The levy of entertainment duty on touring cinemas and video exhibitions under Clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, 1923, as amended by the Maharashtra Ordinance No. XXII of 1983, is ultra vires the Constitution and, therefore, invalid.

Headnote:
BOMBAY ENTERTAINMENTS DUTY ACT - TOURING CINEMA - VIDEO EXHIBITION - LEVY OF ENTERTAINMENT DUTY - VALIDITY - CONSTITUTION OF INDIA, ART. 213 - BOMBAY ENTERTAINMENTS DUTY (AMENDMENT) ORDINANCE, 1983, S. 4 - BOMBAY ENTERTAINMENTS DUTY ACT, 1923, S. 3 - MAHARASHTRA CINEMAS (REGULATION) RULES, 1966, R. 2 - The levy of entertainment duty on touring cinemas and video exhibitions under Clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, 1923, as amended by the Maharashtra Ordinance No. XXII of 1983, is ultra vires the Constitution and, therefore, invalid. The provisions of Clauses (c) and (d) do not deal with entertainment at all and the levy of entertainment duty envisaged under the said clauses is not permissible under law.
Fact of the Case:

The petitioners, owners of touring cinemas and a person running a hotel with video cassettes, challenged the provisions of the Bombay Entertainments Duty (Amendment) Ordinance, 1983, which sought to impose taxes on them on the ground that they were engaged in entertainment business.
Finding of the Court:

The court held that the provisions of Clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, 1923, as amended by the Maharashtra Ordinance No. XXII of 1983, are ultra vires the Constitution and, therefore, invalid. The provisions do not deal with entertainment at all and the levy of entertainment duty envisaged under the said clauses is not permissible under law.
Issues: Whether the levy of entertainment duty on touring cinemas and video exhibitions under Clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, 1923, as amended by the Maharashtra Ordinance No. XXII of 1983, is valid.
Ratio Decidendi: The court held that the levy of entertainment duty on touring cinemas and video exhibitions under Clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, 1923, as amended by the Maharashtra Ordinance No. XXII of 1983, is ultra vires the Constitution and, therefore, invalid. The provisions do not deal with entertainment at all and the levy of entertainment duty envisaged under the said clauses is not permissible under law. The court observed that the basis of calculation of the consolidated sum in the case of a touring cinema is not the number of shows held in touring cinema nor is it the number of persons who are admitted to the cinema, it is not even the number of seats actually occupied on a particular day or in a particular month. The basis for calculating the consolidated sum of money is the gross collection capacity on the maximum number of shows per day which are permitted to be conducted by the owner of a touring cinema. If the permission issued by the prescribed officer permits an owner of a touring cinema to conduct two shows in a day and for 30 days in a month the total gross collection capacity will be calculated on the basis of that the owner of the touring cinema has in fact conducted 60 shows, in a month. The gross collection capacity is calculated on the notional basis of all the seats and accommodation available in every show of every day of the month being occupied. The aggregate of all payments that has to be hypothetically made by persons seeking admission is the gross collection capacity.
Final Decision: The court allowed the petitions and declared that Clauses (c) and (d) of section 3(1) of the Bombay Entertainments Duty Act, 1923, as amended by the Maharashtra Ordinance No. XXII of 1983, are ultra vires the Constitution and, therefore, invalid.

JUDGMENT - R.A. JAHAGIRDAR, J.:---The petitioners in Writ Petition No. 38 of 1984 are the owners of what has been described as touring cinemas whereas the petitioner in Writ Petition No. 240 of 1984 is a person who is carrying on the business of running a hotel in the name and style of Hotel Kavita in Thane. In the said hotel he is exhibiting video cassettes. The petitioners in both the petitions are aggrieved by certain provisions contained in Bombay Entertainments Duty (Amendment) Ordinance, 1983, hereinafter referred to as "the Ordinance". The petitioners are so aggrieved because, according to them those provisions make them subject to a tax which is illegal and ultra vires the Constitution. The challenge is to these provisions of the Ordinance which seek to impose taxes on the ground that the petitioners are engaged in entertainment business. The Ordinance itself has come into force with effect from 1st January, 1984 and it seeks to amend the provisions contained in the Bombay Entertainments Duty Act, 1983, hereinafter referred to as "the Principal Act."

2. The provisions in the Ordinance seek to make large scale amendments in the principal Act and in particular sections 3 and 4 of the principal Act. Section 4 of the Ordinance makes amendments in section 3 of the principal Act. By the said amendment consolidated sum of money is being sought to be recovered from the petitioners in Writ Petition No. 38 of 1984 by way of entertainment duty; by the same provision again certain amount by way of lump sum is also sought to be recovered from the petitioner in Writ Petition No. 240 of 1984. Details of the provisions in section 4 of the Ordinance by which section 3 of the principal Act is to be amended will be mentioned a little later in this judgment. Before we do that, it would be necessary to examine what the position was before the amendment.

3. Before the amendment, section 3 of the principal Act provided for the levy by the State Government on all payments "for admission to any entertainment, a duty called 'entertainment duty'". Broadly there were two classes of entertainment which were covered by the provisions of sub-section (1) of section 3 of the principal Act. The first class of entertainment on which duty was payable was in Clause (a) of section 3(1) of the principal Act. That entertainment was a race-course licensed under the Bombay Race-Courses Licensing Act, 1912, or under the Maharashtra Dog Race-courses Licensing Act, 1976. The other form of entertainment on which entertainment duty was leviable was to be found in Clause (b) of section 3(1) of the principal Act and this entertainment was general and was not included in Clause (a). Clause (b) itself provided for different rates of entertainment duty depending upon the place of entertainment whether it was within the limits of Greater Bombay and of the cities and Cantonments of Poona, Sohlapur and Nagpur or whether it was in any other areas. It is not necessary for us to refer to the details of the duty which was payable under the said provision. It is, however, necessary to note that section 3 provided for levy and payment of entertainment duty only on one basis, namely on payment for admission to entertainment. Those were the opening words of section 3(1) of the principal Act. If, therefore, there were no payment for admission to entertainment, there could not be a tax leviable or payable under section 3 of the principal Act. The very basis of the levy of the tax and of the payment of the same to the State Government was the payment for admission to entertainment.

4. Clause (b) of section 2 as it stood before the amendment, defined "payment for admission" to include 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; any payment for seats or other accommodation in a place of entertainment; any payment for a programme of synopsis of an entertainment; any payment made for the loa

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