Amusement Parks entitled to only One Benefit under Bombay Entertainments Duty Act: Supreme Court [Read Judgment]

The Supreme court last week ruled that amusement parks within limits of Greater Bombay would be entitled to only one benefit i.e. either under Section 3(2) or under Section 3(5)(a) of the Bombay Entertainment Duty Act.

The appellants Pan India Prayatan Ltd. owns and runs an amusement park within limits of Greater Bombay which was opened to the public for admission on 25th December 1989. They charged a lumpsum amount for admission and entertainment to the amusement park. In terms of the Act, the writ petitioners were required to pay entertainment duty.

In a writ petition before the High Court, it sought confirmation that entertainment tax to be levied would be 3.75% of the value of a consolidated ticket. Such stand was accepted by The Collector of Bombay Suburban District. Later, they were informed that they would be required to pay duty @7.5% and not @3.75%. They challenged such demand by way of a writ petition. The said writ petition was withdrawn with liberty to file a fresh petition. The State sought to recover the entertainment duty @7.5% in respect of entry to the amusement park for the period from 16th September 1994 to 24th December 1994 and @15% from 25th December 1994. The appellants paid the duty under protest. In a writ petition challenging the provisions of the Act, the writ petitioners sought a refund of the duty paid.

The High Court held that entertainment duty to be levied for the amusement park is 50% of 15% i.e. 7.5% under Section 3(2) of the Act, therefore, in terms of Section 3(5)(a) and (b) of the Act, the entertainment duty is 50% of 7.5% i.e. 3.75%. The High Court held that such interpretation is on the basis of a cumulative reading of the provisions of the Act.

Justice Deepak Gupta and Justice Hemant Gupta allowed the appeal against the High Court decision and held, “All amusement parks for all entertainment are not entitled to concessional duty in terms of Section 3(2) of the Act. Therefore, the writ petitioners cannot claim benefit under Section 3(2) of the Act. The argument is preposterous as the writ petitioners are firstly claiming the benefit under Section 3(2) of the Act and then under Section 3(5)(a) of the Act. The amusement parks would be entitled to only one benefit either under Section 3(2) or under Section 3(5)(a) of the Act. Since Section 3(2) is not applicable to all amusement parks duty act for all other activities, therefore, the entertainment duty in terms of Section 3(5)(a) of the Act alone would be leviable. The duty under Section 3(2) of the Act would be leviable only in respect of specified categories mentioned therein. Thus, we are unable to agree with the judgment of the High Court that in terms of Section 3(5)(a) of the Act, the entertainment duty is 50% of the duty payable under Section 3(2) of the Act. Consequently, the order passed by the High Court is set aside”.