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1.The petitioner is the owner of two hotels, the Oberoi and Oberoi Maidens. In both the hotels at the relevant stage of time discotheques were being run under the name and style of `Tabela' and `Sensation' respectively. The question raised in these two writ petitions is about the liability of the petitioner company to pay entertainment tax on the cover charges/fixed fee imposed in respect of the entry into the discotheques.

2.The entertainment tax is sought to be charged under the provisions of U.P. Entertainment and Betting Tax Act, 1937 (hereinafter referred to as the said Act) as extended to the then union territory of Delhi. The relevant provisions of the said Act are as under :

3.The petitioner claims that the purpose of running the discotheques was to provide a different menu and atmosphere as compared to the other restaurants and the hotels and the discotheques were mainly restaurants with a dance floor for any customer who may wish to dance to the recorded music. The claim thus made is that no kind of entertainment or amusement was provided in the restaurants either by way of live band, floor shows or cabaret. Thus there was no entertainment provided as defined under Section 2(3) of the said Act.

4.There is no dispute about the fact that fixed fee charged for entry into the restaurant was imposed for purpose of restricting the entry and it is stated to be for the purpose of regulating the number and nature of persons who seek entry into the restaurant. The guests were also required to pay separately for the food and drinks consumed at the restaurant but fixed charge was adjusted against the order placed for eats and drinks. However, in case the bill for eats and drinks was less than the fixed charge, the fixed charge, in any case was payable and if it was in excess of the fixed charge, the amount in excess of the fixed charge was payable. It is also stated that no person admitted to the restaurant was permitted to remain present without ordering any item of food or drink even if the fixed charge had been paid. Both the discotheques were started in the year 1970 and were ultimately closed in the year 1985.

12. Learned counsel for the petitioner, however, submitted that the present case did not satisfy the test laid down in para 12 of the judgment since there was in fact no show but only the entrants in the restaurant utilised the dance floor.

13.It may, however, be noticed that learned counsel for the petitioner very fairly brought to the notice of this Court the judgment of the learned Single Judge of the Bombay High Court (as he then was) in East India Hotels Ltd. V. State of Maharasthra,1985 (LxxxvII) Bombay Law Reports 90, which dealt with the Bombay Entertainment Duty Act having similar provisions in respect of a hotel of the petitioner in Bombay where a discotheque was being run. The definition of ''Entertainment'' was given a wide in erpretation in respect of such cover charge and it was held that in order to constitute entertainment it is not necessary that there must be a show or something objective outside the person entertained. It was thus held that payment for admission into discotheque is a payment for admission to an entertainment. However, relief was provided to the petitioner in view of the fact that the said judgment dealt with the entry of persons who were members of the club and privileges and facilities other than the right of admission to the discotheque as a consequence of the payment fixed charge was held not liable to entertainment tax. It was thus directed that the authorities would have to determine what part of membership subscription represents payment of privileges, rights or purpose other than the admission to the entertainment in the discotheque which would be exempted.