Gujarat High Court
Gypsy Pegasus A Partnership Firm vs State Of Gujarat & 4 on 30 March, 2017
Bench: M.R. Shah, B.N. Karia
C/SCA/2444/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 2444 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA sd/
=========================================
1 Whether Reporters of Local Papers may be allowed to see YES the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law as NO
to the interpretation of the Constitution of India or any order made thereunder ?
============================================= GYPSY PEGASUS A PARTNERSHIP FIRM....Petitioner(s) Versus STATE OF GUJARAT & 4....Respondent(s) ============================================= Appearance:
MR. MIHIR THAKORE, SR. ADVOCATE WITH VIRAL K SHAH, ADVOCATE for the Petitioner(s) No. 1 MR. KAMAL TRIVEDI ADVOCATE GENRAL WITH MS. SANGEETA VISHEN AGP WITH MR. PRANAV TRIVEDI ASST. GOVERNMENT PLEADER for the Respondent(s) No. 1 5 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE B.N. KARIA Date : 30/03/2017 CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, direction and / or order to quash and set aside the impugned communication dated 20.01.2017 and the impugned order dated 27.01.2017, by which, Page 1 of 18 HC-NIC Page 1 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT the authority under the Gujarat Entertainment Tax Act, 1977 (hereinafter referred to as the "Act, 1977") has sought to levy / levied the entertainment tax on the musical concert performed / organized by the petitioner.
2.0. The facts leading to the present Special Civil Application in nutshell are as under:
2.1. That the petitioner had organized a musical concert on 23.12.2016. That the said musical concert was conducted by popular singer and that the same was live musical night. It is the case on behalf of the petitioner that event organized by the petitioner being musical concert would be exempted from the application of the Act, 1977 in view of Section 3A r/w Schedule III of the Act, 1977. It is the case on behalf of the petitioner that however the respondent authority beyond the scope of their jurisdiction defined under the Act and in violation of provisions thereof, by impugned order had levied entertainment tax while subjecting the income generated through the sale of tickets of the musical concert. That being aggrieved and dissatisfied with the the imposition / levy of the entertainment tax of aforesaid musical concert and / or on the proceeds of the event/ musical concert organized by the petitioner, the petitioner has preferred by the present Special Civil Application under Article 226 of the Constitution of India.
3.0. Shri Mihir Thakore, learned Senior Advocate has appeared with Shri Viral K Shah, learned advocate for the petitioner and Shri Kamal Trivedi, learned Advocate General has appeared on behalf of the respondent State.
4.0. Shri Mihir Thakore, learned counsel for the petitioner has Page 2 of 18 HC-NIC Page 2 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT heavily relied upon Section 3, 3A and Schedule III of the Act, 1977.
4.1. Shri Mihir Thakore, learned counsel for the petitioner has submitted that the musical live concert organized by the petitioner on 24.12.2016 would fall in the exempted category in view of the provision contained in Section 3A r/w Schedule III of the Act.
4.2. It is vehemently submitted by Shri Mihir Thakore, learned counsel for the petitioner that as per Section 3A of the Act, which has been amended subsequently, notwithstanding anything contained in Section 3, there shall not be levied and paid tax to the State Government on any payment for admission to entertainments specified in the Schedule III. It is submitted that Section 3 is charging Section which provides that there shall be levied and paid to the State Government and on every payment for admission to an entertainment a tax. It is submitted that however as per Section 3A, notwithstanding anything contained in Section 3, there shall not be levied and paid the tax to the State Government on any payment for admission to entertainments specified in the Schedule III. It is submitted that as per Schedule III which has been inserted by Gujarat Act 8 of 1998, all kinds of musical programmes including musical nights and opera would fall under Schedule III and therefore, all kinds of musical programmes including musical nights and opera shall be exempted from payment of entertainment tax in view of specific provision contained in Section 3 A of the Act. It is vehemently submitted by Shri Mihir Thakore, learned counsel for the petitioner that even departmental communication dated 18.02.2016 shall have no application in the facts and circumstances of the present case. It is vehemently submitted by Shri Mihir Thakore, learned counsel for the petitioner that even otherwise the said internal departmental communication would be contrary to Section 3A r/w Page 3 of 18 HC-NIC Page 3 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT Schedule III of the Act, 1977.
