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Judgment
K. Chandru, J.—All these seven writ petitions are filed by the owners of various Theme Parks or Amusement Parks run in the State of
Tamil Nadu. In these writ petitions, they have challenged the vires of the Tamil Nadu Entertainment Tax Amendment Act 32 of 1998 and for a
declaration that it is unconstitutional and ultra vires the Tamil Nadu Entertainment Tax Act, 1939 (for short, ''the Act'').
These writ petitions were admitted on various dates. However, the petitioners are not enjoying any interim order. In fact, this Court by a
reasoned order dated 10.4.2000, dismissed the application for injunction sought for by the petitioners. A detailed common counter affidavit, dated
31.8.1999 has been filed on behalf of the respondent State.
By the Amendment Act 32 of 1998, Section 3(2A) was introduced into the Act defining the term ''''amusement'''', which reads as follows:
Definitions. - In this Act, unless there is anything repugnant in the subject or context:
...
(2A) ''''amusement"" means any amusement, for which persons are required to make payment for admission to any amusement arcade or
amusement park or theme park or the like by whatever name called.
Section 3(4) defining the term ""entertainment"" has also undergone change by the Amendment Act, which reads as follows:
3(4). ''''Entertainment"" means a horse-race or cinematograph exhibition to which persons are admitted on payment; or television exhibition for
which persons are required to make payment by way of contribution, or subscription, or installation or connection charges or any other charges
collected in any manner whatsoever or an amusement or a recreation parlour where a game such as bowling, billiards, snooker or the like is
provided.
Section 4-F is the charging provision levying tax of 20% on each payment for admission to an amusement and it reads as follows:
4-F. Tax on amusement. - (1) Notwithstanding anything contained in Section 7, there shall be levied and paid to the State Government a tax
(hereinafter referred to as the entertainment tax), calculated at twenty per cent on each payment for admission to an amusement.
(2) The tax levied under Sub-section (1) shall be recoverable from the proprietor.
(3) The provisions of this Act (other than Sections 4 4-B, 4-D, 5, 5-A, 5-B, 5-C, 5-D, 5-E, 5-F, 5-G, 6(1) and 7) and the rules made thereunder
shall, so far as may be, apply in relation to the tax payable under Sub-section (1).
Pursuant to the amendment, demand notices were sent by various Commercial Tax Officers demanding payment of Entertainment Tax as per
law. The petitioners have raised the contention that since Entry 33 under List 2 of Schedule 7 of Constitution of India talks about sports,
entertainments and amusements, which were made subject to the provisions of Entry 60 of List I, where the word ""amusement"" was also found,
whereas, under Entry 62, the State is empowered to impose tax on luxuries including taxes on entertainments, amusements, etc. Hence, the words
''''entertainment and amusement"" should be made separate and distinct. The expressions ''''amusement or entertainment"" are intended to cover an
audience or a spectator related activity and not to include activities performed by a person for the enjoyment or amusing himself.
By relying upon certain English decisions, it was sought to argue that there is a distinction between ''''amusement"" and ''''entertainment"". When
the petitioners are providing only facilities and the persons are enjoying such facilities, the same thing cannot be subjected to an entertainment tax.
The legislative entry should not have any meaning from common parlance, but it should have a legislative definition. The definition ''''amusement
introduced by the Amending Act was an arbitrary definition.
In reply to these allegations, in paragraphs 10 and 11 of the counter affidavit, it is stated as follows:
As regards the contention raised in paragraph (G) of the affidavit, it is respectfully submitted that Section 2 of the Tamil Nadu Entertainment
Tax (amendment) Act, 1998 (Tamil Nadu Act 32 of 1998) defines amusement as any amusement for which persons are required to make
payment for admission to any amusement arcade or amusement park or the like by whatever name called. From a careful reading of the above
definition, it would be clear that the legislature has specifically by mentioning the words ''''any amusement"" thought fit only to impose tax on
amusement and not on any other activity which is remotely connected with amusement for which a person is charged for in such amusement arcade
or amusement park. Further, the intention of the legislature as a legislative policy is borne out by the fact that the Tamil Nadu Act 32 of 1998 seeks
to levy tax only on amusement provided by the class of persons who exclusively run and establish arcades, parks etc. for providing amusement by
collecting a payment for admission. Apart from the sources provided for amusement, if the petitioners carry on any other activity which do not fall
within the meaning of amusement, the same will not attract tax liability under the Entertainment Tax Act. The legislature has used the words
Amusement Arcade or Amusement Park or Theme Park or by whatever name called as they are referred and called in common parlance and as
such, there is no necessity to define the areas in particular unless there exists some ambiguity that is capable of giving room for misunderstanding of
the provision. The present section is sufficiently clear that is only the amusement-oriented activity that is subject to taxation.
