Indusind Media &
Commun. Ltd. & ANR. Vs. Mamlatdar & Ors.
J U D G M E N T
ANIL R. DAVE, J.
aggrieved by the Judgement and Order dated 13.5.2010, delivered in SCA Nos. 13586-13589/2009
by the High Court of Gujarat at Ahmedabad, these appeals have been filed by the
facts in a nutshell are that the appellants are engaged in transmitting signals
from their `Head Ends' located at Ahmedabad to various cable operators, who in turn
receive the same and transmit by way of cables to their subscribers. According to
the appellants, they are not liable to pay Entertainment Tax under the
provisions of the Gujarat Entertainment Tax Act, 1977 (hereinafter referred to as
`the Act'). According to the appellants, they are transmitting signals to cable
operators and the cable operators thereafter transmit signals to actual
subscribers who are entertained. In the circumstances, according to the
appellants, they are neither `Proprietors' nor providing any entertainment to
anyone and, therefore, they are not liable to pay any tax under the Act.
the other hand, the case of the respondent authorities is that the appellants
did not get themselves registered under the Act on the pretext that they are not
providing entertainment. According to the respondent authorities, the
appellants are `Proprietors' as per the provisions of the Act and, therefore,
they are liable to pay Entertainment Tax.
to the appellants, some officers of the respondents visited the office premises
of the appellants and switched off all the equipments and removed the connectors.
Under such circumstances, due to threats and coercion, according to the appellants,
they were constrained to deposit a cheque for Rs. 5,00,000. A further amount of
Rs. 6,88,000 was also paid by the appellants as demanded by the respondents
under protest, pending outcome of the legal proceedings. Thereafter, the appellants
applied for registration as required under the Act without prejudice to their rights.
the Mamlatdar i.e. the Prescribed Officer appointed under the Act, passed an Order
dated 18th October, 1999, whereby the appellants were made liable to pay Rs.6,88,840/-
by way of an Entertainment Tax and Rs.3,62,431/- as interest on the aforestated
amount, which had not been paid within the prescribed period and a fine of Rs.5,000/-
was also imposed by virtue of the said order. The validity of the said order was
challenged by the appellants but ultimately, the Commissioner of Entertainments
Tax had confirmed the aforestated order passed by the Mamlatdar. Being
aggrieved by the aforestated order passed by the Mamlatdar which had been confirmed
by the Commissioner of Entertainments Tax, the appellants had filed Special Civil
Application Nos.13586-13589 of 2009 in the High Court of Gujarat. The said applications
have been rejected and, therefore, the appellants have approached this Court
for challenging the validity of the same.
contentions raised on behalf of the appellants before this Court were to the effect
that the appellants were not `Proprietors' and they were not providing
entertainment and, therefore, no tax was to be paid by them. As no tax was to
be paid, the question of paying penalty and interest on late payment of tax would
also not arise. The same submission was made before the High Court, which had
not been accepted.
leaned counsel for the respondent authorities had justified the order passed by
the High Court confirming the order dated 18th October, 1999, passed by the
hearing the learned counsel and looking to the facts of the case, in our
opinion, the High Court was justified in confirming the order passed by the
Mamlatdar dated 18th October, 1999.
issues arise for our consideration in the present appeals viz.:
the appellants, who are Multi System Operators, are liable to pay Entertainment
the facts and circumstances of the case warrant imposition of penalty on the
appellants. The first issue is no longer res integra as this Court, in the case
of STATE OF WEST BENGAL v. PURVI COMMUNICATIONS (P) LTD., 2005 (3) SCC 711 has
held that 5even Multi-System Operators (MSO) would be liable to pay
It is not in dispute
that the appellants are Multi-System Operators, who transmit the signals to the
cable operators and in turn, the cable operators transmit signals to the
subscribers. In such a way, as the appellants are connected to an organisation
of the entertainment, they would be `Proprietors' as per the provisions of the Act.
Hence, this issue does not need any further consideration.
With regard to the
second issue, it was contended by the appellants that penalty under Section
9(3) of the Act can be imposed only if there is any wilfull mis-statement or
suppression of facts. In the instant case, the appellants were under a genuine belief
that they would not fall under the definition of `Proprietor' under the Act and
hence, imposition of penalty is unfair. It was further argued on behalf of the
appellants that the impugned order imposing the penalty is violative of the
principles of natural justice as no notice was issued under Section 9 of the
Act and also no opportunity of being heard was afforded to the appellants.
do not find any substance in the submission made on behalf of the appellants that
imposition of penalty is in violation of the principles of natural justice. We
find from the orders passed by the authorities that the appellants had given incorrect
information with regard to total number of connections given by them. The
requisite information was not provided by the appellants in spite of issuance of
notices and requests made to the appellants. In fact, notice had been issued
before imposition of penalty to the appellants as it can be seen from the
orders passed by the authorities but in spite of grant of sufficient opportunities,
the appellants did not give correct information and made an effort to evade payment
of Entertainment Tax by making wilfull mis-statements and suppression of facts.
In the circumstances, it cannot be said that the imposition of penalty is in
violation of the principles of natural justice.
the aforesaid reasons and for the reasons recorded by the High Court in the impugned
order, we do not find any substance in these appeals and, therefore, the
appeals are dismissed with no order as to costs.
(Dr. MUKUNDAKAM SHARMA)
(ANIL R. DAVE)