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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. KULKARNI, JITENDRA JAIN, JJ.
Drishti Adventures Sports Private Limited – Petitioner
Versus
State of Maharashtra – Respondent
Writ Petition No. 2158 of 2005
Decided On : 04-12-2023
Entertainment Duty - Water Sports Activity - Section 3(1), Section 3(5A) - The court discussed the vires of proviso to Section 3(1) and 3(5A) of the Bombay Entertainment Duty Act, 1923, and the petitioners' claim for refund of entertainment duty. The court analyzed the legislative debates, the scheme of the Act, and the petitioners' admissions to determine the liability for entertainment duty on water sports activities. The court dismissed the petition, holding that the petitioners' activities were covered by the Act and that their claim for refund was untenable.
Fact of the Case:
The petitioners operated water sports activities and sought a refund of entertainment duty deposited with the respondents after the expiry of the exemption period. The petitioners challenged the vires of proviso to Section 3(1) and 3(5A) of the Bombay Entertainment Duty Act, 1923.
Finding of the Court:
The court found that the petitioners' activities were covered by the Act and that their claim for refund based on the non-recovery of duty from similar operators was untenable. The court dismissed the petition, stating that the petitioners' case of discrimination and unjust enrichment was not supported by the facts and legal principles.
Issues: The issues included the vires of proviso to Section 3(1) and 3(5A) of the Bombay Entertainment Duty Act, the petitioners' claim for refund, and the applicability of Article 14 of the Constitution of India.
Ratio Decidendi: The court held that the petitioners' activities were covered by the Act and that their claim for refund based on the non-recovery of duty from similar operators was untenable. The court also emphasized that the petitioners' admission of liability for entertainment duty and their failure to demonstrate parity with other operators negated their claim.
Final Decision: The petition was dismissed, and no costs were awarded to the petitioners.
JUDGMENT :
JITENDRA JAIN, J.
1. This petition under Article 226 of the Constitution of India has prayed for various reliefs, however, at the time of hearing, the petitioners have pressed the following reliefs:
“(A) That this Hounourable Court be pleased to declare that proviso to Section 3(1) and sub-section (5A) of Section 3 of the Bombay Entertainment Duty Act, 1923, inserted by the Bombay Entertainment Duty (Amending) Act, 1998, are ultra vires the Constitution of India and bad in law and liable to be struck down.
(AA) That the Hon’ble Court be pleased to issue a writ of mandamus, or a writ in the nature of mandamus, or any other appropriate writ, direction, or order under Article 226 of the Constitution of India directing the Respondent No. 1 to refund Duty Amount i.e. Rs. 1,52,45,923/- and any applicable interest as per the discretion of the Hon’ble Court.
(D-1) In the alternative if it being held that the entertainment duty is payable for the water sports activity as undertaken by the petitioners than this Honourable Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus, or such any other appropriate writ, direction or order under Article 226 of the Constitution of India directing the respondents to submit list of water sports activity operators who have been granted permission by Maharashtra Maritime Board to undertake water sports activity and liable to pay entertainment duty from 1 st May 1998 to undertake water sports activity and not taxed under the provisions of the Bombay Entertainment Duty Act, 1923 under the provisions of the Bombay Entertainment Duty (Amending) Act, 1998 when it came into force along with the amount recoverable from them as Entertainment Duty and upon completion of recovery submit to this Honourable Court the compliance report.”
2. Insofar as prayer clause A is concerned, which is the petitioners challenge to the vires of proviso to Section 3(1) and 3(5A) of the Bombay Entertainment Duty Act, 1923 as inserted by the Bombay Entertainment Duty (Amending) Act, 1998 is concerned, it is stated that in the light of the decision of the Delhi High Court in case of DLF Golf Resorts Ltd. vs. State of Haryana and Others in Civil Writ Petition No. 9476 of 2009 dated 3rd January 2011, the petitioners do not wish to press for the said prayer. The issues as raised in prayer clause A are kept open. Thus, the adjudication of the present petition is confined to prayer clause AA and D-1.
3. FACTS: On 27th March 2000, respondent No. 1 passed a Resolution granting lease of 500 sq. mtrs. of land at Chowpatty, Mumbai to Maharashtra Tourism and Development Corporation (MTDC) for development of water sports activities. On 29th March 2001, MTDC granted license to the petitioners for a period of 10 years to develop, manage and operate water sports activities on monthly license fees and on terms and conditions set out therein. The petitioners pursuant thereto developed and operated water sports complex and started activities like water sking, wind surfing, sailing, kayaking, rowing, jet boating etc. In the year 2001, Entertainment Duty Inspector visited the office of the petitioners and sought various documents, license etc. which the petitioners complied with. On 14th March 2002, the petitioners addressed a letter to the MTDC requesting for exemption from payment of entertainment duty. On 26th March 2002, the petitioners addressed a letter to the respondents recording that the water sports activity does not fall under the Bombay Entertainment Duty Act, 1923. On 27th March 2002, respondent No. 2 issued a demand notice asking the petitioners to pay the entertainment duty of Rs. 8,53,943/-. The said demand was disputed and denied by the petitioners and same was challenged by the petitioners in Writ Petition No. 1104 of 2002 on 21st November 2002. This Court allowed the petitioners to withdraw the aforesaid writ in order to enable the petitioners to file a statutory appeal under Section 10-A of the Entert
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