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PETITIONER: MARKAND SAROOP AGGARWAL AND ORS.

       Vs.

RESPONDENT: M. M. BAJAJ AND ANR.

DATE OF JUDGMENT15/09/1978

BENCH: KAILASAM, P.S. BENCH: KAILASAM, P.S. SINGH, JASWANT

CITATION:  1979 AIR  110            1979 SCR  (1) 784  1979 SCC  (1) 116

ACT:      Admission charges  ’on per  head’ basis  to the nightly dinner-cum-cabaret    programmes,    whether    liable    to entertainment tax-United Provinces Entertainment and Betting Tax, 1937  (as extended to Delhi) Sections 2(1)(c), 3(1)(3), 4(1) and 5(3).

HEADNOTE:      The appellants  are five  partners of  Lido Restaurant, New Delhi  and they  charged ’on  per  head’  basis  in  the nightly dinner-cum-cabaret programmes. A complaint was filed by the  Entertainment Tax  Inspector on behalf of the State, against them  on the  ground that  they had  contravened the provisions of Section 4(1) and with Section 3(1) and Section 3(3) of  the U.P. Entertainment and Betting Tax Act, 1937 as extended to  Delhi and  punishable under Section 5(3) of the Act. The  Trial Court  acquitted the  accused on  the ground that no  offence  against  them  had  been  established.  On appeal, the  High Court  found them  guilty of  the offences with which  they were charged, allowed the appeal, set aside the order  of acquittal  and imposed a fine of Rs. 40/- each on the  five partners  of the Lido Restaurant directing that the fines  be paid  in addition  to the  tax leviable  under Section 3 of the Act.      Dismissing the appeal by special leave, the Court ^      HELD  :  1.  The  United  Provinces  Entertainment  and Betting Taxes  Act, 1937  (as extended to Delhi) is wider in scope and in application. The definition of ’admission to an entertainment’ in  S. 2(1)  and ’payment  for admission’  in Section 2(6)  and used  in Section 3(1) are widened so as to embrace payment for any purpose whatsoever connected with an entertainment  and   admission  to   place  in   which   the entertainment is held. [789G-H, 790A]      2.  Admission   to  an   entertainment  would   include admission to  any place  in which  entertainment is held and payment for  admission would  include any  payment  for  any purpose whatsoever  connected with  an entertainment which a person is  required to  make as  a condition of attending or continue to  attend the  entertainment. Cabaret  show is  an item of entertainment. [787G-H]      3. On the facts of the case it would be an admission to

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an entertainment.  Though it may be for taking tea or dinner for a  minimum charge,  as the admission is to a place where the  entertainment   is  held,  it  would  come  within  the definition under  section 2(1).  Further, the payment of Rs. 5/- or Rs. 10/- though it is stated to be for the dinner, as it is  connected with  an entertainment and as the person is making  the   payment  as   a  condition  for  attending  or continuing to attend the entertainment, it would attract the definition of  payment for  admission under section 2(6)(iv) of the Act. [788G-H, 789A]      Williams v.  Wright, [1897]  13 T.L.R. 551, Kitchner v. Evening Standard  Co. Ltd., [1936] 1 K.B. 576 and J. Lyons & Co. Ltd. v. Fox, [1919] 1 K.B. 11; discussed and quoted with approval; 785      Attorney General  v. London  Casing Ltd.,  [1937] 3 All E.R. 858; explained and applied.      Attorney General  v. Mcleod, [1918] 1 K.B. 13, Attorney General v.  Swan, [1922]  1 K.B.  682, Attorney General Arts Theatre of  London Ltd.,  [1933] 1  K.B.  439  and  Attorney General v.  South port  Corporation, [1933]  All  E.R.  971; referred to.