4.3. It is further submitted by Shri Mihir Thakore, learned counsel for the petitioner that as held by the Hon'ble Supreme Court in catena of decisions that while interpreting taxing statute, if two interpretations are possible, the interpretation in favour of the assessee should be adopted..
4.4. It is vehemently submitted by Shri Mihir Thakore, learned counsel for the petitioner that as such Section 3 A is very clear and therefore, Golden Rule of interpretation is required to be applied. It is submitted that therefore, while interpreting Section 3A of the Act, literal meaning is required to be given, more particularly, when the language used in Section 3A is very clear. It is submitted that nothing is required to be added while interpreting and considering Section 3A of the Act, more particularly, when language is absolutely unambiguous and clear.
In support of his above submission, Shri Thakore, learned counsel for the petitioner has relied upon the following decisions of the Hon'ble Supreme Court.
1.0. A.V.Fernandez vs. State of Keralla reported in AIR 1957 SC 657. 2.0. The Commissioner of Income Tax Bombay City vs. The Provident Investment Co. Ltd reported in AIR 1957 SC 664.
3.0. Central India Spinning & Waeving and Manufacturing Co Ltd vs. The Municipal Committee, Wardha reported in AIR 1958 SC 341. 4.0. Collector of Estate duty vs. M.S.R. Kanakasabai and Othes reported in AIR 1973 SC 1214.
5.0. Alladi venkateshwarlu And others vs. Government of A.P. And Another reported AIR 1978 SC 945.
6.0. Polester & Co. Ltd vs. Addl. Commissioner of Sales Tax reported in AIR 1978 SC 897.
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7.0. M/s. Mysore Minerals Ltd vs. The Commissioners of Income Tax, Banglore reported in AIR 1999 SC 3185.
8.0. Union of India vs. Onkar S Kanwar reported in AIR 2002 SC 3563.
Making above submissions and relying upon the above decisions, it is requested to admit / allow the present petition.
5.0. Present petition is vehemently opposed by Shri Kamal Trivedi, learned Advocate General for the State. An affidavit in reply is filed on behalf of State Authority opposing the present petition.
5.1. Shri Trivedi, learned Advocate General has opposed the present petition by submitting that against the impugned order/ communication a statutory alternative efficacious remedy is available with the petitioner. It is submitted that even the petitioner was called upon to submit details at least by three communications, however the petitioner failed to submit any detail and therefore, the authority was required to get the details from the internet website "book my show" and thereafter appropriate authority has passed the impugned order on 27.01.2017. It is submitted that against the impugned order dated 27.01.2017, further appeal is provided under Section 12 of the Act and therefore, the petitioner may be relegated to avail said statutory efficacious and adequate remedy.
5.2. It is vehemently submitted by Shri Kamal Trivedi, learned Advocate General that impugned action of the respondent - State to levy the entertainment tax on such events like the event organized by the petitioner is absolutely in consonance with the provisions of the Act, more particularly, Sections 3, 3A, 29 r/w Schedule III. It is submitted that impugned levy of entertainment tax on such event which as such is Page 5 of 18 HC-NIC Page 5 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT a commercial entertainment event of musical singing concert is absolutely in consonance with the object and enactment of provision of Section 3A of the Act, 1977. It is vehemently submitted by Shri Kamal Trivedi, learned Advocate General that objective behind enacting the provision of Section 3A of the Act, 1977 in the year 1998, vide Section 2 of Acct No. 8 of 1998 was that prior to year 1998 organizers had to take permission for exemption from payment of Entertainment Tax or organizing performance of cultural and sports activities. The State Government was committed to encourage the conventional form of cultural performances, such as music, dance, drama, circus, magic shows, puppet show and Mushaira, therefore, a proposal was made in the Budget Speech of the Hon'ble Finance Minister delivered in the Assembly on 30.06.1998, assuring that the aforesaid conventional activities and cultural performances would be exempted from payment of Entertainment tax, so as to avoid every time taking permission for exemption from payment of Entertainment Tax and it was proposed to place such exempted activities by way of specific provisions and it was proposed that detailed list containing such activities and programme will be in the form of Act pertaining to the Entertainment Tax. Shri Kamal Trivedi, learned Advocate General has strongly and heavily relied upon the speech delivered by the Hon'ble Finance Minister delivered on the floor of house while introducing Section 3A of the Act and Schedule III.
