of entertainmentand levyof the Entertainmentdutyunder a5 1955Act Sub clause d9 of Section 20f 1955 Act defines entertainment w and Sub Section 619of Section 3 of 1955 Act levy of Z entertainment duty which readsas under tl includes any exhibition amusement game sport or race to which persons are ordinarilyadmitted on paymentor exhibition of films or movingpicturesor seriesofpictures which are shown on the 56 1 televisionreceivingset with the aid of any type of antenna with a cable net work attachedto it or cable television for which persons are requiredto make paymentby way of contribution or subscriptionor installation and connection chargesor any other chargescollected in any manner whatsoever 3 Duty on paymentsfor admission to entertainmentse A person admittedto an entertainmentshall be liable to pay Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 94 CWP Noe7559of 2009 868 an entertainment dutyat a rate lnotexceeding one hundred and twentyflve per centum of the paymentfor admissionl which theGovernmentmay specifyby a notificationin this behalf and the said dutyshall be collected bythe proprietor andrenderedto the Governmentin the manner A plainreadingof definition of entertainmentreveals thatthere aretwo parts concerningthe definition of entertainmentwhich is extensive r in nature First part relates to any exhibition amusement 0 sport or race to which a personis ordinarilyadmittedon paymentand C I the secondpartrelatesto exhibition of fllms or picturesnovingor series9 C5 OIl televisionsets for which personsare to make paymentin the 1 modes In thepresentcase we are concernedwith the first partof Z the definitionwhich relates to the activityundertakenby the petitioner namelyplayingof video gameson machinesbyinsertionof coin I ofdenominationofRsOl bythe membersof public It has beenadmitted C45 bythe in their replydated 172005 6PA9to the show 7 notice 6P2 well as in the statement 1012005 0l of Sh cause as Z Kumar Team Coordinator Finance of the Companythat wef Om 72200416 video gamesmachineshad beeninstalled in thepremises ofthe which are open to the membersof publicfor playing videogameson insertion ofcoins ofthe denominationofRs101 per game The amount ofrevenue from thesegameshasalso beenadmitted It has not been disputed 111anymanner by the learned counsel for the petitionerthatthe activityundertakenby the petitioner is fullycoveredby the testl criteria laid down byHonble the SupremeCourt in Mls Geeta Enterprisesscase supral so as to be covered under the deftnition of Entertainment What has been urged1S the of the Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 95 CWP Noe7559of2009 14714 dated 2622004 6P69to such activityundertaken by the A readingof Sub Section 619of Section 30f 1955 Act makes it clear that an entertainmentdutybecomespayable the momentthe person is admittedto an and at such rates which theGovernment may speci67by Notication which cannot be more than 1 rl one hundredand twentyfive per centum of the amount paidby the person 0 foradmission to such an entertainment It is further clear that such duty C0 I which becomes has to be collected bythe proprietor and rendered C5 I to theGovernmenin the manner In thepresentcase it has not beendisputedthat 1955 Act is to UT What has Z beencontended is that the contents of Noti8cation dated 2622004 tC AnnexureP69 do not relate to activities like the video games etc and I therefore no entertainmentdutycan beleviedand collected We are a8aid C6 that theargumentis whollymisconceived Entertainmentduty becomes 1 mn payable on any activity beingundertakenanywhere whenever a person 1S Z admittedto suchactivitywhich falls within the de8nition of entertainment 0 No separateNotification with regardto actlvltleS 1S envisagedunder the of 1955Act Whatis provided under Sub Clause 61 ofSection 3 0f1955 Act byissue ofNotiflcation bytheGovernment is therate ofdutyto be chargedwhich in any case lS not to exceedone hundred and twenty 1 fiveper cent ofthe paymentofadmission charges of entertalnment Administration by issue of Annexure P6 has only the rate of dutyto 30Io instead of existing 50010 on all publicClnema exhibitionsor any other entertainmentplace fallingin the area of Union Territory It has been specifically Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 96 1 CWP Noe7559of 2009 11811 that new rate of30Io dutyis applicable to any otherentertainment placebesidesthepublicCinema exhibitionsin the area of UT Thusit would mean that the activities like the one undertakenbYthe would be exigibleto entertainment dutyat 30Io wef 262004 date of issue of Notiflcation P61 Thus it can be concluded that Notificationdated 2622004 AnnexureP69is fully to the case 1 ofthe makingit liable to pay Entertainmentduty The 0 legalpositionregardingexigibilityto Entertainmentdutyon video games 0 locatedin video areas hasbeen reiteratedbyHonble the C5 I Court in Standard Games and Others Ve State of UeP and Others 19961 4 SCC 467 and State of MP and Another v Abha Sethi Z Smt199914 SCC 32 C No otherpointhasbeenurged I In view of the aforesaid discussion we find no merit in the 08 instantpetitionhencethe same is dismissed mW3 We are constrained to observe about the functioning of the Z offtcials of the Administration A huge Entertainmentdutyliabilityof the was assessed on 182005 and directions were issued to issue a tax demand notice However till April 2009 no suchdemand notice was issued for reasons best known to them In the replyfiled by the Departmentno speci6c 4 avermentshave been made with regardto the manner of service of the order Despitea clear flndingin the assessment order in respect of year 2004e05 6upto31 December 20049regardingliabilityto pay Entertainmentdutyno stepswere takenfor framing assessment andrealization for the years The situalion is deplorableWe Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document 97 CWP No7559 of 2009 14914 that some remedial stepswould be takenbyAdministration A fact inquiryshall be held by flxingliabilityof the ofcer who has of his dutyto helpthe petitionerThe needful shall bedone within threemonths and a copy of thereportbe placed on record We furtherdirectthat a copy of this order be sent to the Administrator UT 1 C ema 0 1 MMKumarl 3 Judge I C5 8 012010 manoJ Z t l4 l I 08 r ve Z Rawat Seema 2014.03.28 10: 45 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:54 I attest to the accuracy and integrity of this document