The Bombay High Court upheld the demand order of the Maharashtra government to collect Rs. 71 Lakhs as entertainment duty from the Film & Television Producers Guild of India ( FPGI ) for organising the APSARA Awards in 2006.
The court ordered the FPGI to pay Rs. 71,87,500 in entertainment duty, but struck down the penalty on the same amount.
The dispute arose because the government claimed the award ceremony with its performances constituted “entertainment” under the Maharashtra Entertainments Duty Act, 1923. The FPGI argued the function shouldn’t be classified as entertainment, especially since award functions were later included in the Act with a special concession rate.
The court disagreed, stating that performances have always been considered “entertainment” under the Act.
The court disagreed with the petitioner’s argument that adding a definition later means award functions weren’t “entertainment” before 2010. They called this argument “flawed.”
Instead, the court said the new definition clarifies that award functions were always meant to be considered “entertainment” under Section 2(a) of the Act. Both “entertainment” and “award function” involve performances, so logically, award functions with music or dance would always be considered “entertainment.”
Therefore, the court ruled that the APSARA award function qualified as “entertainment” under the Act.
Moving on to payment for admission, the court clarified that sponsorships for invite-only events fall under Section 2(b)(viii). The petitioner’s own statements and evidence confirmed receiving significant sponsorships, which the court considered the equivalent of admission fees under the Act.
In conclusion, the High Court Division Bench of Justice Jitendra Jain and Justice K R Shriram observed that all the requirements for imposing entertainment duty under Section 3 of the Act were met.
The High Court remarked that the later addition on “award function” clarifies its inclusion within the existing definition of entertainment, not the other way around.
The court also ruled that sponsorships received by the FPGI for the invite-only event qualified as “payment for admission” under the Act, fulfilling the criteria for entertainment duty.
The scope of “entertainment” had always encompassed performances and exhibitions, irrespective of the amendment year, the bench observed.
In result, the High Court of Bombay held that, “ The entertainment duty of Rs.71,87,500/- imposed and confirmed by the Appellate Authority vide order dated 28th September 2007 is upheld.”
However, the court found the penalty imposed by the government lacked proper justification and ordered it to be waived.
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