5.3. Strongly relying upon the Budget Speech of the Hon'ble Finance Minister, it is submitted that on bare perusal of the same, it suggests that the intention of the Legislature behind insertion of the provisions of section 3A along with the ScheduleIII in the Act is to see that the conventional activities and programmes are exempted from payment of Entertainment Tax, and definitely not the entertainments which have commercial element involved in organizing such events. It is Page 6 of 18 HC-NIC Page 6 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT submitted that on such event organizers are charging huge amount ranging from Rs. 500 even beyond Rs. 500/ ticket / entry and their intention is only of commercial in nature and it can never be said to encourage conventional activities. It is submitted that with above object, contained in Budget Speech delivered by the Hon'ble Finance Minister made while introducing Section 3(A) and Schedule III of the Act, thereafter the State Legislature amended the Act by inserting new Section 3A in the Act. It is submitted that even the statement of objects and reasons of aforesaid Amended Act, 1998 states that this Bill seeks to insert new section 3A in the Gujarat Entertainment Tax Act, 1977 with a view to give effect to the proposal contained in the Budget Speech of the Finance Minister in the Assembly on the 30th June, 1998. It is submitted that therefore, the purpose and object of Section 3A is required to be considered along with Budget Speech of the Finance Minister in the assessmbly on 30.06.1998, while considering the object and purpose of insertion of Section 3A of the Act, 1977. It is submitted that therefore, the budget speech of the Hon'ble Finance Minister in the Assembly in juxtaposition with the provisions of statement of Objects & Reasons, provisions of section 3A and ScheduleIII, leads to only one conclusion that the exemption has been granted from payment of Entertainment Tax to the programmes and activities which are in the nature of conventional cultural activities and not involving commercial element. It is submitted that all the programmes and activities mentioned in ScheduleIII are in the nature of cultural shows, viz. musical programmes, dramas, plays, puppet shows, rasgarba, Bhawai, Ram Leela, Doha, Dayaro, Lok Natya, exhibition of art, skills and things. Similarly, sports activities, excluding the sports or rides provided in water parks and holiday resorts. It is submitted that the idea behind exempting such activities is loud and clear inasmuch as, to maintain and promote noncommercial activities being conducted for educational, Page 7 of 18 HC-NIC Page 7 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT medical, charitable, philanthropic or cultural purpose in contradistinction with a commercial or profitmaking venture like the one involved in the present matter.
5.4. It is submitted that by inserting Section 3A and Schedule III of the Act, the main purpose of the statute is for encouraging the amateur artistes engaged in musical nights on noncommercial basis and for encouraging noncommercial programs. It is submitted that was the precise reason for the State Government to issue the clarification dated 18.2.2016 wherein it was categorically explained that the purpose of giving exemption to such programmes was that the activities by amateur artistes engaged in noncommercial activities and programmes and purely conventional programmes get encouragement and support.
