A state legislature has the power to levy taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling, under Entry 62 of List II of Schedule VII of the Constitution of India.

Headnote:
The impugned Maharashtra Luxury-cum-Entertainment and Amusement Tax on Holders of Television Sets Act, 1982 (the Act) is a valid piece of legislation enacted under Entry 62 of List II of Schedule VII of the Constitution of India, which empowers the state to levy taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling. Television sets are considered articles of luxury in India, and the tax levied on them is a tax on luxury. The Act is also a valid tax on entertainment and amusement because television sets are capable of being used for entertainment purposes. The Act is not a colourable piece of legislation, as it is not an attempt to disguise a tax on a subject matter covered by Entry 31 of List I (which deals with wireless telegraphy) as a tax on a subject matter covered by Entry 62 of List II. The Act does not infringe the petitioners' right to acquire information under Article 19(1)(a) of the Constitution, as it is a reasonable restriction on that right. However, the provisions of section 5(4) of the Act, which limit the liability of dealers and manufacturers of television sets to pay tax to three television sets, are ultra vires and invalid because television sets kept by dealers and manufacturers for the purpose of trade cannot be said to be held by them as articles of luxury or for the purpose of entertainment or amusement.
Fact of the Case:

The petitioners, including a Mumbai-based consumer rights group, two individuals who own television sets, a member of the Maharashtra Legislative Council, and a dealer in television sets, challenged the constitutional validity of the Maharashtra Luxury-cum-Entertainment and Amusement Tax on Holders of Television Sets Act, 1982 (the Act). The petitioners argued that the Act was not a tax on luxury, that it was a colourable piece of legislation that encroached on the central government's power to regulate wireless telegraphy, and that it violated the petitioners' right to acquire information under Article 19(1)(a) of the Constitution.
Finding of the Court:

The court held that the Act was a valid piece of legislation enacted under Entry 62 of List II of Schedule VII of the Constitution of India, which empowers the state to levy taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling. The court found that television sets are considered articles of luxury in India, and the tax levied on them is a tax on luxury. The court also found that the Act is a valid tax on entertainment and amusement because television sets are capable of being used for entertainment purposes. The court rejected the petitioners' argument that the Act was a colourable piece of legislation, finding that it was not an attempt to disguise a tax on a subject matter covered by Entry 31 of List I (which deals with wireless telegraphy) as a tax on a subject matter covered by Entry 62 of List II. The court also rejected the petitioners' argument that the Act violated their right to acquire information under Article 19(1)(a) of the Constitution, finding that it was a reasonable restriction on that right. However, the court held that the provisions of section 5(4) of the Act, which limit the liability of dealers and manufacturers of television sets to pay tax to three television sets, are ultra vires and invalid because television sets kept by dealers and manufacturers for the purpose of trade cannot be said to be held by them as articles of luxury or for the purpose of entertainment or amusement.
Issues: 1. Whether the Act is a valid piece of legislation enacted under Entry 62 of List II of Schedule VII of the Constitution of India, which empowers the state to levy taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling? 2. Whether television sets are considered articles of luxury in India, and the tax levied on them is a tax on luxury? 3. Whether the Act is a valid tax on entertainment and amusement because television sets are capable of being used for entertainment purposes? 4. Whether the Act is a colourable piece of legislation that encroaches on the central government's power to regulate wireless telegraphy? 5. Whether the Act violates the petitioners' right to acquire information under Article 19(1)(a) of the Constitution?
Ratio Decidendi: 1. The Act is a valid piece of legislation enacted under Entry 62 of List II of Schedule VII of the Constitution of India, which empowers the state to levy taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling. 2. Television sets are considered articles of luxury in India, and the tax levied on them is a tax on luxury. 3. The Act is a valid tax on entertainment and amusement because television sets are capable of being used for entertainment purposes. 4. The Act is not a colourable piece of legislation that encroaches on the central government's power to regulate wireless telegraphy. 5. The Act does not violate the petitioners' right to acquire information under Article 19(1)(a) of the Constitution.
Final Decision: The court held that the Act was a valid piece of legislation enacted under Entry 62 of List II of Schedule VII of the Constitution of India, which empowers the state to levy taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling. The court found that television sets are considered articles of luxury in India, and the tax levied on them is a tax on luxury. The court also found that the Act is a valid tax on entertainment and amusement because television sets are capable of being used for entertainment purposes. The court rejected the petitioners' argument that the Act was a colourable piece of legislation, finding that it was not an attempt to disguise a tax on a subject matter covered by Entry 31 of List I (which deals with wireless telegraphy) as a tax on a subject matter covered by Entry 62 of List II. The court also rejected the petitioners' argument that the Act violated their right to acquire information under Article 19(1)(a) of the Constitution, finding that it was a reasonable restriction on that right. However, the court held that the provisions of section 5(4) of the Act, which limit the liability of dealers and manufacturers of television sets to pay tax to three television sets, are ultra vires and invalid because television sets kept by dealers and manufacturers for the purpose of trade cannot be said to be held by them as articles of luxury or for the purpose of entertainment or amusement.

