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2022 Supreme(Bom) 703
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MILIND N. JADHAV, K.R. SHRIRAM, JJ.
Santacruz Gymkhana – Petitioner
Vs.
State of Maharashtra and Another – Respondents
Writ Petition Nos. 1754 of 2009, 71, 87 of 2007, 69, 1758, 1767, 2040, 2127, 2376 of 2006, 1443 of 2005, Interim Application No. 1804 of 2020, Interim Application (L) No. 9771 of 2022, Chamber Summons No. 294 of 2007
Decided On : 14-07-2022
Advocate Appeared:
For the Petitioner: Rahul Nerlekar.
For the Respondents: Abhay L. Patki, Himanshu Takke.
The main legal point established in the judgment is that for the levy of entertainment duty under the Bombay Entertainment Duty Act, 1923, the entertainment must be provided on payment, and if it is not open to the public at large, it does not satisfy the legal connotation of 'entertainment' as defined under the Act.
Headnote:
Entertainment Duty - Billiard Tables - Bombay Entertainment Duty Act, 1923, Section 2(a), 2(b-1), 2(b-2), 3, 4 - The court discussed the provisions of the Bombay Entertainment Duty Act, 1923, particularly focusing on the definition of 'entertainment' and 'pool-game', and the conditions for levying entertainment duty. The court emphasized that entertainment duty could only be levied if the entertainment is provided on payment and that the billiards tables in the club were not open to the public at large, thus not satisfying the legal connotation of 'entertainment' as defined under the Act. The court quashed the demand notices and set aside the warrant of attachment, ordering the refund of any deposited amounts with interest.
Fact of the Case:
The National Sports Club of India (NSCI) challenged the demand for entertainment duty on billiard tables provided for the exclusive use of its members, arguing that as a club run on the principles of mutuality, it was not liable to pay entertainment duty under the Bombay Entertainment Duty Act, 1923.
Finding of the Court:
The court found that the billiards tables in the club were not open to the public at large and were provided exclusively for the members, thus not constituting 'entertainment' for which duty is leviable under the Act. The court quashed the demand notices and set aside the warrant of attachment, ordering the refund of any deposited amounts with interest.
Issues: The main issues were whether the Collector (Entertainment Duty Branch) could demand entertainment duty on billiard tables kept at the club premises and whether the billiard tables provided by the petitioners in their respective clubs could be treated as 'entertainment' for the purpose of the Bombay Entertainment Duty Act, 1923.
Ratio Decidendi: The court held that entertainment duty could only be levied if the entertainment is provided on payment, and since the billiards tables were not open to the public at large and were exclusively for the members, they did not satisfy the legal connotation of 'entertainment' as defined under the Act.
Final Decision: The court made the rule absolute in all the petitions, quashed the demand notices, set aside the warrant of attachment, and ordered the refund of any deposited amounts with interest. No costs were awarded, and all interim applications were disposed.
JUDGEMENT
WRIT PETITION NO. 69/2006 a/w I.A. (L)/9771/2022:
1. Ms. Hubab Sayyed seeks leave to withdraw writ petition No. 69 of 2006 along with interim application (L) No. 9771 of 2022. Petition as well as interim application dismissed as withdrawn.
WRIT PETITION NO. 87 OF 2007:
2. Ms. Prachi Khandge states in writ petition No. 87 of 2007, apart from the demand of entertainment duty on billiard tables, petitioner is also challenging action taken for water sports activity because of the swimming pool in the club premises. This petition be de-tagged and listed on 21st July, 2022 for hearing.
WP 1767/2006, WP 1754/2009, WP 1443/2005, WP 1758/2006, WP 2040/2006, WP 2127/2006, WP 2376/2006, WP 71/2007
3. As regards the remaining 8 petitions listed today, the issue raised is common:
(a) whether the Collector (Entertainment Duty Branch) can demand from petitioners entertainment duty on billiard tables kept at the club premises for the exclusive use of its members by equating it to a pool parlour.
(b) whether the facility of the billiard tables provided by petitioners in their respective clubs can be treated as ‘entertainment’ for the purpose of Bombay Entertainment Duty Act, 1923.
For the sake of convenience, we take the facts of writ petition No. 1767 of 2006.
4. Petitioner No. 1 National Sports Club of India (“NSCI”) is registered under the Societies Registration Act, XXI of 1860. NSCI is run on the principles of mutuality recognized in law which excludes chargeability or levy of any entertainment duty or tax under the Bombay Entertainment Act, 1923 (“said Act”). NSCI is not established with the object of carrying on any business or with the object of making profits. NSCI collects money from its members and applies it for their benefit not as shareholders but as persons who put up the fund and makes no profit. The members, have provided to themselves facilities, privileges and conveniences which includes billiard tables. Under its charter, NSCI is not enabled to carry on any business or commercial activities and if there is any surplus left from the contributions made by the members and expenses incurred for providing facilities, privileges and conveniences to the members, the surplus is not distributed amongst the members.
5. The facilities of NSCI are available only to the members of NSCI and to the guests of those members, if accompanied by the members. In other words, it is not open to the general public. As part of the various privileges, NSCI had installed five billiard tables at the club premises available to be used by its members on first come first basis on a nominal charge of Rs.7/- per frame. Mr. Dave states that this charge also had to be fixed otherwise the facility could be misused and to partly recover the cost of repairs and maintenance to the tables, replacement of the cues and the balls.
6. NSCI received a communication dated 17.12.2004 from respondent No. 2, i.e., the Collector (Entertainment Duty Branch) alleging that in view of the provisions of section 2(1)(b-1)and (b-2) and section 3(9) of the said Act, as amended by ordinance dated 29.05.1999 on pool parlour, an entertainment duty of Rs. 5,000/- per month per pool table/billiard table is payable before the 10th of every month. By the said communication, NSCI was also called upon to furnish details regarding pool/ billiard tables in NSCI’s premises within 7 days of receipt of the said letter failing which, respondent No. 2 will recover entertainment duty with penalty under section 9(a) of the Act.
7. NSCI’s replied denying that any entertainment tax was payable. NSCI received another notice dated 02.05.2006 calling upon NSCI to pay a sum of Rs. 3,50,002/- towards entertainment duty. NSCI was called upon to make the payment along with interest, failing which NSCI was threatened with action under section 267 of Maharashtra Land Revenue Code, 1966. NSCI thereafter approached this Court by this writ petition. Prior to NSCI filing this petition, another petitioner had already
