- (1.) Heard Sri Govind Krishna, Sri Vipin Kumar and Sri N.S. Chahar, Advocates for petitioners in all the writ petitions and learned Standing Counsel for respondents.
(2.) Though validity of Section 3 of U.P. Entertainment and Betting Tax Act, 1979 (hereinafter referred to as the "Act, 1979") as amended by U.P. Entertainment and Betting Tax (Amendment) Act, 2009 (Act No. 25 of 2009) (hereinafter referred to as the "Amendment Act, 2009") has been challenged in all these writ petitions but during course of argument we find that as a matter of fact dispute relates to Explanation (2) inserted by Amendment Act, 2009 at the end of Section 3 only and not entire Section 3 as amended by Amendment Act, 2009. We further find during course of argument that dispute was confined to interpretation of meaning of Explanation (2), whether it contemplates computation and demand of entertainment tax on the amount of entertainment tax already computed under Section 3(1) or is only clarificatory in nature.
(3.) Section 3 as it stood prior to Amendment Act, 2009 and after said amendment are reproduced as under: Before Amendment Act, 2009 After Amendment Act, 2009 3. Tax on payment for admission to entertainment-(1) Subject to the provisions of this Act, there shall be levied and paid on all payments for admission to any entertainment, other than an entertainment to which Section 4 or Section 4A or Section 4B applies or a compounded payment is made under the proviso to this subsection, an entertainment tax at such rate not exceeding one hundred and fifty per cent of each such payment as the State Government may from time to time notify in this behalf, and the tax shall be collected by the proprietor from the person making the payment for admission and paid to the Government in the manner prescribed: 3. Tax on entertainment-( 1) Subject to the provisions of this Act, there shall be levied and paid on all aggregate payments required for admission to any entertainment other than an entertainment to which Section 4 or Section 4A or Section 4B applies or a compounded payment is made under the proviso to this subsection, an entertainment tax at such rate not exceeding one hundred and fifty per cent of each such payment as the State Government may from time to time notify in this behalf, and the tax shall be collected by the proprietor from the person making the payment for admission and paid to the Government in the manner prescribed: Provided that a proprietor of a cinema of cable operator in a local area having a population not exceeding one lac, may, in lieu of payment under this subsection, pay a compounded payment to the State Government on such conditions and in such manner as may be prescribed and at such rate as the State Government may from time to time notify, and different rates of compounded payments may be notified for different categories of local areas. Provided that a proprietor of a cinema of cable operator in a local area having a population not exceeding one lac, may, in lieu of payment under this subsection, pay a compounded payment to the State Government on such conditions and in such manner as may be prescribed and at such rate as the State Government may from time to time notify, and different rates of compounded payments may be notified for different categories of local areas. Provided further that in the case of cable service, the proprietor of the cable service control room/multi system operator shall be liable to pay the tax, irrespective of the fact whether he collect it directly from the person making the payment for admission or indirectly through an associate or franchise cable operator or an agent, who in turn collects it from the person making the payment: Provided also that a proprietor of a cinema, in lieu of payment under this subsection, shall make a lump sum payment to the State Government on such conditions and restrictions and in such manner as may be prescribed and at such rate as the State Government may from time to time notify, and different rates of lump sum payments may be notified for different categories of local areas or cinemas or for different payment for admission. (2) Nothing in subsection (1) shall preclude the State Government from notifying different rates of entertainment tax for different areas or for different classes of entertainment or for different payments for admission to entertainment. (2) Nothing in subsection (1) shall preclude the State Government from notifying different rates of entertainment tax for different areas or for different classes of entertainment or for different aggregate payment required for admission to entertainment. (2a) It shall be lawful for the State Government to notify lump sum rate of entertainment tax for any entertainment or class of entertainments or for different payment for admission to entertainment or for different area. (3) Where the payment for admission to an entertainment, together with the tax, charges for maintenance of cinema premises and extra charge for air cooling or air conditioning facility, is not a multiple of one rupee, then notwithstanding anything contained in subsection (1) or subsection (2) or any notification issued thereunder, the tax shall be increased to such extent and be so computed that the aggregate of such payment for admission to entertainment, the tax, charge for maintenance of cinema premises and extra charge for air cooling or air conditioning facility is rounded off to the next higher multiple of one rupee and such increased tax shall also be collected