REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 6438-6439 OF 2009

THE STATE OF MAHARASHTRA & ORS. .....APPELLANT(S)

VERSUS

PAN INDIA PARYATAN LIMITED & ANR. .....RESPONDENT(S)

J U D G M E N T

HEMANT GUPTA, J.

1. The challenge in the present appeals is to an order passed by the

Division  Bench  of  the  High  Court  of  Judicature  at  Bombay  on

19th December,  2006  whereby  Sections  3(1)(b),  3(2)  and  sub-

sections  5(a)  and  (b)  of  the  Bombay  Entertainments  Duty  Act,

19231 were interpreted to hold that the rate of tax payable by the

respondents2 would be as follows:

“i.   For  the  first  three  years  from  date  of commencement of park the Petitioners are not required to pay any duty,

ii.   Duty  for  the  4th and  5th year,  from  the  date  of commencement, duty payable is at the rate of 3.75%,

1  for short, ‘Act’ 2  for short, ‘writ petitioners’

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applying concessional provision.

iii.   Duty  payable  during  6th year  from  the  date  of commencement of park and there onwards, is at rate of 7.5%.”

2. The writ petitioners own and run an amusement park within limits

of Greater Bombay which was opened to the public for admission

on 25th 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

duty.

3. In the writ petition before the High Court, the assertion of the writ

petitioners was that on 4th 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 7th 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  The said writ petition was withdrawn with liberty to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 petition.   

4. The  State  sought  to  recover  the  entertainment  duty  @7.5%  in

respect  of  entry  to  the  amusement  park  for  the  period  from

16th September,  1994 to  24th December,  1994 and  @15% from

25th December,  1994.   The writ  petitioners  paid the duty under

protest. In a writ petition challenging the provisions of the Act, the

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writ petitioners sought refund of the duty paid.

5. The  High  Court  found  that  the  following  questions  arose  for

consideration:

“i.   Rate  of  entertainment  duty  payable  by  the Petitioners for a period from 16th September, 1994 to 24th December, 1994.

ii.  Rate of duty payable for the period commencing 25th

December, 1994.

iii.   Whether  action  of  Respondents  in  seeking  to recover  duty  payable  during  25th December,  1989 to 23rd 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 1998.”

6. Before  we  consider  the  respective  arguments  of  the  learned

counsel for the parties, the statutory provisions of the Act need to

be referred:

“2  (a-1).  “amusement  park”  means  a  place  wherein various types of amusements including games or rides or both but excluding exhibition by cinematograph and video exhibition are provided fairly on permanent basis, on payment for admission;

xx xx xx

2 (b) “payment for admission” in relation to the levy of entertainments duty, 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 duty or more duty is required,

xx xx xx

(d)   “admission  to  an  entertainment”,  includes

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admission to any place in which the entertainment is held  or  any  place  where  from  the  entertainment  is provided by means of cable connection from any type of antenna with a cable network attached to it or cable television  for  Direct-to-Home  (DTH)  Broadcasting service;

xx xx xx

(f)  “entertainment  duty”,  or  “duty” in  respect  of  any entertainment  means  the  entertainment  duty  levied under section 3;

3. Duty on payments for admission to entertainment. –  

(1)  There  shall  be  levied  and  paid  to  the  State Government  on  all  payments  for  admission  to  any entertainment  [except  in  the  case  of  video  games, exhibition by means of any type of  antenna or cable television,  or  exhibition  by  means  of  Direct-to-Home (DTH) Broadcasting service,  bowling alley,  Go-carting, dance bar, discotheque, amusement park, water sports activity, pool game] a duty (hereinafter referred to as “entertainments duty”) at the following rates, namely:-

(a) xx xx xx

(b)  In  the  case  of  every  entertainment,  [other  than exhibition by cinematograph including video exhibition [video games and exhibition by means of any type of antenna or cable television]

Provided that, in the case of the cabaret entertainment, fifty  per  cent  of  the  total  payment  charged  by  the proprietor per person per show, whether with or without eatables or beverages and whether regular tickets are issued  or  not,  for  admission  to  such  entertainment, shall be deemed to be the payment for admission and duty  shall  be  levied  thereon  accordingly  under  this clause:

Provided further that, the entertainment duty in respect of  an  amusement  park  shall  be  15  per  cent  of  the payment made for admission to the amusement park, including payment made for admission for games and rides, whether charges separately or not”

3(2)   Where  the  payment  for  admission  to  an

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entertainment is made by means of a lump sum paid as a subscription or contribution to any society, or for a season ticket or for the right of admission to a series of entertainments  or  to  any  entertainment  during  a certain period of time, or for any privilege, right, facility or thing combined with the right of admission to any entertainment  or  involving  such  right  of  admission without  further  payment or  at  a  reduced charge,  the entertainment duty shall be levied and paid on 50 per cent; of such lump sum at the rates specified in clause (b) of sub-section (1).