5.5. It is further submitted that even controversy in the present petition is also required to be viewed from another angle. It is submitted that as per Section 29 of the Act, the State Government may by notification in the official gazette exempt either wholly or partly, any entertainment or class of entertainments from payment of tax; (a) where such entertainment is provided for any educational, medical, charitable, philanthropic or such other purpose; or where the State Government considers it necessary so to do in the public interest. It is submitted that when such Section 34 was inserted, Section 29 of the Act was very much there and even the programmes mentioned in Schedule III were eligible for exemption as per Section 29 of the Act provided conditions mentioned in Section 29 of the Act are complied with. From the Budget Speech delivered by the Hon'ble Finance Minister, it appears that as it was found that every time while organizing of such events / activities organizers were required to take permission for exemption and therefore, it was thought it fit to exempt such activities from payment of Page 8 of 18 HC-NIC Page 8 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT entertainment tax and for which it was proposed to have a separate provision / Section. It is submitted that therefore, Section 3A of the Act has direct nexus and connection with the exemption provision i.e. Section 29 of the Act. It is submitted that therefore, another object and purpose of the Act was to avoid making such application for exemption every time. It is submitted that therefore, Section 3A and Schedule III are to be read along with exemption provision contained in Section 29 of the Act. It is submitted that as such intention of the legislature was never to give exemption from payment of entertainment tax on all activities mentioned in Schedule III irrespective of fact where there is element of commercial nature and / or profit making or not.
5.6. Shri Trivedi, learned Advocate General has heavily relied upon the following decisions of the Hon'ble Supreme Court in support of his submission that while interpreting Section 3A and purpose of Section 3A, the Budget Speech delivered by the Hon'ble Finance Minister on the floor house, is also required to be considered.
1. K.P. Varghese vs. Income Tax Officer and Anr reported in(1981) 131 ITR 597(SC)
2. Sole, Trustee, Loka Shikshana Trust vs. CIT reported (1975) 101 ITR 234 (SC).
3. Indian Chamber of Commerce vs. CIT reported in (1975) 101 ITR 796(SC).
4. Additional CIT vs Surat Art Silk Cloth Manufactures Association reported in (1980) 121 ITR 1 (SC).
Making above submissions, it is requested to dismiss the present petition.
6.0. Heard the learned advocates for the respective parties at Page 9 of 18 HC-NIC Page 9 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT length. The short question which is posed for the consideration of this Court is whether the action of the respondent to levy the entertainment tax under the Gujarat Entertainment Tax Act, 1977 with respect to the musical concert organized by the petitioner, organized on 24.12.2016 is legal ?
7.0. It is the case on behalf of the petitioner that as per Section 3A of the Act as inserted subsequently, notwithstanding anything contained in Section 3, the entertainment tax on any payment for admission to entertainments specified in Schedule III is not leviable. It is the case on behalf of the petitioner that all kinds of musical programmes including musical nights and opera would fall under Schedule III and therefore, on any payment for admission of such musical nights, more particularly, on such musical concert organized by the petitioner the entertainment tax is not leviable.
8.0. On the other hand, it is the case on behalf of the State that relevant provisions of Entertainment Tax Act, more particularly, Section 3, 3A, 29 and Schedule III are required to be read together and harmoniously and legislative intent of insertion of Section 3A of the Act, which can be gathered from the Speech delivered by the Hon'ble Finance Minister made while proposing to insert Section 3A, also is required to be considered. Therefore, it is the case on behalf of the State that while inserting Section 3A of the Act, the legislative intent was not, not to levy the entertainment tax on all musical nights, opera etc. and it was only with respect to encourage acting, cultural activities etc. and not the entertainment provided on commercial basis. Therefore, it is the case on behalf of the State that Section 3A is required to be read with Section 29 of the Act and Speech delivered by the Hon'ble Finance Minister made on the floor of house while proposing to insert Section 3A of the Act.
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9.0. While considering the question posed in the present petition, the budget speech of the Hon'ble Finance Minister while proposing to insert Section 3A and the statement of objects and reasons of the Amendment Act, 1998, by which, Section 3A was inserted are required to be referred to so as to appreciate the object and purpose and the legislative intent of insertion of Section 3 A of the Act, which reads as under:
"The State Government is committed to encourage acting, cultural activities, sports activities. For organizing such activities, the organizers have to take permission for exemption. I am making a statement that such activities will be exempted from payment of Entertainment Tax, i.e. music, dance, drama, cultural programmes, circus, magic shows, puppet shows and Mushaira. Similarly, all sports activities will be exempted from payment of Entertainment Tax. A detailed list containing such activities and programmes will be in the form of Schedule in the Act pertaining to Entertainment Tax."