JUDGMENT:      CRIMINAL APPELLATE  JURISDICTION :  Criminal Appeal No. 368 of 1976      Appeal by  Special Leave  from the  Judgment and  Order dated 17-2-1976  of the  Delhi High Court in Criminal Appeal No. 141 of 1971.      Frank Anthony and N. C. Sikri for the Appellant.      S. N. Anand and R. N. Sachthey for Respondent No. 1      The Judgment of the Court was delivered by      KAILASAM, J.  This appeal  is  preferred  by  the  five partners of Lido Restaurant, Connaught Circus, New Delhi, by special leave  against the  Judgment and  order of  the High Court of Delhi in Criminal Appeal No. 141 of 1971.      A  complaint   was  filed   by  the  Entertainment  Tax Inspector on  behalf of  the  State  in  the  court  of  the Judicial Magistrate,  First Class, against the appellants on the ground  that they  had  contravened  the  provisions  of section 4(1)  read with section 3(1) and section 3(3) of the U.P. Entertainment and Betting Tax Act, 1977, as extended to Delhi and  punishable under  section 5(3)  of the  Act.  The trial court  acquitted the  accused on  the ground  that  no offence against  them had been established. On appeal by the Entertainment Tax  Inspector, the  High Court found that the appellants were  guilty of the offences with which they were charged,  allowed   the  appeal,  set  aside  the  order  of acquittal and  imposed a  fine of  Rs. 40/- each on the five partners of  the Lido Restaurant and directed that the fines be paid  in addition  to the tax leviable under section 3 of the Act.      P.W. 3,  Bodh Raj,  was the entertainment tax inspector at the  material time.  On 15th  November  1968,  under  the instruction of  his superior  officer, he  went  along  with Bajaj,  P.W.5,   inspector,  and  visited  Lido  Restaurant, Connaught Circus,  at 10 P.M. and remained in the Restaurant till  11.15   P.M.  Cabaret   programme  was  given  in  the restaurant and  a band  was in  attendance. P.W. 3 contacted the manager  and recorded  a statement  which is Ex. B.1, in which the manager, V. N. Sood, stated that they were holding cabaret programme  from 5th November 1968 daily and that the service is  effected on  an a  la carte  basis. The  minimum

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charges for eatables at the time of 786 cabaret are  Rs. 5/-  at evening tea, and Rs. 10/- at dinner time from 10 P.M. onwards. According to his statement, there was no  admission charge  or fee  of any  kind. P.W.  3 also examined cash  memos and  found at that time 72 persons were present in the restaurant for taking dinner. The evidence of the inspector is that no charges for entry to the restaurant was collected  except a  minimum charge  of Rs.  5/- for the evening and  Rs. 10/-  for the  night which  was  adjustable towards the  food. The Accountant of the restaurant, who was examined as  P.W. 4, explained that they were collecting the charges for  the  food  consumed  by  the  customer  in  the restaurant and no money was being charged for cabaret or any other type  of entertainment.  The evidence  of P.W.  5, the inspector, Entertainment  Tax, is that a sum of Rs. 10/ were the minimum charges for the food including band performance. A sum  of Rs.  10/- were  charged on  per head basis, in the nightly dinner-cum-cabaret programme.      On the evidence adduced, the trial court found that the cabaret performance  in a  restaurant is essentially an item of entertainment.  It also  found that  Rs. 5/- and Rs. 10/- were minimum charges for the afternoon tea and dinner. It is also clear  that these  amounts were  adjusted  towards  the eatables  that  were  consumed.  It  is  not  the  case  for prosecution that  the price  of eatables were raised for the purpose of  covering the  entertainment, but it is seen from the admission  of the  manager as  well as  the evidence  on record that  whether a  person consumed  anything or not, he had to  pay Rs.  5/- for  the evening  and Rs.  10/- for the night. If  he consumes eatables for more than Rs. 5/- in the evening and  for more than Rs. 10/- in the night, the amount of Rs.  5/- and  Rs. 10/-  paid by him would be adjusted. On these facts,  the question  arose whether  any charges  were collected for  the cabaret  entertainment. The  trial  court came to  the conclusion that nothing was charged for cabaret performance and  the minimum  charges had only been fixed so that no undesirable element can get into the restaurant. The High Court came to a different conclusion and found that the idea behind the requirement of payment of minimum charge was to cover  the cabaret  programme and therefore would attract entertainment duty payable under the law.      In  order   to  decide   the  question,   the  relevant provisions of  the law  under which  the accused are charged will be  referred to. The United Provinces Act 8 of 1937 was passed on  22nd October  1937 for  the purpose of imposing a tax on  entertainment and  other amusements  and on  certain forms of  betting. Section 3(1) provides that there shall be levied and  paid to  the Central  Government on all payments for admission  to any  entertainment,  a  tax  at  the  rate specified in the section. 787 Section  3(3)   provides  for   amounts  payable   on   lump subscription or  contribution or  on season ticket and other matters which would be referred to a little later.      Section 4(1) runs as follows:-           "4.(1) Save  as otherwise provided by this Act, no      person, other  than a  person  who  has  some  duty  to      perform in  connection with the entertainment or a duty      imposed upon  him by  law, shall  be  admitted  to  any      entertainment, except  with a  ticket stamped  with  an      impressed embossed,  engraved or  adhesive  stamp  (not      before used)  issued by  the Central Government for the      purposes  of  revenue  and  denoting  that  the  proper      entertainments tax  payable under  section 3  has  been

