Markand Saroop Aggarwal & Ors Vs.
M. M. Bajaj & ANR [1978] INSC 180 (15 September 1978)
KAILASAM, P.S.
KAILASAM, P.S.
SINGH, JASWANT
CITATION: 1979 AIR 110 1979 SCR (1) 784 1979
SCC (1) 116
ACT:
Admission charges 'on per head' basis to the
nightly dinner-cum-cabaret programmes, whether liable to entertainment
tax-United Provinces Entertainment and Betting Tax, 1937 (as extended to Delhi)
Sections 2(1)(c), 3(1)(3), 4(1) and 5(3).
HEADNOTE:
The appellants are five partners of Lido
Restaurant, New Delhi and they charged 'on per head' basis in the nightly
dinner-cum-cabaret programmes. A complaint was filed by the Entertainment Tax
Inspector on behalf of the State, against them on the ground that they had
contravened the provisions of Section 4(1) and with Section 3(1) and Section
3(3) of the U.P. Entertainment and Betting Tax Act, 1937 as extended to Delhi
and punishable under Section 5(3) of the Act. The Trial Court acquitted the
accused on the ground that no offence against them had been established. On
appeal, the High Court found them guilty of the offences with which they were
charged, allowed the appeal, set aside the order of acquittal and imposed a
fine of Rs. 40/- each on the five partners of the Lido Restaurant directing
that the fines be paid in addition to the tax leviable under Section 3 of the
Act.
Dismissing the appeal by special leave, the
Court
HELD : 1. The United Provinces Entertainment
and Betting Taxes Act, 1937 (as extended to Delhi) is wider in scope and in
application. The definition of 'admission to an entertainment' in S. 2(1) and
'payment for admission' in Section 2(6) and used in Section 3(1) are widened so
as to embrace payment for any purpose whatsoever connected with an
entertainment and admission to place in which the entertainment is held.
[789G-H, 790A]
2. Admission to an entertainment would
include admission to any place in which entertainment is held and payment for
admission would include any payment for any purpose whatsoever connected with
an entertainment which a person is required to make as a condition of attending
or continue to attend the entertainment. Cabaret show is an item of
entertainment. [787G-H]
3. On the facts of the case it would be an
admission to an entertainment. Though it may be for taking tea or dinner for a
minimum charge, as the admission is to a place where the entertainment is held,
it would come within the definition under section 2(1). Further, the payment of
Rs. 5/- or Rs. 10/- though it is stated to be for the dinner, as it is
connected with an entertainment and as the person is making the payment as a
condition for attending or continuing to attend the entertainment, it would
attract the definition of payment for admission under section 2(6)(iv) of the
Act. [788G-H, 789A] Williams v. Wright, [1897] 13 T.L.R. 551, Kitchner v. Evening
Standard Co. Ltd., [1936] 1 K.B. 576 and J. Lyons & Co. Ltd. v. Fox, [1919]
1 K.B. 11; discussed and quoted with approval;
785 Attorney General v. London Casing Ltd.,
[1937] 3 All E.R. 858; explained and applied.
Attorney General v. Mcleod, [1918] 1 K.B. 13,
Attorney General v. Swan, [1922] 1 K.B. 682, Attorney General Arts Theatre of
London Ltd., [1933] 1 K.B. 439 and Attorney General v. South port Corporation,
[1933] All E.R. 971;
referred to.
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 368 of 1976 Appeal by Special Leave from the Judgment and Order
dated 17-2-1976 of the Delhi High Court in Criminal Appeal No. 141 of 1971.
Frank Anthony and N. C. Sikri for the
Appellant.
S. N. Anand and R. N. Sachthey for Respondent
No. 1 The Judgment of the Court was delivered by KAILASAM, J. This appeal is
preferred by the five partners of Lido Restaurant, Connaught Circus, New Delhi,
by special leave against the Judgment and order of the High Court of Delhi in
Criminal Appeal No. 141 of 1971.
A complaint was filed by the Entertainment
Tax Inspector on behalf of the State in the court of the Judicial Magistrate,
First Class, against the appellants on the ground that they had contravened the
provisions of section 4(1) read with section 3(1) and section 3(3) of the U.P.
