Case: THE STATE OF MAHARASHTRA &amp; ORS Vs. PAN INDIA PARYATAN LIMITED &amp; ANR

2. The writ petitioners own and run an amusement park within limits of Greater Bombay which was opened to the public for admission on 25 th December, 1989. They charged a lumpsum amount for admission and entertainment to the amusement park. In terms of the Act, the writ petitioners were required to pay entertainment duty3. In the writ petition before the High Court, the assertion of the writ petitioners was that on 4 th October, 1994, it sought confirmation that entertainment tax to be levied would be 3.75% of the value of a consolidated ticket. Such stand was accepted by appellant No. 2- The Collector, Bombay Suburban District. Later, vide communication dated 7 th January, 1995, the writ petitioners were informed that they would be required to pay duty @7.5% and not @3.75%. The writ petitioners challenged such demand by way of writ petition. The said writ petition was withdrawn with liberty to file a fresh petition4. The State sought to recover the entertainment duty @7.5% in respect of entry to the amusement park for the period from 16 th September, 1994 to 24 th December, 1994 and @15% from 25 th December, 1994. The writ petitioners paid the duty under protest. In a writ petition challenging the provisions of the Act, the writ petitioners sought refund of the duty paid5. The High Court found that the following questions arose for consideration:i. Rate of entertainment duty payable by the Petitioners for a period from 16 th September, 1994 to 24 th December, 1994ii. Rate of duty payable for the period commencing 25 th December, 1994. iii. Whether action of Respondents in seeking to recover duty payable during 25 th December, 1989 to 23 rd August, 1990 already adjusted against refund payable to Petitioners, is justified and valid in law. This question is raised by Writ Petition No. 2009 of 19987. The High Court held that entertainment duty to be levied for the amusement park is 50% of 15% i.e. 7.5% under Section 3(2) of the Act, therefore, in terms of Section 3(5)(a) and (b) of the Act, the entertainment duty is 50% of 7.5% i.e. 3.75%. The High Court held that such interpretation is on the basis of a cumulative reading of the provisions of the Act.

Court's reasoning:
12. We do not find any merit in the argument raised by learned counsel for the writ petitioners. In respect of first three years falling in Section 3(5)(a) of the Act, there is no dispute, as no duty is payable. The controversy revolves around the levy of entertainment duty for the fourth and fifth year and subsequently from the sixth year onwards. Sub-clause (ii) of Section 3(5)(a) contemplates that duty @50% under clause (b) of sub-section (1) or, as the case may be, sub-section (2) of Section 3 would be payable. In respect of the first part of sub-clause (ii) of Section 3(5)(a) of the Act, there can possibly be no dispute as the entertainment duty is 50% of 15% leviable under Section 3(1)(b) of the Act14. We find that the writ petitioners do not fall in any of the four categories as mentioned above. Category (a) is subscription or contribution in lump sum to any society. The expression Society is not defined in the Act. Therefore, Society would mean a Society registered under the Societies Registration Act, 1860 or other similar statutes. The writ petitioners would not fall in such category as the payment is not to any society. It is not the case of writ petitioners that they have issued a seasons ticket to the visitors. A Season ticket would mean a regular visitor visiting the amusement park regularly at a specific time15. Category (d), that entry would be on charging 50% of the duty fixed for any entertainment during a certain period of time, depends upon the decision of the State Government and/or Municipal Corporation to grant that relaxation to enable the writ petitioners or such other amusement park owners to charge duty at a lesser rateWe do not find any merit in the said argument. The amusement park is defined under Section 2(a-1) of the Act to mean a place wherein various types of amusements including games or rides or both are provided fairly, on a permanent basis, on payment for admission. The payment for admission is defined under Section 2(b) of the Act as the payment made by a person having admitted to one part of a place of entertainment and subsequently admitted to another part. Section 2(d) of the Act deals with admission to an entertainment which includes admission to any place in which the entertainment is held17. The argument that when a lumpsum amount is paid as a right of admission for all rides and games, then it becomes admission to series of entertainment, is not tenable. The writ petitioners issue one ticket including one or more rides or games situated in one compound. It is not the case of the writ petitioners that for every ride or game, it is charging separately. The admission to entertainment in terms of Section 2(d) of the Act includes all rides and games which are provided by the service provider. The series of entertainment as contemplated by Section 3(2) of the Act does not mean that on a single day ticket for one entry, it can be treated to be a series of entertainments. The series of entertainments can be where the facility for a game or ride is provided on multiple days and a combined ticket is issued for events for each day. It will only then be said to be series of entertainment18. Once an admission ticket is granted, it is not in terms of Section 3(2) of the Act but only in terms of Section 3(1)(b) of the Act. Section 3(2) of the Act has no applicability for a visitor to an amusement park who does not fall in any of the four categories mentioned in Section 3(2) of the Act. Since, the activities undertaken by the writ petitioners are not failing part of Section 3(2) of the Act, therefore, they are not entitled to rebate of 50% provided to specified category of persons in Section 3(2) of the Act19. Section 3(5)(a) of the Act has an overriding effect over Section 3(1) (b) and Section 3(2) of the Act. In respect of the first three years from the date of commencement of the amusement park, there is no issue as no entertainment duty is payable. But, in respect of the subsequent two years, the rate of duty leviable is under clause (b) of sub-section (1) or, as the case may be, under sub-section (2) of Section 3. Section 3(1)(b) of the Act is applicable to all amusement parks whereas Section 3(2) of the Act has a limited applicability only in respect of the specified categories therein. All amusement parks for all entertainment are not entitled to concessional duty in terms of Section 3(2) of the Act. Therefore, the writ petitioners cannot claim benefit under Section 3(2) of the Act. The argument is preposterous as the writ petitioners are firstly claiming the benefit under Section 3(2) of the Act and then under Section 3(5)(a) of the Act. The amusement parks would be entitled to only one benefit either under Section 3(2) or under Section 3(5)(a) of the Act. Since Section 3(2) is not applicable to all amusement parks for all other activities, therefore, the entertainment duty in terms of Section 3(5)(a) of the Act alone would be leviable. The duty under Section 3(2) of the Act would be leviable only in respect of specified categories mentioned therein.