9.1. The statement of Objects & Reasons of the aforesaid Amendment Act of 1998 is reproduced hereunder for ready reference.
"This Bill seeks to insert new section 3A in the Gujarat Entertainment Tax Act, 1977 with a view to giving effect to the proposal contained in the Budget Speech of the Finance Minister in the Assembly on the 30th June, 1998."
9.2. At this stage, some of the provisions of the Act, the entertainment tax prior to insertion of Section 3A of the Act are also required to be referred to, which are as under:
3. Tax on payments for admission to entertainments : (1) There shall be levied and paid to the State Government on (a) every payment for admission to an entertainment, a tax, at such rate not exceeding 25% of such payment, as the State Government may, by notification in the Official Gazette, fix and different rates may be fixed in respect of different classes of entertainments;Page 11 of 18
HC-NIC Page 11 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT Provided that the payment for admission to an entertainment shall not be less than rupees ten per person.
(b) every payment for admission of a motor vehicle into the auditorium of a cinema known as DriveinCinema, if such payment is separately charged by the proprietor for such admission, a tax at the rate of 25% of such payment (3) Where the payment for admission to an entertainment is made wholly or partly by means of lump sum paid as a subscription or contribution to any person, or for a season ticket or for the right of admission to a series of entertainments or to any entertainment during a certain period of time or for any privilege, right, facility or thing combined with the right of admission to any entertainment or involving such right of admission without further payment or at a reduced rate, the tax shall be levied on the amount of the lump sum but where the prescribed officer is of opinion that the payment of lump sum or any payment for a ticket, represents payment for other privileges, rights or purposes besides the admission to an entertainment the tax shall be levied on such an amount as appears to the prescribed officer to represent the right of admission to the entertainment in respect of which the tax is payable.
[(4) Save as otherwise provided in this Act, every ticket, pass or other document issued for admission to an entertainment shall state therein the amount of payment for admission to such entertainment, and the amount of tax payable under Sec.3 or 4 on such payment for admission.
29. Exemption : (1) The State Government may, by notification in the Official Gazette, exempt either wholly or partly, any entertainment or class of entertainments from payment of tax. [x x x] subject to such conditions as may be specified therein
(a) where such entertainment is provided for any educational, medical, charitable, philanthropic or such other purpose; or
(b) where the State Government considers it necessary so to do in the public interest.
(2) Every notification issued under subSection(1) shall be laid for not less than thirty days before the State Legislature as soon as possible after it is issued and shall be subject to rescission by the State Legislature or to such modification as the State Legislature may make during the session in which it is so laid or the session Page 12 of 18 HC-NIC Page 12 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT immediately following.
(3) Any rescission or modification so made by the State Legislature shall be published in the Official Gazette and shall thereupon take effect.
