Delhi High Court
Amarrass Society For Performing ... vs Commissioner Of Excise, ... on 15 December, 2017
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 7532/2017
Date of decision: 15th December, 2017
AMARRASS SOCIETY FOR PERFORMING ARTS ..... Petitioner
Through Mr. Rajshekhar Rao with Mr. Zehra
Khan and Mr. Zahid Ahmed, Advocates.
Versus
COMMISSIONER OF EXCISE, ENTERTAINMENT AND
LUXURY TAX & ANR. ..... Respondent
Through Mr. Ramesh Singh, Standing Cousnel
with Mr. Sandeep Pather, Advocate.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MS. JUSTICE PRATHIBA M. SINGH
SANJIV KHANNA, (J.) (ORAL)
Amarrass Society for Performing Arts, a society, has filed the present
writ petition impugning the Assessment Order No. F 6(15) ETO 12-13/5557
dated 31st January, 2013 passed by the Entertainment Tax Officer, the
assessing authority under the Delhi Entertainment and Betting Tax Act,
1996, and the appellate orders dated 11th June, 2013 passed by the Deputy
Commissioner and 11th July, 2017 passed by the Financial Commissioner.
2. Order dated 31st January, 2013 had directed the petitioner society and
Zobra Entertainment Private Limited to pay an amount of Rs.10,26,519/- as
entertainment tax including interest and penalty, failing which action would
be taken against both of them for recovery of the amount. The first appellate
order dated 11th June, 2013 passed by the Deputy Commissioner affirms the
said order and had directed that the petitioner society would be blacklisted
for furnishing false information to the department by applying for „No
Objection Certificate‟ and no permission would be granted in their favour in
future till the dues were paid. The order of the second appellate authority,
the Financial Commissioner dated 11th July, 2017 affirms the finding of the
Entertainment Tax Officer and the first appellate authority.
3. During the course of hearing, the petitioner had raised a number of
contentions. However, in the end the petitioner had confined their
submission limited to sponsorship addition of Rs.10,00,000/- on which 15%
entertainment tax amounting to Rs.1,15,000/- , it was held, was payable.
4. The petitioner vide application dated 9th October, 2012 had applied
for exemption from payment of entertainment tax for a folk musical festival,
namely, Amarrass Desert Music Festival to be held on 1st and 2nd
December, 2012 at Zorba, 166, MG Road, New Delhi. It was stated in the
application that folk musicians from different countries including India
would participate. Entry would be by invite only and total expected
gathering would be 600 persons per day. The sole purpose of organizing the
festival was to revive the heritage of music in the country and rest of the
world. The petitioner was hoping to get sponsorship for the event, though at
that point of time they did not have any sponsorship.
5. By communication/order dated 30th October, 2012, the petitioner was
granted „No Objection Certificate‟ for exemption from payment of
entertainment tax under the Act, subject to several conditions. The
petitioner was required to comply with directions laid down in notification
dated 16th October, 2006, file detailed account of the performance including
proceeds of the gate money, copy of the audit report for last financial year
from a qualified Charted Accountant within fifteen days of the event, all
incomes from the performance including the gate money would be credited
to the petitioner society and there would be ceiling of Rs.500 on admission
fee. There was another stipulation that income received by way of
sponsorship/donation should not exceed Rs.50,00,000.
6. On 2nd December, 2012, Excise Intelligence Bureau had raided the
premises at 166, MG Road, Ghitorni, New Delhi and had detected misuse of
P-10 Excise permit and violations of the terms of grant of No Objection
Certificate. It was observed that the musical event was in progress and
Rs.1500/- was being charged for entry. Rs.200 for each liquor voucher was
being charged separately. About 200-250 people were present in the
premises at the time of raid.
7. FIR No 386/2012 dated 3rd December, 2012 was registered at Police
Station Vasant Kunj under Section 33 of the Excise Act.
8. Consequent thereto, the Entertainment Tax Officer had issued notice
dated 11th December, 2012, calling upon the petitioner to furnish documents
including books of accounts, details of income and expenditure, bank
account etc. and why „No Objection Certificate‟ dated 30th October, 2012,
should not be withdrawn for furnishing false information and assessment
under Section 15 of the Act should not be made.
9. The petitioner vide reply dated 18th December, 2012 had furnished
income and expense report, details of income, copy of some donation
receipts and bank statements.
10. Thereafter, vide another reply dated 19th December, 2012, petitioner
society had stated that the food and beverages were not arranged for by them
and they did not have any commercial profit sharing in the same. This letter
acknowledges that people had given donations at the entry gate and receipts
for the same were submitted. It was also acknowledged that the petitioner
society had made efforts and collected temporary membership/donations for
the said musical festival.