It is further submitted that the legislature has been cautious while defining amusement in Section 2 of the Tamil Nadu Act 32 of 1998 by using
the adjective ''''amusement"" and ''''Theme"" preceding the words Arcade and Park. Similarly, the legislature is also conscious and deliberate in not
including any or every area or place where amusement is provided which would mean to include all the activities carried out by the citizens of the
State as mentioned in para (H) of the affidavit of the petitioner. In this regard, it would be relevant to state that the activities as narrated by the
petitioner such as use of clubs, Gymnasiums, swimming pools, Golf courses, etc. Visiting libraries, exhibitions, trade fairs, visiting parks, jungle
resorts for animal rides, zoos or indoor games facilities on payment of admission charges cannot be understood or recognised as activities solely
providing amusement and people undertake such activities or visit such places for varied reasons. The nature of activities referred above enable
learning of a game or sport, provide for a past-time inculcate social habits, maintenance of good health and well being and such other benefit
enuring therefrom. However, these activities apart from being helpful in achieving the abovesaid purposes incidentally do provide some amusement
but qualitatively they are different from the kind of amusement provided by the petitioners. When the legislature has defined it with a definite intent,
the allegation of the petitioner that if a wider arbitrary definition to amusement is to be accepted all the aforesaid activities are liable to be charged
with entertainment tax is total misapprehension of the impugned enactment.
In the light of the stand taken by the respective parties, it has to be seen whether the Amendment Act suffers from any constitutional vice. In so
far as the power of the State to subject persons to entertainment tax is concerned, Entry 62 of List 2 is relevant and it reads as follows:
Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
Even a plain meaning will make it clear that the petitioners'' activities will be covered within the definition of the word ''''amusement"". The
Concise Oxford English Dictionary defines the terms ''''amusement"", ''''amusement arcade"" and ''''amusement park"" as follows:
Amusement : The state or experience of finding something funny; the provision or enjoyment of entertainment; a game machine or other mechanical
device for providing entertainment.
Amusement Arcade : An indoor area containing coin-operated game machines.
Amusement Park : A large outdoor area with fairground rides and other entertainments.
(see: 11th Indian Edition 2007. O.U.P)
Therefore, it is too late for the petitioners to challenge the levy of entertainment tax on the admission fee charged by the petitioners.
Once there is a legislative entry provided under Article 246 of the Constitution, it is open to the State to levy tax with reference to the entry.
The Supreme Court, in its judgment in Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India reported in , dealing with the power of the
State to levy taxes, observed as follows:
Taxation is the legal capacity of sovereignty or one of its governmental agents to exact or impose a charge upon persons or their property for the
support of the Government and for the payment for any other public purposes which it may constitutionally carry out.
It is not open to the petitioners to contend that they are only providing facilities and it cannot be an amusement coming under Entry 62, List-II
of Schedule VII. In fact, more or less a similar contention, which had been raised in respect of entertainment tax regarding cinemas, was repelled
by the Supreme Court in Y.V. Srinivasamurthy and Ors. v. The State of Mysore and Anr. reported in AIR 1959 SC 894. Para 3 of the said
judgment may be usefully extracted below:
It is only necessary here to refer to an additional argument that was advanced by learned Counsel for the appellants before us in support of his
contention. He drew our attention to Entry 33 of List II of the Seventh Schedule to the Constitution which runs as follows: ''Theatres and dramatic
performances; cinemas subject to the provisions of Entry 60 of List I; sports, entertainments and amusements.'' He contends that that entry covers
laws made with respect to each of the items as a separate subject, but points out that Entry 62, which has been quoted above, permits imposition
of tax only on luxuries including taxes on entertainments, amusements, betting and gambling. Learned Counsel concludes that law made with
respect to Entry 62 cannot permit imposition of taxes on cinemas, for the word ''cinemas'' mentioned in Entry 33 has been omitted from Entry 62.
We do not thick there is any substance in this argument. Learned Counsel agrees that the words ''entertainments'' and ''amusements'' are wide
enough to include theatres, dramatic performances, cinemas, sports and the like. If his argument is correct, then, on a parity of reasoning, the State
Legislature will have no competence to enact a law imposing a tax on theatres or dramatic performances or sports, for none of those words are
mentioned in Entry 62. This is sufficient to repel this argument. The truth of the matter is that ''cinema'' had to be specifically mentioned in Entry 33
of List II in order to avoid any possible conflict between it and Entry 60 in List I.
While defining the term ""entertainment"", a Division Bench of Madhya Pradesh High Court in Calico Mills Ltd. Vs. State of Madhya Pradesh
and Others, has dealt with the issue in some detail. The passage found in para 6 may be usefully extracted below:
The natural import of the term ''entertainment'' is amusement and gratification of some sort. The term connotes something in the nature of an
organised entertainment. This is evident from the fact that the Act was enacted to provide for the levy of a duty in respect of admission to theatres,
cinemas and other places of public entertainment. Therefore, an entertainment to come within the definition of Section 2(b) and of the provisions of
the Act must be some exhibition, performance, amusement, game or sport for the purpose of entertainment, that is, for affording some sort of
amusement and gratification to those who see or hear it.
In the light of the same, the challenge to the constitutional validity must necessarily fail and accordingly all the writ petitions will stand dismissed.
There will be no order as to costs.