Judgment

Chandurkar J.-All these petitions under Article 226 of the Constitu-tion of India raise a question about the validity of the Maharashtra Luxury-cum-Entertainment and Amusement Tax on Holders of Teievision Sets Act, 1982 (hereinafter referred to as “the Act”)

2. Writ Petition No. 1454 of 1982 is filed by the Mumbai Grahak Panchayat, a society registered under the Societies Registration Act, 1960. Apart from the Chairman and the Honorary Secretary of the said Panchayat, there are three other petitioners in the said petition. The fourth petitioner is the Consumers Guidance Society of India of which the fifth petitioner isthe Vice-President. Petitioner No. 6 is a dealer in television sets carrying on business under the name and style of Sonal Agencies, which is a partnership firm. Writ Petition No. 1463 of 1982 is filed by two individuals who are owners of television sets. The petitioner in Writ Petition No. 1508 of 1982 is a Member of the Legislative Council of the State of Maharashtra. The petitioner in Writ Petition No. 1514 of 1982 is also an owner of a television set. As the main grounds on which the constitutional validity of the Act has been challenged in all these four petitions are the same, they have been heard together and are being disposed of by this judgment.

3. The State Legislature has enacted the Act which came into force on 1st July 1982. The charging provision in the Act is section 3 which reads as follows:-

“Subject to the other provisions of this Act, there shall be levied and collected by the State Government the tax on and from every holder of television set or sets at the rate of Rs. 60 for each year per television set held or possessed by him.”

In the definition section 'tax' has been defined to mean “the luxury-cum-entertainment and amusement tax levied and collected under this Act”. As section 3 provides, the tax is to be levied on every holder of a television set or sets and is to be collected from the said holder. Section 2 (c) defines “holder of a television set” as follows : -

“ 'Holder of a television set' means a person in whose name a licence is issued in respect of any television set under the Wireless Telegraphy Act, 1933, and includes a person, who is for the time being found its possession of any television set irrespective of its size or whether it is only black and white set or is colour set and irrespective of the fact whether the person holds sucb licence or not.”

Under section 4 every holder of a television set is liable to pay the amount of tax due from him for any year to the Recovery Officer on or before 31st January of that year and if any holder fails to pay the amount due on or before the date aforesaid, he becomes liable to pay a penalty at the rate of Rs. 6 per month or part thereof per set till the tax and penalty are fully paid by'hira. Under sub-section (2) of section 4 there is a facility provided to a holder who is liable to pay the amount of tax for a period of six months and he has to pay the tax due at the rate of Rs-. 30 for the half year on or before the last day of the month succeeding the month in which he became / becomes liable to pay the tax. The penalty for non-payment of such tax is Rs. 3 per month. The year contemplated by section 4 (1) commences on the first day of January and half year means a period of six months com-mencing on the first day of January and ending on 30th June or a period of commencing on 1st day of July and ending on 31st day of December. The only other provision which is relevant, having regard to the nature of the challenge made to the validity of the Act is the exemption provision in sec-tion 5. Under section 5 (l) tax is not leviable in respect of a television set owned and used by or on behalf of the Central Government or the State Government or any Municipal Corporation, Municipal Council, Zilla Parishad, Village Panchayat or Cantonment Board. Tax is also not leviable in r spect of any closed-circuit television set. Tax is also not lev

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Judicial Analysis