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    paid."      The words  "payment for  admission" in  section 3(1) is defined under section 2(6) as follows:-           "Payment for admission" includes:-           (i)  any payment made by a person who, having been                admitted  to   one  part   of  a   place   of                entertainment  is  subsequently  admitted  to                another part  thereof, for admission to which                a  payment  involving  tax  or  more  tax  is                required;           (ii) any  payment for seats or other accommodation                in a place of entertainment;            (iii) any  payment for a programme or synopsis of                an entertainment; and           (iv)  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." Admission to  an entertainment is defined under section 2(1) as  including   admission  to   any  place   to  which   the entertainment is  held. Under section 3(1), all payments for admission to  any entertainment  is taxable. Admission to an entertainment would  include admission to any place in which entertainment  is  held  and  payment  for  admission  would include any  payment for  any purpose  whatsoever  connected with an  entertainment which a person is required to make as a  condition   of  attending   or  continue  to  attend  the entertainment. It  is not in dispute that cabaret show is an item of  entertainment. The  only  question  therefore  that arises for  consideration  in  this  case  is,  whether  any payment 788 for admission  to the  entertainment is made. The contention on behalf  of the  prosecution is  that by levying a minimum charge of  Rs. 5/-  for the  evening and  Rs. 10/-  for  the night, there  is a payment for the entertainment also. It is the case  of the  defence that  there is  no  levy  for  the entertainment and  the minimum  fee is  levied only  for the purpose of  keeping out  undesirable elements  from  getting into the  restaurant. By levying a minimum fee, the customer is liable  to pay the amount whether he consumes any eatable or not.  Two  advertisements  which  were  inserted  by  the restaurant invited  customers for  the show.  In the  issues dated November  15, 1968 and November 9, 1968, marked as Ex. ’A’ and ’C’ of the Hindustan Times, it is stated-      "LIDO      Air-conditioned      RESTAURANT      Opposite      Super Bazar      CABARET      Every day at 7-00 & 10-00 P.M.           (Please take seats by 6-30 & 9-30 P.M.)      *Welcome by Ladies      *Music      *Large Selection in Eatables      *Open till late night      Seat Reservation on Tel. 44110" The customers  are invited  for the  cabaret to  take  their seats by  6.30 and  9.30 P.M.  and to listen to music during which time  large selection  of eatables would be available. It is  not alleged  that any  extra rate  is charged for the eatable because  of the  show but  it is not disputed that a

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minimum fee  is levied, for taking a seat for witnessing the show and  for taking  tea or dinner. If the normal rates are charged for  the items  consumed and  incidentally a show is put up,  it cannot  be said  that any  payment is  made  for admission for  the entertainment  but requiring a minimum of Rs. 5/-  and Rs.  10/- whether  the  customer  consumed  any eatable or not would lead to an irresistible conclusion that a payment  of fee for admission to the entertainment is also included.      On the facts of the case it would be an admission to an entertainment. Though it may be for taking tea or dinner for a minimum  charge, as  the admission is to a place where the entertainment is  held, it  would come within the definition under section  2(1). Further,  the payment of Rs. 5/- or Rs. 10/- though  it is  stated to  be for  the dinner,  as it is connected with an entertainment and as the person is making 789 the payment  as a  condition for  attending or continuing to attend the entertainment, it would attract the definition of payment for admission under section 2(6) (iv) of the Act. On the facts  therefore we agree with the conclusion arrived at by the  High Court and confirm the convictions passed on the appellants  and  reject  the  appeal.  The  High  Court,  in disposing of  the  appeal  by  the  Government,  though  the Government was  not present,  dealt with the law elaborately referring to  various English decisions. The learned Counsel for the  appellants, Mr.  Frank Anthony, referred to some of the decisions  and we would, before concluding our judgment, refer to a few of them in brief.      It may be noted that English Law on the subject has its origin from  the Sunday  Observance Acts,  1625 to 1780. The Act, as a general rule, prohibited all public entertainments of all  types on Sundays. Act 1780 provided that "any house, room or other place which shall be opened or used for public entertainment or  amusement and  to which  persons shall  be admitted by  the payment  of money  or by  tickets sold  for money shall  be deemed  a disorderly  house.", vide Halsbury Laws of England. In Williams v. Wright a ticket for a Sunday concert at  the Queen’s  Hall was  stamped "Admission  Free. Reserved Seat  1s." On  the facts  it was held that a charge was made  for a  reserved seat and was not incompatible with the admission being free and hence no offence was committed. In a subsequent case, Kitchner v. Evening Standard Co. Ltd., in  connection   with  an   all-in  wrestling   contest   an advertisement stated-"Prices  4s. 6d.,  3s.  6d.,  2s.  0d., reserved, unreserved  1s. 0d.",  it was held that an offence was committed as the advertisement made it plain that no one can get  in without  payment. The  Finance (New Duties) Act, 1916, section  1(1) of  the Finance  (New Duties) Act, 1916, reads as follows:-           "There shall,  as from  the fifteenth  day of May,      nineteen hundred  and sixteen,  be charged,  levied and      paid on all payments for admission to any entertainment      as defined  by this  Act an  Excise duty  (in this, Act      referred to as ’entertainments duty’)..." This sub-section  is similar  to section  3(1) of the United Provinces (Entertainment  and Betting  Tax) Act,  1937, with which  we   are  concerned.  The  Acts  with  which  we  are concerned,  have   taken   into   account   the   subsequent developments and  widened the definition of ’admission to an entertainment’ and  ’payment for  admission so as to embrace payment for any purpose whatsoever connected with an 790 entertainment  and   admission  to  a  place  in  which  the entertainment is  held. In  Halsbury’s Laws  of England, 3rd