9.3. Thus from the aforesaid, it can be seen that prior to insertion of Section 3A, as per Section 29 of the Act any entertainment or class of entertainment provided for educational, medical, charitable, philanthropic or such other purpose, were eligible for exemption either wholly or partly from payment of entertainment tax. However, the organizations were required to take permission every time for exemption for payment of entertainment tax for organizing purpose of cultural and sports activities etc. It appears that therefore, to do away taking the permission every time, it was thought it fit to insert a special provisions so that activities like acting, cultural activities, sports activities etc. may be exempted from payment of entertainment tax and more particularly, music, dance, drama, circus, magic shows, puppet show and Mushaira. Therefore, the object and purpose was to encourage the cultural activities, sports activities and in furtherance of the same, the activities like music, dance, drama, circus, magic shows, puppet show and Mushaira were proposed to be exempted from payment of entertainment tax by putting them in a special Schedule and for that purpose only Section 3A was inserted. Thus, legislative intent as a whole by inserting Section 3A seems to be to grant exemption from payment of entertainment tax on such activities i.e. music, dance, drama, circus, magic shows, puppet show and Mushaira with a view to encourage such activities, cultural activities and sports activities. In view of statement of objects and reasons of the Amendment Act, 1998, the State Government with a view to give effect to the proposal contained in the Budget Speech of the Finance Minister in the Assembly on the 30th June, 1998, Section Page 13 of 18 HC-NIC Page 13 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT 3A came to be inserted. Thus, even the statement of objects and reasons of Amendment Act, 1998 was to give effect to the proposal contained in Budget Speech of the Finance Minister. Thus, the legislative intent seems to be to grant exemption to encourage activities, cultural activities and sports activities i.e. music, dance, drama, circus, magic shows, puppet show and Mushaira and the legislative intent was not, to grant exemption on all such activities whether performed on commercial basis or not. The legislative intent seems to be not to give exemption to such activities carried on for commercial purpose. The legislative intent seems to be to grant exemption from payment of entertainment tax with regard to the programmes and activities which are in the nature of conventional cultural activities and not involving commercial element. Thus, the legislative intent / idea behind exempting such activity is to maintain and promote non commercial activities being conducted for educational, medical, charitable, philanthropic or cultural purpose in contradistinction with a commercial or profitmaking venture like the one involved in the present case. As observed herein above, prior to Amendment Act, 1998 i.e. insertion of Section 3A any entertainment or class of entertainment provided for any educational, medical, charitable, philanthropic or such other purpose were exempted either wholly or partly from payment of tax. Therefore, the exemption provided under Section 3A when read together with Budge Speech delivered by the Hon'ble Finance Minister made in the Assembly on 30.06.1998 read with statement of objects and purpose of Amendment Act, 1998, the intention seems to be to grant exemption any entertainment or class of entertainment where such entertainment is provided for any educational, medical, charitable, philanthropic or such other purpose and such exemption does not seem to be meant for the activities / entertainment having a commercial element.
To find out real intent / legislative intent of a party statute, as Page 14 of 18 HC-NIC Page 14 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT observed by the Hon'ble Supreme Court in the case of K.P. Varghese (supra), the speech made by the Finance Minister is expressly relevant. It is further observed and held that speech made by the mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which legislation is enacted. It is further observed and held in the said decision that interpretation of statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible.
9.4. The Hon'ble Supreme Court in the case of K.P. Varghese (supra) referring to a Minister Speech piloting a Finance Bill, has observed as under:
"Now it is true that the speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is in accord with the recent trend in juristic thought not only in Western countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. In fact there are at least three decisions of this Court, one in Loka Shikshana Trust v. Commissioner of IncomeTax [1975] 101 ITR 234(SC) the other in Indian Chamber of Commerce v. Commissioner of Incometax [1975] 101 ITR 796(SC) and the third in Additional Commissioner of Incometax v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1(SC) where the speech made by the Finance Minister while introducing the exclusionary clause in Section 2 Clause (15) of the Act was relied upon by the Court for the purpose of ascertaining what was the reason for introducing that clause. The speech made by the Finance Minister while moving the amendment introducing Sub Page 15 of 18 HC-NIC Page 15 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT section (2) clearly states what were the circumstances in which Subsection (2) came to be passed, what was the mischief for which Section 52 as it then stood did not provide and which was sought to be remedied by the enactment of Subsection (2) and why the enactment of Subsection (2) was found necessary. It is apparent from the speech of the Finance Minister that Sub section(2) was enacted for the purpose of reaching those cases where there was understatement of consideration in respect of the transfer or to put it differently, the actual consideration received for the transfer was 'considerably more' than that declared or shown by the assessee, but which were not covered by Subsection (1) because the transferee was not directly or indirectly connected with the assessee. The object and purpose of Subsection (2), as explicated from the speech of the Finance Minister, was not to strike at honest and bonafide transactions where the consideration for the transfer was correctly disclosed by the assessee but to bring within the net of taxation those transactions where the consideration in respect of the transfer was shown at a lesser figure than that actually received by the assessee, so that they do not escape the charge of tax on capital gains by understatement of the consideration. This was real object and purpose of the enactment of Subsection (2) and the interpretation of this subsection must fall in line with the advancement of that object and purpose. We must therefore accept as the underlying assumption of Subsection (2) that there is understatement of consideration in respect of the transfer and Subsection (2) applies only where the actual consideration received by the assessee is not disclosed and the consideration declared in respect of the transfer is shown at a lesser figure than that actually received."
