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PETITIONER: OM PRAKASH PURI ANR.

       Vs.

RESPONDENT: STATE OF WEST BENGAL AND ORS.

DATE OF JUDGMENT16/02/1991

BENCH: SAIKIA, K.N. (J) BENCH: SAIKIA, K.N. (J) PUNCHHI, M.M.

CITATION:  1991 SCR  (1) 465        1991 SCC  (2) 172  JT 1991 (1)   493        1991 SCALE  (1)235

ACT:      Constitution of India, 1950: Article 14-Section 3 and 4 of the West Bengal Entertainments and luxuries (Hotels   and Restaurants)   Tax  Act,  1972-Whether  discriminatory   and violative of.      West  Bengal Entertainments and Luxuries  (Hotels  and Restautants) Tax Act. 1972: Sections 3 and  4-Constitutional validity of.

HEADNOTE:      Under  the  West  Bengal  Entertainments  and  Luxuries (Hotels  and Restaurents) Tax Act, 1972 as amended in  1974, the  appellants were called upon to make ad-hoc  payment  of luxury tax calculated at Rs.2,40,000.  A representation from the Hotel Association to the Respondents having being turned down,  the  appellants filed Writ Petition before  the  High Court, challenging the constitutional validity of the Act.      The Writ Petition was dismissed by a Single Judge.   On appeal,  the  Division Bench declined to  interfere  holding that  there  was  no dicrimination, and thus  there  was  no violation of Article 14 of the Constitution.  Aggrieved, the appellants preferred the present appeal.      Dismissing the appeal, this Court,      HELD: 1. The Luxury Tax charged under Section 4 of  the West   Bengal  Entertainments  and  Luxuries   (Hotels   and Restaurants)  Tax  Act, 1972, is not discriminatory  and  is constitutionally  valid  for  the  reasons  stated  in   the judgment of this Court in a similar matter wherein the  same contentions were urged. [467E-F]      M/s.  Spences Hotel Pvt. Ltd. & Anr. v. State  of  West Bengal and Ors., [1991] 1 SCR applied.      2. Whatever has  been stated by this Court in  relation to  Section  4  of the Act would be  equally  applicable  to Section 3 of the Act. [467F]      East  India  Hotels Ltd. v. State of West  Bengal,  AIR 1990 SC 2029, relied on.                                                        466

JUDGMENT:      CIVIL  APPELLATE  JURISDICTION: Civil Appeal No.  4  of

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1977.      From  the  Judgment and Order dated 3/4.3.1975  of  the Calcutta High Court in Appeal No. 156 of 1974.      G.L.  Sanghi, Dhruv Mehta, Aman Vachhar and S.K.  Mehta for the Appellants.      Tapas Ray and G.S. Chatterjee for the Respondents.      Harish  N. Salve, Lalit Bhasin, Ms. Nina  Gupta,  Vibhu Bhakru, Pranab Mullick and Vineet Kumar for the intervener.      The Judgment of the Court was delivered by      K.N. SAIKIA, J. This appeal by certificate is from  the Judgment of the Calcutta High Court dated 4.3.1975 passed in appeal No. 156 of 1974.      The  appellants  in partnership have been  carrying  on business of restaurants under the name and style of Trinca’s at No. 17B, Park Street Calcutta, providing food and  drinks (alcohol  and  non-alcohol)  to the  customers  under  valid licences.  Sometimes musical performences are also arranged. The restaurants are provided with air conditioning plant.      Under  the  West  Bengal  Entertainments  and  Luxuries (Hotels and Restaurants) Tax Act, 1972 as amended by the Act of   1974,  hereinafter  referred  to  as  ’the   Act,   the respondents  by  their Memo No.  4942/A.T.  dated  9.12.1972 called upon the appellants to make ad hoc payment of  luxury tax  calculated  at Rs.2,40,000.00.  The  President  of  the Hotelers’  Association  made a representation  against  this illegal  tax which was turned down by the  respondents,  and thereafter  the appellants challenged the validity  of  this action  in the Calcutta High Court by filing  Writ  Petition No.  358  of 1973 on 16.5.1973.   The  appelants  contended, inter  alia  before  the  High  Court  that  the  levy   was unreasonable restriction on carrying the business; that  the levy was unreasonable restriction on carrying the  business; the  Act was not meaningful and purposeful; the  rules  were confiscatory  in  nature;  and the mode  of  the  Act.   The learned  Single Judge of the High Court dismissed  the  writ petition relying on the Judgment passed on 6.3.1974 in  Writ Petition  No. 338 of 1973 wherefrom Civil Appeal No. 406  of 1976 was filed in this Court.                                                        467      From  the above order of the learned Single Judge,  the appellants filed Appeal No. 156 of 1974 on 26.6.1974  before the  Division  Bench of the Calcutta High  Court  contending that  the legislature cannot enlarge the scope of  Entry  62 and  seek  to  impose a tax on  expenditure  incurred  by  a customer  on  services rendered to him  including  food  and drinks.    The  High  Court  held  that  s.   2(b)   defined entertainment tax but s. 2(c) defined entertainment tax  and under the Act entertainment tax meant tax payable under s. 3 of  the  Act.   A clear distinction had  been  made  between entertainment  and  entertainment tax and in this  case  the High  Court  was concerned only with  entertainment  tax  as defined  in s. 2(C).  The second submission before the  High Court  was whether the State legislature had the  competence to  impose entertainment tax payable under s. 3 of  the  Act and  the  High  Court held that s. 3 was a  valid  piece  of legislation.   The argument of the appellants was  that  tax imposed by s. 3 was discriminatory and it violated Art.   14 of   the  Constitution.   The  High  Court  held  that   the differentia  made  in s. 3 had a rational  relation  to  the object  sought  to  be achieved by the  statute.   The  last submission  was  whether  the  persons  enjoying  the   same facilities  had been treated differently as the section  had imposed  a maximum tax of 15% on amount paid or  payable  by the customer.  The High Court held that since a  distinction had  to  be  maintained between s. 2(b)  and  s.  2(c),  the

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learned  counsel’s argument on discrimination could  not  be acceded  to.   The  appeal was  accordingly  dismissed,  but certificate of fitness to appeal was granted.      The  contentions raised in this appeal are the same  as were  raised in Civil Appeal No. 406 of 1976 whcih has  just been dismissed.  In East India Hotels Ltd. v. State of  West Bengal,  AIR 1990 SC 2029 this Court held that whatever  has been said by this Court in relation to s. 4 of the Act  will be equally applicable to s. 3 of the Act. Consequently,  for the above reason and for the reasons stated in our  Judgment in Civil Appeal No. 406 of 1976, we dismiss this appeal also with costs quantified at Rs.5,000 (Rupees five thousand). G.N.                                       Appeal dismissed.                                                     468