Dish Tv India Limited vs The State Of Karnataka
2021 Latest Caselaw 5904 Kant

                             1



    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 10TH DAY OF DECEMBER, 2021

                          PRESENT

           THE HON'BLE MRS. JUSTICE S.SUJATHA

                            AND

       THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY

                   S.T.R.P.No.436/2017

BETWEEN:

Dish TV India Limited
(Formerly known as M/s. ASC Enterprises Ltd.)
39, United Mansion, M.G.Road,
Bengaluru-560001.
Through its Authorized Representative
And Sr. Manger,
Mr. Jayath Kumar Sharma.          ... PETITIONER

(By Sri Vivek Sarin, Adv. &
    Sri S.M.Anees Ahamed, Adv.)

AND:

The State of Karnataka,
Represented by
The Secretary to the Government,
Finance Department,
Vidhana Soudha,
Bangalore-560001                 ... RESPONDENT

(By Sri Jeevan J.Neeralagi, AGA)


       This STRP is filed under Section 8F of the Karnataka
Entertainment Tax Act, 1958, against the judgment dated
                                  2



10.03.2016 passed in STA.Nos.1916 to 1954/2014 on the file
of the Karnataka Appellate Tribunal at Bengaluru, dismissing
the appeals and upholding the order dated 08.07.2014
passed in No.KET-AP:20 to 58/09-10 on the file of the Joint
Commissioner       of    Commercial         Taxes,          (Appeals)-3,
Shanthinagar, Bengaluru-560027, dismissing the appeals filed
against    order        dated        30.01.2010         passed        in
No.JCCT.ENF.SZ.DCCT-1/0-10           on   the   file   of    the   Addl.
Commissioner of Commercial Taxes (Enforcement) South
Zone, 80 Ft. Road, Rajendra Nagar, Koramangala, Bangalore,
dropping the proposed levy of penalty under Sec.6-B(2) of
Karnataka Entertainment Tax Act, 1958 for the period from
April 2006 to March 2008 to April 2009.


     This petition coming on for Orders, this day, Vishwajith
Shetty J., made the following:


                            ORDER

1. This revision petition under Section 8F of the Karnataka

Entertainment Tax Act, 1958 (for short, 'the Act') is filed

challenging the common order dated 10.03.2016 passed by

the Karnataka Appellate Tribunal (Appeals) (for short, 'the

Tribunal') in STA Nos.1916 to 1954 of 2014 (Annexure-A),

wherein the order dated 08.07.2014 passed by the Joint

Commissioner of Commercial Taxes (Appeals)-3 in Appeal

No.KET-AP:20 to 58 of 2009-10 (Annexure-B) and the

assessment and re-assessment orders passed by the Deputy

Commissioner of Commercial Taxes, Bengaluru, in

No.JCCT.ENF.SZ.DCCT-1/2009-10 under Sections 6-A(3) & 6-

B(1) of the Act, for the period commencing from April 2006 to

June 2009 (Annexures-C1 to C39), has been confirmed.

2. Though the matter is posted for admission, with the

consent of the learned Counsel for both the parties, the

matter is heard for final disposal.

3. Brief facts of the case that would be relevant for the

purpose of disposal of this revision petition are, the petitioner

is a Direct to Home (DTH) service provider and is granted

DTH license by the Ministry of Information and Broadcasting

(Government of India) under Section 4 of the Indian

Telegraph Act, 1885, for providing DTH services. The DTH is a

distribution platform for multi-channel TV programme on KU

Band by using a satellite system that transmits the

programme/provide TV signals directly to the subscribers

premises. The subscriber inturn can have access to all thee

multiple channels directly at home using a small antenna and

set top box. The DTH service is categorized as broadcasting

services under the Finance Act, 1994, and the licensee is

liable to pay applicable service tax on the value of such

services charged from the subscribers.

4. The business premises of the petitioner was inspected

by the competent officer and after issuing show cause notice,

the petitioner was given opportunity to produce necessary

records and since the petitioner had failed to produce the

relevant documents regarding collection of service tax/

entertainment tax, assessment and re-assessment orders

were passed against the petitioner for the period commencing

from April 2006 to June 2009 by 39 separate orders and

being aggrieved by the same, the petitioner had filed appeal

before the Joint Commissioner of Commercial Taxes under

Section 8-B(5) of the Act. The said appeal was dismissed on

08.07.2014 and the assessment and re-assessment orders

passed against the petitioner was confirmed. Being aggrieved

by the same, the petitioner had filed 39 separate appeals

before the Tribunal under Section 8-E(1) of the Act, and by

order dated 10.03.2016, the said appeals were dismissed

confirming the orders passed by the First Appellate Authority.

It is under these circumstances, the petitioner is before this

Court in this revision petition challenging the common order

dated 10.03.2016 passed by the Tribunal in STA.Nos.1916 to

1954/2014.