3(5)(a)   Notwithstanding  anything  contained  in  sub- section (2)  or  in  any other  provisions of  this  Act  but subject  to  the  provisions  of  clause  (b),  on  and  with effect  from the  25th December,  1989,  there  shall  be levied,  and  paid  by  the  proprietor  to  the  State Government, the entertainments duty in respect of an amusement park in the following manner, namely:-

(i)  for  the  first  three  years  from  the  date  of commencement of the amusement park, no duty;

(ii) for the subsequent two years, at the rate of fifty per cent of the rate of duty leviable under clause (b) of sub- section (1) or, as the case may be, sub-section (2) of section 3;

(iii) from the sixth years, full amount of entertainments duty leviable at  the rate of  specified in clause (b)  of sub-section (1) or, as the case may be, sub-section (2) of section 3.

Explanation.- For the purpose of this sub-section,-

*********      ” (emphasis supplied)

7. 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

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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.

8. The  argument  of  the  learned  counsel  for  the  appellants  is  that

Section  3(5)(a)  of  the  Act  starts  with  a  non-obstante  clause

contemplating  levy  of  an  entertainment  duty  in  respect  of  the

amusement park, in the manner mentioned therein.  Section 3(1)

of the Act contemplates levy of entertainment duty in respect of

amusement park to be 15% of the payment made for admission to

the same.  In terms of the non-obstante clause with which Section

3(5)(a)  begins,  the  levy  of  duty  shall  be  in  terms  of  that  sub

-section. There is no difficulty in respect of sub-clause (i) of Section

3(5)(a)  of  the  Act,  which  is  to  the  effect  that  no  duty  shall  be

payable.  Sub-clause (ii) of Section 3(5)(a) of the Act contemplates

that  for the subsequent two years, duty @50% would be leviable

under clause (b) of sub-section (1) or, as the case may be, sub-

section (2) of section 3 of the Act.  

9. The learned counsel  for the writ  petitioners argued that upon a

collective  reading of  the  definition  of  “amusement  park”  (which

means a place where various types of entertainment are provided

on a permanent basis on payment for admission) and Section 3(2)

which provides that upon payment of admission to entertainment

by means of a lump sum amount for the right to admission to a

series of entertainments, the entertainment duty would be charged

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@ 50% of the rates mentioned in Section 3(1)(b). Thus, in the case

where the amusement park charges a lump sum amount as a right

to  admission  for  all  the  rides  and  games  available  in  the  said

amusement  park,  then,  Section  3(2)  will  be  applicable  and  the

entertainment duty payable by the amusement park would be half

of what is provided in Section 3(1)(b) being 15% i.e. 7.5%.  

10. It is also argued that the proviso to Section 3(1)(b) ends with the

phrase “including payments made for admissions for games and

rides,  whether  charged  separately  or  not”.   Thus,  15%

entertainment tax was payable by the amusement park where it

charged an amount for mere admission and the charges for the

games and rides being separate.  However, where the amusement

park charges a lump sum amount which includes the charges for

games and rides, the entertainment tax payable would be 7.5 % in

terms of Section 3(2).  

11. It  is  argued  that  Section  3(5)(a)  of  the  Act  further  gives  a  tax

holiday on the duty payable under Section 3(1)(a) or Section 3(2)

of the Act, therefore, for the fourth and fifth year of the operation

of the amusement park, the duty would be 3.75%.   

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)

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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 Act.

13. It is sub-section 3(2) of the Act which is required to be interpreted.

The said provision is in respect of charging of duty at 50% of the

duty fixed in Section 3(1)(b) of the Act to the specific category of

visitors to the amusement parks such as payment in:-

a) “lump sum as a subscription or contribution to any society”,

or b) “for a season ticket” or c) “for the right of admission to a series of entertainments” or  d) “any entertainment during a certain period of time”   

14. 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 season’s ticket to the visitors.

A  Season  ticket  would  mean  a  regular  visitor  visiting  the

amusement park regularly at a specific time.  

15. Category (d),  that entry would be on charging 50% of the duty

fixed  for  any  entertainment  during  a  certain  period  of  time,

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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 rate.

16. The prime argument  turns  around in  respect  of  category  (c)  as

delineated above i.e. for admission to a series of entertainment.

The argument of the learned counsel for the writ petitioners is that

when a ticket is issued by them, it is a ticket for admission to series

of entertainment.  We 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 held.

17. 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

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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 entertainment.   

18. 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 Act.

19. 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

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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.

20. Thus, we are unable to agree with the judgment of the High Court

that in terms of Section 3(5)(a) of the Act, the entertainment duty

is  50%  of  the  duty  payable  under  Section  3(2)  of  the  Act.

Consequently, the order passed by the High Court is set aside.  The

appeals are allowed.   

.............................................J. (DEEPAK GUPTA)

.............................................J. (HEMANT GUPTA)

NEW DELHI; FEBRUARY 18, 2020.

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