M.M.KUMAR, J. - (1.) A Division Bench of this Court, of which one of us was a member (M.M. Kumar, J.), has made a reference in a bunch of petitions* to this Full Bench raising significant and common questions of law concerning validity of the levy of entertainment duty on Sports Clubs under the Punjab Entertainment Duty Act, 1955 (as applicable to Haryana) [for brevity, 'the Act'] and the Punjab Entertainment Duty Rules, 1956 (as applicable to Haryana) [for brevity, 'the Rules']. It would be apposite to advert to the reference order dated 3.8.2009, which reads thus: "Challenge in this bunch of three petitions is to the levy of entertainment duty and its application to the Sports Clubs like the present petitioners who patronise the Sports of Golf. Learned senior counsel have, inter alia, submitted that Entry 62 of the State List in the 7th Schedule of the Constitution specifically omit the use of expression 'Sport', which authorises the State legislature to levy taxes on entertainments, amusements, betting and gambling. They have also drawn our attention to Entry 33, which in addition to other things used the expression 'Sports', 'entertainments' and 'amusements'. They have also submitted that the intention of the framers of the Constitution is to restrict the power of legislation concerning imposition of tax, which has been saved by Entry 97 of the First List for framing of legislation by the Parliament. The necessary intendment by omission of expression 'sports' from Entry 62, is leaving the subject of taxing sports to the Parliament under residuary entry 97 of the First List. They have also submitted that if clubs like the petitioners are taxed then educational institutions, universities and colleges where sport is played, would also be hit by the duty. Another argument raised is that in the Division Bench judgment of this Court in M/s. Chrysalis International (P) Ltd. v. State of Haryana and others (C.W.P. No. 19345 of 2004, decided on 29.8.2008) the question of constitutional validity of the 'Entertainment Duty' was neither raised nor adjudicated and, therefore, the view of the Division Bench cannot be considered binding. It has also been submitted that the judgment of Hon'ble the Supreme Court in M/s. Geeta Enterprises v. State of U.P., AIR 1983 SC 1098, which has been relied upon by the Division Bench of this Court in M/s Chrysalis International (P) Ltd. (supra) lays down four tests and the Division Bench of this Court has applied only the first test whereas a perusal of the judgment shows that all the four tests have to be satisfied before entertainment duty could be imposed. The submission made is that the Division Bench judgment would require another look. On the other hand, Ms. Ritu Bahri, learned State counsel has placed reliance on the judgment of Hon'ble the Supreme Court in the case of Y.V. Srinivasamurthy v. State of Mysore, AIR 1959 SC 894 and argued that 'cinema' was included to be covered by Entry 62 and, therefore, 'sports' can also be included. During the course of arguments, on a specific reference being made by one of us (Jaswant Singh, J.) that he is member of three Golf Clubs and occasionally plays Golf, learned State counsel has expressed no objection to the hearing of the cases by this Bench nor learned counsel for the petitioners has raised any such objection. Heard. Admitted. Keeping in view the fact that imposition of entertainment duty is likely to affect the larger public interest and the Division Bench judgment in the case of M/s Chrysalis International (P) Ltd. (supra) would require a re -look, we are of the considered view that the matter requires consideration at length by a larger Bench. The constitutional validity of various provisions of the Punjab Entertainment Duty Act, 1955 (as applicable to Haryana) and the rules framed thereunder has also been challenged. Accordingly, we direct that the papers be placed before Hon'ble the Chief Justice for constituting a larger Bench. In the meanwhile, the interim arrangement made by order dated 30.5.2009 shall continue and the aforesaid order is made absolute."
