Case: Geeta Enterprises And Others Vs. State Of U.P. And Others

for admission includes:-"Any payment for a programme or synopsis of an entertainment.""Any payment for any purpose whatsoever connected with an entertainment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment ."Section 3 which is the charging section runs thus:-"There shall be levied and paid on all payments for admission to any entertainment a tax (hereinafter referred to as entertainment tax)."Section 3 of the Act which has been extracted above, clearly applies to the facts of this case because here the payment is based on lump sum basis calculated at the rate of SO paise per 30 seconds.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 s. 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 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 person who operates the machine and derives pleasure or entertained or that the operator who pays him self feels entertainment is wholly irrelevant in judging the actual meaning of the word entertainment as used in s. 2 (3) of the Act. So also the fact that the income derived from the show is shared by one or more persons who run the show.8. The Allahabad High Court in the case of Gopal Krishna Agarwal, v. State of Uttar Pradesh and Ors(1) which was also a case under the Act, held that entertainment tax was leviable on video games. The High Court has very carefully analysed sub-section 3 of s. 2 of the Act and the import o f the word entertainment and observes as follows:-"The context in which the word includes, has been used in the definition clauses of the Act does not indicate that the Legislature intended to put a restriction or a limitation on words like entertainment or admission to an entertainment or payment for admission. With the advance of civilization and scientific developments new forms of entertainment have come into existence. Video Games are probably the latest additions to the means of entertainment. These games require skill and precision as so many other games do. They are a source of amusement and enjoyment to those who participate in the games. Others who stand by and watch also derive some pleasure and amusement though not to the same degree. Admission to the premises where the Video Machines are installed may be free but payment is admittedly made if one wants to play the game. The money charged for use of the Video Machine is an admission to entertainment and the payment made by the person who uses the Machine is the payment for admission. In any case it is a payment for admission. In any case it is a payment connected with entertainment which a person is required to make as a condition of attending the entertainmentWe find ourselves in entire agreement with the observations of the Court and fully approve of the ratio decendi of this case. The Allahabad High Court has given almost the same reasons as given by us in the earlier part of the judgment.9. It is true that in the case of Harrish Wilson v. State of Madhya Pradesh and Ors.(1) the Madhya Pradesh High Court had taken a contrary view and held as follows:-"Therefore, what entertains a person in the video games parlour is his own performance and not the exhibition, performance, amusement, game or any sport offered by the petitioners. The payment made by a person to another to provide him with tools for deriving pleasure from his own performance with the help of the tools can not be held to be payment to that an other for admission to entertainment as contemplated by the Act. In our opinion, therefore, it cannot be held that the petitioners receive payment for admission to entertainment, when they collect amounts inserted by the persons in the slot."10. And the Gujarat High Court in N. T. Gursahaney v. State and Anr.(2) has taken a similar view. Apart from the wrong line of reasoning adopted by the Madhya Pradesh High Court it seems to have completely overlooked certain important aspects of the question which we have dealt with in our judgment. Moreover even the language of the charging provision of the Act which fell for interpretation in that case does not appear to be absolutely in pari-materia with t he language of the various sections of the U. P. Act. Even so the pivotal conclusions derived by the Madhya Pradesh High Court and the Gujarat High Court do not appeal to us. The mere fact that payment is not made at the time of entering the premises is irrelevant. Payment made at a later, stage by inserting a coin is nonetheless for being admitted to a place of entertainment. Thus the fee being charged in a different manner at a different stage is in any case for providing entertainment. We, therefore, with due respect to the High Courts, disapprove their decisions. Fo

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]And the Gujarat High Court in N. T. Gursahaney v. State and Anr.(2) has taken a similar view. Apart from the wrong line of reasoning adopted by the Madhya Pradesh High Court it seems to have completely overlooked certain important aspects of the question which we have dealt with in our judgment. Moreover even the language of the charging provision of the Act which fell for interpretation in that case does not appear to be absolutely in pari-materia with t he language of the various sections of the U. P. Act. Even so the pivotal conclusions derived by the Madhya Pradesh High Court and the Gujarat High Court do not appeal to us. The mere fact that payment is not made at the time of entering the premises is irrelevant. Payment made at a later, stage by inserting a coin is nonetheless for being admitted to a place of entertainment. Thus the fee being charged in a different manner at a different stage is in any case for providing entertainment. We, therefore, with due respect to the High Courts, disapprove their decisions. For the reasons given above we hold that the decision of the Allahabad High Court is correct and we hereby over rule the decisions of the Gujarat and Madhya Pradesh High Courts. In our opinion, the video show in the instant case is clearly exigible to tax under section 3 of the Act.It is true that in the case of Harrish Wilson v. State of Madhya Pradesh and Ors.(1) the Madhya Pradesh High Court had taken a contrary view and held aswhat entertains a person in the video games parlour is his own performance and not the exhibition, performance, amusement, game or any sport offered by the petitioners. The payment made by a person to another to provide him with tools for deriving pleasure from his own performance with the help of the tools can not be held to be payment to that an other for admission to entertainment as contemplated by the Act. In our opinion, therefore, it cannot be held that the petitioners receive payment for admission to entertainment, when they collect amounts inserted by the persons in the slot."