by the proprietor and paid to the Government in the manner prescribed. (3) Where the aggregate payment required for admission to an entertainment together with any other charge leviable under this Act, is not a multiple of one rupee then notwithstanding anything to the contrary contained in subsection (1) or subsection (2) or any notification issued thereunder, the tax shall be increased to such extent and be so computed that the aggregate of such aggregate payment and other charges is rounded off to the next higher multiply of one rupee and such increased tax shall also be collected by the proprietor and paid to the State Government in such manner as may be prescribed. (4) If in any entertainment, referred to in subsection (1), to which admission is generally on payment,any person is admitted free of charge or on a concessional rate, the same amount of tax shall be payable as would have been payable had such person been admitted on full payment. (4) If in any entertainment, referred to in subsection (1), to which admission is generally on payment, any person is admitted free of charge or on a concessional rate, the same amount of tax shall be payable as would have been payable had such person been admitted on full payment. (5) Where the payment for admission to an entertainment, referred to in subsection (1), is made wholly or partly, by means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and on the amount of payment for admission, if any, made otherwise. (5) Where the aggregate payment required for admission to an entertainment, referred to in subsection (1), is made wholly or partly, by means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and on the amount of payment for admission, if any, made otherwise. (6) Where in a hotel or a restaurant, entertainment by way of cabaret or floor show (by whatever name called, but excluding a mere band in attendance or recorded music) is provided along with any meal or refreshment with a view to attracting customers, whether or not payment for admission is charged distinctly for such entertainment, twenty per cent of the amount payable by the customer for such meal or refreshment or the amount charged distinctly for such entertainment, whichever is higher, shall be deemed to be the payment for admission to such entertainment and the tax shall such entertainment and the tax shall be levied and paid accordingly. (6) Where in a hotel or a restaurant, entertainment by way of cabaret or floor show (by whatever name called, but excluding a mere band in attendance or recorded music) is provided along with any meal or refreshment with a view to attracting customers, whether or not aggregate payment required for admission is charged distinctly for such entertainment, thirty per cent of the amount payable by the customer for such meal or refreshment or the amount charged distinctly for such entertainment, whichever is higher, shall be deemed to be the aggregate payment required for admission to be levied and paid accordingly. (7) where in a hotel, entertainment by way of cable service is provided in rooms or other places, the entertainment so provided in each room or other place shall be deemed to be a separate entertainment and the subscription for admission to each such entertainment shall be deemed to be equal to the amount of subscription charged from a subscriber in the vicinity of the hotel by the cable operator providing cable service in the hotel, and the tax shall he levied and paid on the basis of such subscription: (7) where in a hotel, entertainment by way of cable service is provided in rooms or other places, the entertainment so provided in each room or other place shall be deemed to be a separate entertainment and the subscription for admission to each such entertainment shall be deemed to be equal to the amount of subscription charged from a subscriber in the vicinity of the hotel by the cable operator providing cable service in the hotel, and the tax shall he levied and paid on the basis of such subscription: Provided that where the cable operator himself is the proprietor of the hotel, the subscription for admission to each such entertainment shall be deemed to be equal to the amount of subscription charged from a subscriber in the vicinity of the hotel by any other cable operator. Provided that where the cable operator himself is the proprietor of the hotel, the subscription for admission to each such entertainment shall be deemed to be equal to the amount of subscription charged from a subscriber in the vicinity of the hotel by any other cable operator. Explanation. - For the purposes of this subsection and clause (ee) of section 2, 'hotel' includes an accommodational unit wherein rooms are provided to the customers on rent, but does not include the units approved under the 'Paying Guest Scheme' of the Department of Tourism of me State Government. Explanation 1. - For the purposes of this subsection and clause (ee) of section 2, 'hotel' includes an accommodational unit wherein rooms are provided to the customers on rent, but does not include the units approved under the 'Paying Guest Scheme' of the Department of Tourism of me State Government." Explanation (2) - For the purposes of this Act, the expression aggregate payment shall mean a sum paid by a person for admission to the entertainment which shall include entertainment tax and any other amount required to be paid under this Act but does not include any fee or other charges which is not a part of entertainment tax under this Act." ;