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Edn. Vol.  37, page  11, para 19, it is stated that it would be a  levy for entertainment where refreshments are sold for a higher price than the normal price even though no money is paid for  admission and  would be liable for tax. A decision which was debated at length at the bar is that of a Court of Appeal in  J. Lyons  & Co.  Ltd. v.  Fox. In  that case, the concerts of music were given during and after the service of tea and  dinner. The  dinner was  permitted to  stay for one hour after  the service  of dinner had ceased. No charge was made in any form except for the meals which were served both at a  fixed price  and a-la-carte,  and for which a bill was rendered to the customer before he left the restaurant. By a majority it  was held that payments made by the customers to the  restaurant   were  not   payment   for   admission   to entertainment within  the meaning  of section  1(1)  of  the Finance (New  Duties) Act,  1916, and that the entertainment duty was  therefore not  chargeable in  respect  thereof.  A minority judgment  took the  view that the tea or dinner was purely incidental  to the concert, especially in view of the finding of  the Magistrate  that the persons were paying not merely for  the dinner  but also for the entertainment which followed the  dinner. Reference was made to Attorney General v. London  Casino Ltd.,  under the Finance (New Duties) Act, 1916. In  this case, food and drinks were supplied, as in an ordinary restaurant,  and patrons  were able to dance on the stage. In  addition, an elaborate revue was performed at the stage. Patrons  were  allotted  tables  as  in  an  ordinary restaurant and there was a fixed menu each night, but dishes could be  ordered a-la-carte.  A minimum  charge of 15s. 6d. was made,  payment being  made  before  leaving.  The  Court distinguishing the  case in  J. Lyons  &  Co.  Ltd.  v.  Fox (supra) held  that no doubt could be entertained that people paid 15s.  6d. because  they  can  have  a  good  dinner  in pleasant surroundings  and  that  they  paid  it  and  to  a substantial extent paid it because they will, in addition to the dinner, be able to see an extremely good and interesting and lively  entertainment. The  Court holding, "whatever the result may  be, I  cannot bring  myself to  doubt  that  the normal person  paying 15s.  6d. pays not only for the dinner but also  for the  right to  dance  to  a  band,  and  to  a substantial extent  also pays  it because  he desires to see that is a good and elaborate and expensively produced show." The facts of the case in the London Casino’s case (supra) is similar to  the facts  of our case. In the case before us, a minimum is  fixed and we have no doubt, a part of which is a payment for admis- 791 sion to  the entertainment. Other decisions referred to were Attorney  General  v.  Mcleod,  Attorney  General  v.  Swam, Attorney General  Arts Theatre  of London  Ltd. and Attorney General v.  Southport Corporation. We feel it is unnecessary to burden  our judgment  with the various decisions referred to in  detail by  the High Court for they are not applicable as the  Act with  which we are dealing is wider in its scope and  application.   In  the  circumstances  we  confirm  the conviction and  sentence imposed  by the  High Court and its direction regarding levy of the tax and dismiss the appeal. S.R.                                       Appeal dismissed. 792