(2.) A perusal of the aforesaid reference order shows that following substantive questions of law would arise for determination by the Full Bench: - (A) Whether exclusion of 'sport' as a subject from taxing Entry 62, and inclusion of the same in non -taxing Entry 33 of the State List of the Seventh Schedule of the Constitution is intentional so as to deprive the State Legislature their competence to tax 'sport' and leave that competence to Parliament under the residuary Entry 97 of the Union List? (B) Whether the Division Bench judgment of this Court in M/s. Chrysalis International Pvt. Ltd. v. State of Haryana, 2008 (4) PLR 323, has been correctly decided by applying the law laid by Hon'ble the Supreme Court in M/s. Geeta Enterprises v. State of U.P., (1983) 4 SCC 202. The question is 'does the Homer nod'? FACTS: In order to put the controversy in its proper perspective leading to the legal issues carved out in the preceding para, it would be necessary to notice the facts in brief, which for the sake of illustrative convenience are taken from C.W.P. No. 9476 of 2009 (DLF Golf Resorts Ltd. v. State of Haryana and others). The petitioner therein, which is a registered company, is managing and running a club in Gurgaon. The club is owned by DLF Commercial Developers Ltd., which has an independent identity being incorporated under the Companies Act, 1956. It has been claimed that apart from other activities it provides facilities for playing the sport of Golf to its members on payment of membership fee and other charges. The petitioner has claimed that the club is not open to general public and its activities are private in nature. There are no exhibition matches to entertain viewers nor general public are allowed entry on payment of fee. Once the club is not rendering any entertainment, it is not subject to levy of 'entertainment duty' under the provisions of the Act or the Rules. In support of their claim reliance has been placed on the view taken by the respondents in Memo. No. 718/T -1, Chandigarh, dated 16.5.1991 in the case of Meadows Golf and Country Club, Gurgaon, clarifying that under Sections 2(d) and 2(e)(iii) of the Act only that entertainment which is either performed for others and is shown to others would attract levy of entertainment duty and no duty is payable by the clubs where members of the club play Golf to entertain themselves (P -2). On the basis of that communication the petitioner claimed that they did not collect any fee or pay any duty under the Act and/or the Rules. Even the respondents did not ever raised demand for entertainment duty from the petitioner for the last over 18 years. However, on 31.3.2009, Memo. dated 16.5.1991 has been withdrawn with retrospective effect (P -3). On 27.1.2009, the officer of the State issued notices in Form PED -4 as prescribed under Rule 17 of the Rules in respect of Assessment Years 2004 -05, 2005 -06, 2006 -07 and 2007 -08. They have been asked to appear before the competent officer to answer the allegation that they have not been correctly paying the amount of entertainment duty. They have been called upon to explain cases of free, surreptitious, unauthorised and concessional entries (P -4). Eventually, their reply has been rejected and they have been held liable to pay entertainment duty in respect of the Assessment Years 2004 -05, 2005 -06, 2006 -07 and 2007 - 08 and the amount has been assessed. These orders further provide that penal action would be initiated separately (P -5). Consequently, fresh demand notices dated 26.5.2009, under Form PED -7 have been issued under Rule 18 of the Rules demanding the duty as per assessment (P -6). The petitioners have sent replies stating that by virtue of Rule 18 of the Rules, notice of demand must have given a clear period of thirty days from the date of its receipt. Therefore, it has been urged that the notices were illegal. They further submitted that the matter was subjudice and, therefore, it must await the disposal of various petitions.
(3.) IN their written statements the respondents have taken the stand that the petitioner has been admitting the general public as members on payment of membership fee although on monthly, yearly or lump sum basis which is in addition to other charges like cart fee, caddie fee, green fee and subscription money. Such members visit the club premises, play Golf and are entertained; and the whole activity is covered by the exclusive definition of the expression 'entertainment' as used in Section 2(d) of the Act. According to the respondents a Division Bench of this Court in the case of M/s Chrysalis International (P) Ltd. (supra) or in Wet -N -Wild Resort v. State of Haryana (CWP No. 443 of 2005, decided on 29.8.2008), has held that the activities of Bowling Alley, Video Games, Billiards, Pool Table and Swimming Pool though restricted to members who have paid the subscription either in lump sum or on monthly or yearly basis, provide amusement to them and, therefore, satisfy test No. 4 laid down by Hon'ble the Supreme Court in the case of M/s Geeta Enterprises (supra). Therefore, the demand of duty from the petitioner is wholly sustainable in the eyes of law.;