Entertainment and Betting Tax Act, 1977, as extended to Delhi and punishable
under section 5(3) of the Act. The trial court acquitted the accused on the
ground that no offence against them had been established. On appeal by the
Entertainment Tax Inspector, the High Court found that the appellants were
guilty of the offences with which they were charged, allowed the appeal, set
aside the order of acquittal and imposed a fine of Rs. 40/- each on the five
partners of the Lido Restaurant and directed that the fines be paid in addition
to the tax leviable under section 3 of the Act.
P.W. 3, Bodh Raj, was the entertainment tax
inspector at the material time. On 15th November 1968, under the instruction of
his superior officer, he went along with Bajaj, P.W.5, inspector, and visited
Lido Restaurant, Connaught Circus, at 10 P.M. and remained in the Restaurant
till 11.15 P.M. Cabaret programme was given in the restaurant and a band was in
attendance. P.W. 3 contacted the manager and recorded a statement which is Ex.
B.1, in which the manager, V. N. Sood, stated that they were holding cabaret
programme from 5th November 1968 daily and that the service is effected on an a
la carte basis. The minimum charges for eatables at the time of 786 cabaret are
Rs. 5/- at evening tea, and Rs. 10/- at dinner time from 10 P.M. onwards.
According to his statement, there was no admission charge or fee of any kind.
P.W. 3 also examined cash memos and found at that time 72 persons were present
in the restaurant for taking dinner. The evidence of the inspector is that no
charges for entry to the restaurant was collected except a minimum charge of
Rs. 5/- for the evening and Rs. 10/- for the night which was adjustable towards
the food. The Accountant of the restaurant, who was examined as P.W. 4,
explained that they were collecting the charges for the food consumed by the
customer in the restaurant and no money was being charged for cabaret or any
other type of entertainment. The evidence of P.W. 5, the inspector,
Entertainment Tax, is that a sum of Rs. 10/ were the minimum charges for the
food including band performance.
A sum of Rs. 10/- were charged on per head
basis, in the nightly dinner-cum-cabaret programme.
On the evidence adduced, the trial court
found that the cabaret performance in a restaurant is essentially an item of
entertainment. It also found that Rs. 5/- and Rs. 10/- were minimum charges for
the afternoon tea and dinner. It is also clear that these amounts were adjusted
towards the eatables that were consumed. It is not the case for prosecution
that the price of eatables were raised for the purpose of covering the
entertainment, but it is seen from the admission of the manager as well as the
evidence on record that whether a person consumed anything or not, he had to
pay Rs. 5/- for the evening and Rs. 10/- for the night. If he consumes eatables
for more than Rs. 5/- in the evening and for more than Rs. 10/- in the night,
the amount of Rs. 5/- and Rs. 10/- paid by him would be adjusted. On these
facts, the question arose whether any charges were collected for the cabaret
entertainment. The trial court came to the conclusion that nothing was charged
for cabaret performance and the minimum charges had only been fixed so that no
undesirable element can get into the restaurant. The High Court came to a
different conclusion and found that the idea behind the requirement of payment
of minimum charge was to cover the cabaret programme and therefore would
attract entertainment duty payable under the law.
In order to decide the question, the relevant
provisions of the law under which the accused are charged will be referred to.
The United Provinces Act 8 of 1937 was passed on 22nd October 1937 for the
purpose of imposing a tax on entertainment and other amusements and on certain
forms of betting. Section 3(1) provides that there shall be levied and paid to
the Central Government on all payments for admission to any entertainment, a
tax at the rate specified in the section.
787 Section 3(3) provides for amounts payable
on lump subscription or contribution or on season ticket and other matters
which would be referred to a little later.