11. Order dated 31st January, 2013 holds that there were about 250
persons present in the said event. Relying upon the agreement furnished by
the petitioner, it was held that Rs.1500/-, Rs.2500/- 5,000/- and 6,000/- were
charged for tickets for entry to the event. On the basis of the agreement the
Entertainment Tax Officer in absence of details, bifurcated the entry ticket
amounts amongst 250 persons who were present and held that Entertainment
Tax of Rs.1,07,700/- was chargeable on the said tickets. On the basis of
documents submitted by the petitioner, he came to the conclusion that
Rs.5,36,847/- was received as donation. As noted above, the petitioner has
given up challenge to the aforesaid amounts.
12. The Entertainment Tax Officer thereafter held that the petitioner must
have received sponsorship of Rs.10,00,000/-. Sub paragraph 3 of the said
order dealing with the aspect reads as under:
"3. Entertainment Tax on sponsorship are calculated
as under:-
The applicant failed to submit details of sponsorship.
However, there is one clause in the said agreements
regarding sponsorship, therefore, the undersigned takes the
value of sponsorship as RS. 10,00,000/- on which 15%
Entertainment Tax is charged which comes to Rs.
1,50,000/-.
Further interest is also levied as per section 40 of the Act
which comes to Rs. 11,838/- (Rs. Eleven thousand eight
hundred and thirty eight only). In addition to above a
penalty equivalent to two times of due tax which comes to
Rs. 6,76,454/- (Rs. Six lacs seventy six thousand four
hundred and fifty four) is also imposed upon the assesse,
as per section 15 of the Act.
Since M/s Amarrass Society For Performing Arts and
Zobra Entertainment Pvt. Ltd were co-proprietor of the
said event, therefore, both Amarrass Society For
Performing Arts and Zobra Entertainment Pvt. Ltd. shall
be held liable to pay the aforesaid tax including interest
and penalty jointly.
Now therefore Amarrass Society For Performing Arts and
Zobra Entertainment Pvt. Ltd. are directed to pay a total
amount of Rs. 10,26,519F/- (Rs. Ten lacs twenty six
thousand five hundred and nineteen only) as
Entertainment Tax including interest and penalty for the
aforesaid event within 15 days from the date of receipt of
this order failing which action shall be initiated as per
law for recovery of the Government revenue."
13. Other than aforesaid quotation, there is no other discussion in the
order dated 31st January, 2013 relating to the sponsorship money. No
document or any other material, to show that any sponsorship money was
received, has been adverted to and relied.
14. We have also examined the appellate orders and find that there is no
discussion on the aforesaid aspect and evidence in support of the said
finding.
15. Counsel for the petitioner has rightly urged that the petitioner had
never accepted or admitted having received any sponsorship money. The
petitioner had given full details of the donations received and furnished a
copy of their bank accounts. It is not the case that figure of Rs.10,00,000/-
was reflected in the books of account or bank statement. There is no
evidence to show that the event was sponsored by any organization or
corporate house. No details of sponsorship stand noticed or adverted to in
the assessment order and the appellate orders. The FIR and the report of the
raiding team does not refer to sponsorship or any evidence. As noticed
above, the petitioner had admitted that they had received donations of
Rs.5,36,847/-.
16. Thus, the orders passed by the Entertainment Tax Officer or the
appellate authorities proceed on surmises and conjecture that sponsorship
money of Rs.10,00,000/- must have been received. In the absence of any
such evidence or material, we do not think that the Entertainment Tax
Officer could have made any assumption and arrived at a finding. The said
finding of the Entertainment Tax Officer, we accordingly hold, is without
evidence and contrary to law. It would merit interference in the exercise of
writ jurisdiction and power of judicial review. Accordingly, we partly
modify the assessment order and the appellate orders to the extent that the
petitioner had been asked to pay entertainment tax, penalty and interest on
sponsorship fee of Rs.10,00,000/-. The respondents would accordingly re-
compute of entertainment tax, penalty and interest. We clarify that we have
not interfered with the quantum/percentage of penalty which has been
imposed.
16. The petitioners/society has deposited an amount of Rs.3,00,000/- with
the respondents. The said amount would be adjusted. The balance amount
due and payable in terms of this order would be communicated to the
petitioner society within three weeks from the date copy of this order is
received.
17. As we have modified the order passed by the Entertainment Tax
Officer/Assessing Officer, interest would be chargeable @ 18% i.e. 1.5%
per month and not 2% per month till the date of this order, and in case of
default, interest would increase to 2% per month.
18. The writ petition is accordingly partly allowed without any order as to
costs.
SANJIV KHANNA, J.
PRATHIBA M. SINGH, J.
DECEMBER 15, 2017
MR/NA/ssn
