IMPORTANT POINT
The judgment established the applicability of entertainment tax based on the nature of the activities and the public's access to them, as interpreted in various decisions.

JUDGMENT

Dharmesh Sharma, J.

1. The petitioners invoke the extra ordinary jurisdiction of this Court under Article 226 read with Article 227 of the Constitution of India challenging the impugned order dated 30 November 2007 passed by the Financial Commissioner, Delhi/respondent No.2 [FC] in appeal case bearing No. 33/01-CA, whereby the FC allowed the appeal filed by the respondent under Section 15(4) of the Delhi Entertainment and Betting Tax Act, 1996 [The Act], setting aside the imposition/levy of entertainment tax by the petitioners.

FACTUAL BACKGROUND:

2. Briefly stated, it is the case of the petitioners that respondent No.1 is an authority organizing Trade Fairs in the area commonly known as Pragati Maidan, New Delhi. It is stated that respondent No.1 charges admission fee in the form of ticket to allow people to visit fairs and also levy separate fee for other events such as Fashion Shows, Theatre Shows and Movies conducted within the same complex by individual organizations. The grievance of the petitioners is that respondent No.1 was initially exempted from payment of entertainment tax for several years but a policy decision was taken on 18 November 1996 by the Competent Authority and exemption from payment of entertainment tax was withdrawn. It is stated that on imposition of tax for the year 1996-97, the respondent No.1 filed Civil Writ Petition No. 129/99 titled `ITPO v. Govt. of NCT of Delhi'. However, since no stay was granted, it deposited a demand draft of Rs. 6,40,233.75/- as part payment.

3. It is stated that for the assessment year 1997-98, 1998-99 and 1999-2000 assessment proceedings were initiated against the respondent for non payment of tax and a tax of Rs 15,03,776/- was payable on various other entertainment activities during the year 1996-97 with interest of Rs 11,98,762/-; that the total demand for the year 1996-97 assessed to Rs 27,02,538/- and for the assessment year 1997-98, tax payable came to Rs 21,19,294/- out of which Rs 13,32,790/- was Entertainment Tax and Rs 7,86,504/- was the interest. Likewise, for the assessment year 1998-99, a sum of Rs 56,50,782/- was payable, which included entertainment tax of Rs 43,16,878/- and interest of Rs 13,33,404/-.

4. Accordingly, a Show Cause Notice dated 23 February 2000 was issued, to which reply was filed by respondent No.1, and a personal hearing was afforded to its Authorized Representative. Ultimately, three assessment orders were passed for the aforesaid years on 10 March 2000, 13 March 2000 and 16 March 2000 respectively. The appeal was filed by the respondent No. 1, which was dismissed by the Appellate Authority vide order dated 29 December 2000. Respondent No.1 filed a second appeal under Section 15(4) of the Act, in which the main challenge was with regard to the inapplicability of Section 2(i) of the Act that defines the word "entertainment". In order to appreciate the questions of law involved in the instant matter, it would be expedient to reproduce the relevant portion of the impugned order dated 30 November 2007 passed by the FC, which reads as follows:

"The impugned order has been challenged on grounds that it has been passed by the Deputy Commissioner who had no authority to exercise powers u/s 15(3) of the Act. The respondent has submitted that the Deputy Commissioner was properly authorised u/r 2, Sub Rule (iii) of the Rules. There is no dispute that the Deputy Commissioner appointed was covered u/s 3 Sub section 2 of the Act. Under this section, officers are appointed by the Government to assist the Commissioner in the execution of his functions under the Act and they are required to exercise such powers as may be conferred and perform such duties as may be required by or under the Act. The respondent claims that the appeal has been heard by the Deputy Commissioner duly appointed u/s 3(2) of the Act and who, under the provisions of Rule 2(iii), was exercising powers and performing functions of the Commissioner u/s 15 of the Act. I do not agree