Section 4(1) runs as follows:- "4.(1)
Save as otherwise provided by this Act, no person, other than a person who has
some duty to perform in connection with the entertainment or a duty imposed
upon him by law, shall be admitted to any entertainment, except with a ticket
stamped with an impressed embossed, engraved or adhesive stamp (not before used)
issued by the Central Government for the purposes of revenue and denoting that
the proper entertainments tax payable under section 3 has been paid." The
words "payment for admission" in section 3(1) is defined under
section 2(6) as follows:- "Payment for admission" includes:- (i) any
payment made by a person who, having been admitted to one part of a place of
entertainment is subsequently admitted to another part thereof, for admission
to which a payment involving tax or more tax is required;
(ii) any payment for seats or other
accommodation in a place of entertainment;
(iii) any payment for a programme or synopsis
of an entertainment; and (iv) any payment for any purpose whatsoever connected
with an entertainment which a person is required to make as a condition of
attending or continuing to attend the entertainment in addition to the payment,
if any, for admission to the entertainment." Admission to an entertainment
is defined under section 2(1) as including admission to any place to which the
entertainment is held. Under section 3(1), all payments for admission to any
entertainment is taxable. Admission to an entertainment would include admission
to any place in which entertainment is held and payment for admission would
include any payment for any purpose whatsoever connected with an entertainment
which a person is required to make as a condition of attending or continue to
attend the entertainment. It is not in dispute that cabaret show is an item of
entertainment. The only question therefore that arises for consideration in
this case is, whether any payment 788 for admission to the entertainment is
made. The contention on behalf of the prosecution is that by levying a minimum
charge of Rs. 5/- for the evening and Rs. 10/- for the night, there is a payment
for the entertainment also. It is the case of the defence that there is no levy
for the entertainment and the minimum fee is levied only for the purpose of
keeping out undesirable elements from getting into the restaurant. By levying a
minimum fee, the customer is liable to pay the amount whether he consumes any
eatable or not. Two advertisements which were inserted by the restaurant
invited customers for the show. In the issues dated November 15, 1968 and
November 9, 1968, marked as Ex.
'A' and 'C' of the Hindustan Times, it is
stated- "LIDO Air-conditioned RESTAURANT Opposite Super Bazar CABARET
Every day at 7-00 & 10-00 P.M.
(Please take seats by 6-30 & 9-30 P.M.)
*Welcome by Ladies *Music *Large Selection in Eatables *Open till late night
Seat Reservation on Tel. 44110" The customers are invited for the cabaret
to take their seats by 6.30 and 9.30 P.M. and to listen to music during which
time large selection of eatables would be available.
It is not alleged that any extra rate is
charged for the eatable because of the show but it is not disputed that a
minimum fee is levied, for taking a seat for witnessing the show and for taking
tea or dinner. If the normal rates are charged for the items consumed and
incidentally a show is put up, it cannot be said that any payment is made for
admission for the entertainment but requiring a minimum of Rs. 5/- and Rs. 10/-
whether the customer consumed any eatable or not would lead to an irresistible
conclusion that a payment of fee for admission to the entertainment is also
included.
On the facts of the case it would be an
admission to an entertainment. Though it may be for taking tea or dinner for a
minimum charge, as the admission is to a place where the entertainment is held,
it would come within the definition under section 2(1). Further, the payment of
Rs. 5/- or Rs. 10/- though it is stated to be for the dinner, as it is
connected with an entertainment and as the person is making 789 the payment as
a condition for attending or continuing to attend the entertainment, it would
attract the definition of payment for admission under section 2(6) (iv) of the
Act. On the facts therefore we agree with the conclusion arrived at by the High
Court and confirm the convictions passed on the appellants and reject the appeal.
The High Court, in disposing of the appeal by the Government, though the
Government was not present, dealt with the law elaborately referring to various
English decisions. The learned Counsel for the appellants, Mr. Frank Anthony,
referred to some of the decisions and we would, before concluding our judgment,
refer to a few of them in brief.
It may be noted that English Law on the
subject has its origin from the Sunday Observance Acts, 1625 to 1780. The Act,
as a general rule, prohibited all public entertainments of all types on
Sundays. Act 1780 provided that "any house, room or other place which
shall be opened or used for public entertainment or amusement and to which
persons shall be admitted by the payment of money or by tickets sold for money
shall be deemed a disorderly house.", vide Halsbury Laws of England. In
Williams v. Wright a ticket for a Sunday concert at the Queen's Hall was
stamped "Admission Free.