9.5. In the case of Commissioner of Income Tax vs. Meghalaya Steels Ltd reported in (2016) 383 ITR 217 (SC), the Hon'ble Supreme Court has observed that speech of a Minister is relevant in so far it gives background for the introduction of a particular provision. It is observed that it is not determinative of the construction of the provision but gives the reader an idea as to what was in the Minister's mind when he sought to introduce it.
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9.6. It is apparent from the Speech of the Finance Minister while introducing Amendment Act, 1998 i.e. Section 3A and the Schedule that the same was enacted in furtherance of the policy of the Government to encourage cultural and sports activities i.e. music, dance, drama, circus, magic shows, puppet show and Mushaira and for organizing such activities, the organizers were required to take permission for exemption and therefore, it was proposed to exempt such activities and programmes to put in the form of schedule in the Act.. Thus, the exemption from payment of entertainment tax of such activities i.e. music, dance, drama, circus, magic shows, puppet show and Mushaira was to encourage cultural activities and sports activities and such exemption does not seem to be provided for such programmes involving commercial element.
9.7. Therefore, considering the legislative intent of providing separate schedule having such activities which is curled out and / or it can be gathered from the budget speech of the Finance Minister and the object and purpose of Amendment Act, 1998 and Section 3, 3A and schedule are read together with Section 29 r/w budget speech of the Hon'ble Finance Minister there can be only one conclusion that entertainment / activities mentioned in Schedule III, if they are performed in commercial manner and for profit making and which has no element of educational, medical, charitable, philanthropic or such other purposes, are not entitled to exemption from payment of entertainment tax like musical concert performed in the present case which has commercial element and the sole purpose is for profit making and all those activities mentioned in Schedule III shall be entitled to exemption from entertainment tax if there is an element of educational, medical, charitable, philanthropic or such other purposes and element is Page 17 of 18 HC-NIC Page 17 of 18 Created On Sun Aug 13 15:59:14 IST 2017 C/SCA/2444/2017 CAV JUDGMENT non commercial and non profit making. Therefore, the submission on behalf of the petitioner that for all the activities / entertainment mentioned in Schedule III irrespective of whether they are performed for any educational, medical, charitable, philanthropic or such other purposes or irrespective of fact whether they are performed for commercial purpose or not and / or there is a commercial element on such activities / entertainment, they shall be exempted from payment of entertainment tax cannot be accepted.
In view of the above discussion, whether in the present case the respondent authorities are justified in calling upon the petitioner to pay entertainment tax on the programmes / live musical concert organized by them or not, it is an admitted position that the live musical concerts organized by the petitioner on 24.12.2016 was admittedly not for any educational, medical, charitable, philanthropic or such other purposes. It is an admitted position that same is having commercial element and even they charge also very high entry fee ranging from Rs. 500/ above and may be upto to Rs. 5000/ per entry. Under the circumstances and for the reasons stated above, it cannot be said that the action of the respondent can be said to be in any way illegal and / or contrary to the legislative intent of Section 3A and Schedule III of the Entertainment Tax Act.
10. In view of the above and for the reasons, present petition fails and same deserve to be dismissed and is accordingly dismissed. Notice discharged.
sd/ (M.R. SHAH, J.) sd/ (B.N. KARIA, J.) Kaushik Page 18 of 18 HC-NIC Page 18 of 18 Created On Sun Aug 13 15:59:14 IST 2017