1. Installation of coin-operated video game machines — Determination of whether such activity constitutes entertainment under the U.P. Entertainment and Betting Act, 1979. (Para 2 )
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1996 Supreme(SC) 748
1996(4) Supreme 385
SUPREME COURT OF INDIA
K. Ramaswamy, S.P. Bharucha and K.S. Paripoornan, JJ.
Standard Games etc. -Appellants
versus
State of U.P. & Ors. etc. -Respondents
Civil Appeal No. 3323 of 1984
with
Civil Appeal No. 3322 of 1984
and
Civil Appeal No. 7749 of 1996
(Arising out of SLP (C) No. 5560 of 1984)
Decided on 10-4-1996
Important Points
IMPORTANT POINT
Charge of inserting the coin realised from person who wanted to operate video game for a slot amounts entertainment within the meaning of Section 2(g) of U.P. Entertainment and Betting Act and therefore video games is exigible to entertain tax.
Charge of inserting the coin realised from person who wanted to operate video game for a slot amounts entertainment within the meaning of Section 2(g) of U.P. Entertainment and Betting Act and therefore video games is exigible to entertain tax.
Subject
Taxation Law - Entertainment Tax
Act Referred
Headnote
U.P. Entertainment and Betting Act, 1979-Section 2(a)-Video game machine-Charge of inserting coin to operate the video game amounts to entertainment-Video games is exigible to entertain tax-Appellant running video game machine is liable to pay entertainment tax. (Para 3)
Legal Category Hierarchy
Table of Contents
2. Whether the operation of a video game machine for pleasure and skill constitutes entertainment exigible to tax under the U.P. Entertainment and Betting Act, 1979. (Para 2 )
3. The act of inserting a coin to operate a video game for a specific duration constitutes entertainment under the statutory definition. (Para 3 )
4. Coin-operated video games fall within the definition of entertainment under Section 2(g) of the U.P. Entertainment and Betting Act, 1979, and are exigible to entertainment tax. (Para 3 )
5. Appeals dismissed; appellant held liable to pay entertainment tax. (Para 3 )
6. Does the operation of a coin-operated video game constitute entertainment under the U.P. Entertainment and Betting Act, 1979?
Yes, the court held that the charge realized for inserting a coin to operate a video game amounts to entertainment within the meaning of Section 2(g) of the Act. (Para 3 )
7. Are video games exigible to entertainment tax if they are not specifically enumerated in the tax rate notification?
Yes, where there is no specific enumeration for video games, the general clause of the notification imposes the entertainment tax. (Para 3 )
8. What constitutes payment for admission in the context of coin-operated video games?
The charge realized from users for inserting a coin to operate the machine for a specific duration is considered payment for admission to entertainment. (Para 3 )
ORDER
Leave granted in SLP (C) No.5560/84.
2. The admitted facts are that the appellant had installed the video game consisting of a machine with a display screen which is activated only by inserting a coin in the slot made in the machine. Immediately thereon, the screen is lit up and the game commences. The question is : whether it is an entertainment within the meaning of Section 2(a) of U.P. Entertainment and Betting Act, 1979 (for short, the Act )? The appellant s own case is that the operator gets nothing in return other than the pleasure he derives or enjoys from exercising or building up his skill in operating the machine. The Act defines "admission" under Section 2(a). Section 2(g) defines "entertainment". Section 2(1) (iii), (iv) and (v) in particular defines "payment for admission" with wide language. Notification dated July 24, 1981 was issued by the State exercising the power under Sections 3(1) and 4(1) of the Act prescribing the rates of admission.
3. Admittedly, since there is no enumeration in this regard for the video game, clause (v) of the said notification imposes 30% of the admission fee as entertainment tax. The controversy raised in this case is squarely covered by the decision of this Court in Geeta Enterprises & Ors. v. State of U.P. & Ors.1. This Court has considered the above provisions and had held that charge of inserting the coin was realised only from those who wanted to operate the video game at the rate of 50 paise, for a slot lasting upto 30 seconds and it amounts to entertainment within the meaning of Section 2(g) of the Act. Therefore, video games is exigible to entertain tax. We, therefore, hold that the appellant is liable to pay the entertainment tax. We do not find any illegality in the view taken by the High Court warranting interference.
The appeals are accordingly dismissed. No costs.
Appeals dismissed.
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