Reserved Seat 1s." On the facts it was
held that a charge was made for a reserved seat and was not incompatible with
the admission being free and hence no offence was committed.
In a subsequent case, Kitchner v. Evening
Standard Co. Ltd., in connection with an all-in wrestling contest an
advertisement stated-"Prices 4s. 6d., 3s. 6d., 2s. 0d., reserved,
unreserved 1s. 0d.", it was held that an offence was committed as the
advertisement made it plain that no one can get in without payment. The Finance
(New Duties) Act, 1916, section 1(1) of the Finance (New Duties) Act, 1916,
reads as follows:- "There shall, as from the fifteenth day of May,
nineteen hundred and sixteen, be charged, levied and paid on all payments for
admission to any entertainment as defined by this Act an Excise duty (in this,
Act referred to as 'entertainments duty')..." This sub-section is similar
to section 3(1) of the United Provinces (Entertainment and Betting Tax) Act,
1937, with which we are concerned. The Acts with which we are concerned, have
taken into account the subsequent developments and widened the definition of 'admission
to an entertainment' and 'payment for admission so as to embrace payment for
any purpose whatsoever connected with an 790 entertainment and admission to a
place in which the entertainment is held. In Halsbury's Laws of England, 3rd
Edn. Vol. 37, page 11, para 19, it is stated that it would be a levy for
entertainment where refreshments are sold for a higher price than the normal
price even though no money is paid for admission and would be liable for tax. A
decision which was debated at length at the bar is that of a Court of Appeal in
J. Lyons & Co. Ltd. v. Fox. In that case, the concerts of music were given
during and after the service of tea and dinner. The dinner was permitted to
stay for one hour after the service of dinner had ceased. No charge was made in
any form except for the meals which were served both at a fixed price and
a-la-carte, and for which a bill was rendered to the customer before he left
the restaurant. By a majority it was held that payments made by the customers
to the restaurant were not payment for admission to entertainment within the
meaning of section 1(1) of the Finance (New Duties) Act, 1916, and that the
entertainment duty was therefore not chargeable in respect thereof. A minority
judgment took the view that the tea or dinner was purely incidental to the
concert, especially in view of the finding of the Magistrate that the persons
were paying not merely for the dinner but also for the entertainment which
followed the dinner. Reference was made to Attorney General v. London Casino
Ltd., under the Finance (New Duties) Act, 1916. In this case, food and drinks
were supplied, as in an ordinary restaurant, and patrons were able to dance on
the stage. In addition, an elaborate revue was performed at the stage. Patrons
were allotted tables as in an ordinary restaurant and there was a fixed menu
each night, but dishes could be ordered a-la-carte. A minimum charge of 15s.
6d.
was made, payment being made before leaving.
The Court distinguishing the case in J. Lyons & Co. Ltd. v. Fox (supra)
held that no doubt could be entertained that people paid 15s. 6d. because they
can have a good dinner in pleasant surroundings and that they paid it and to a
substantial extent paid it because they will, in addition to the dinner, be
able to see an extremely good and interesting and lively entertainment. The
Court holding, "whatever the result may be, I cannot bring myself to doubt
that the normal person paying 15s. 6d. pays not only for the dinner but also
for the right to dance to a band, and to a substantial extent also pays it
because he desires to see that is a good and elaborate and expensively produced
show." The facts of the case in the London Casino's case (supra) is
similar to the facts of our case. In the case before us, a minimum is fixed and
we have no doubt, a part of which is a payment for admis- 791 sion to the
entertainment. Other decisions referred to were Attorney General v. Mcleod,
Attorney General v. Swam, Attorney General Arts Theatre of London Ltd. and
Attorney General v. Southport Corporation. We feel it is unnecessary to burden
our judgment with the various decisions referred to in detail by the High Court
for they are not applicable as the Act with which we are dealing is wider in
its scope and application. In the circumstances we confirm the conviction and
sentence imposed by the High Court and its direction regarding levy of the tax
and dismiss the appeal.
S.R. Appeal dismissed.
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