5. Learned Counsel for the petitioner submits that the

petitioner has produced all the necessary documents before

the assessing authority to show that separate entertainment

tax was not being collected and inspite of the same, the

assessing authority has passed assessment and re-

assessment orders against the petitioner and raised demand.

He submits that entertainment tax cannot be levied once

service tax is collected from the petitioner. He submits that

service tax is a value added tax which is a consumption tax

borne by the customer, and therefore, the assessing authority

is not justified in levying entertainment tax on the petitioner,

who is only liable to pay service tax as provided under

Section 4-G of the Act. He has placed reliance on the

judgment of the Hon'ble Supreme Court in the case of ALL

INDIA FEDERATION OF TAX PRACTITIONERS & OTHERS VS UNION

OF INDIA & OTHERS - (2007)7 SCC 527, and contended that

service tax is the mandatory levy by the Central Government,

and there is no specific provision to levy entertainment tax on

service component under Section 4-G of the Act. The learned

Counsel has placed sample account statement of subscribers

to demonstrate that service tax was collected separately from

them.

6. Per contra, learned Counsel appearing for the

respondent submits that the petitioner has failed to produce

the invoices raised by him against the subscribers to show

that he has not been collecting separate service tax. No

material was produced by the petitioner before the assessing

authority or before the appellate authorities in this regard and

petitioner has only produced the statement of accounts which

are totally irrelevant. In view of the failure of the petitioner to

produce the relevant documents, the authorities below were

constrained to pass the impugned orders which does not call

for any interference, and accordingly prayed to dismiss the

revision petition.

7. We have carefully considered the arguments addressed

by the learned Counsel on both sides and also the material

available on record.

8. The questions of law raised by the petitioner-assessee

in this revision petition reads as under:

a) Whether entertainment tax under the provisions of 4-C of KET Act, 1958, is leviable on the consideration towards the services excluding the service tax component or on both?

b) Whether entertainment tax can be levied on the transaction of service which is so characterized under the Finance Act, 1994?

c) Whether the State of Karnataka has legislative competence to levy tax under KET Act, 1958 on the transaction which is exclusively reserve for Union Parliament for the purposes of service tax under Entry 92C of the List I of Schedule VII of the Constitution of India?

d) Whether States are prohibited under constitutional discipline of Article 246 to adopt the sources of revenue which are exclusive received for the Union Parliament?

e) Whether in the absence of Rules for determination of the component of Entertainment and that of services, the composite and indivisible contract can be disintegrated for the purpose of levy under KET Act, 1958?

f) Whether the case of the petitioner is covered by the judgment in the case of Anand Swarup Mahesh Kumar Vs Commissioner of Sales Tax [(1980)4 SCC 451]?

g) Whether the Ld. Tribunal was justified to proceed with the appeals while the question of legislative competence of State of Karnataka are pending consideration before this Hon'ble Court?

9. The Tribunal referring to various provisions of the

Finance Act, 1994, as well as the Service Tax Rules, 1994,

has observed that it is not possible or permissible to

segregate the service tax component for the purpose of levy

of entertainment tax in the case of the appellant as the

service tax component is not indicated separately in the bills

or invoices issued to the customers. No proof is available on

records to show that service tax has been separately

collected. It was further observed that the charging Section

4-G of the Act uses the expression 'on the amounts received

or receivable' is liable for entertainment tax at 6%, and

therefore, the assessing authority is correct in levying

entertainment tax on service tax component, and the

appellate authority is correct in confirming the same.

10. Learned Counsel for the petitioner has submitted that if

an opportunity is given, he would produce all the relevant

invoices raised against the subscribers to show that service

tax was separately collected in addition to the entertainment

tax.

11. The Hon'ble Supreme Court in All India Federation of

Tax Practitioners' case (supra), has held that service tax is

levied on the service and not on the service provider. It has

been held in the said case that service tax is a value added

tax which in turn is both a general tax as well as destination

based consumption tax, in the sense, it is levied on

commercial activities and is not a charge on the business, but

on the consumer and it would, logically, be levied only on the

service provided.

12. Learned Counsel has also brought to the notice of this

Court that the Notification bearing No.F.No.B.11/1/2002-TRU

dated 01.08.2002 and the Circular bearing No.192/02/2016-

Service Tax dated 13.04.2016 issued by the Government of

India have also not been properly considered by the

assessing authority or by the appellate authorities.

13. Under the circumstances, we are of the considered view

that it would meet the ends of justice if the order passed by

the Tribunal is set aside and the matter is remitted to the

Tribunal to consider the appeals afresh after giving an

opportunity to the petitioner to produce all the relevant

documents in support of his case including the invoices raised

by it as against the subscribers, and thereafter, the appeals

shall be heard and disposed of in the light of the

notification/circular dated 01.08.2002 and 13.04.2016 relied

upon by the petitioner sans answering the questions of law

raised. Accordingly, we proceed to pass the following:

ORDER

i) The petition is allowed in part;

ii) The common order dated 10.03.2016 passed in STA Nos.1916 to 1954 of 2014 passed by the Karnataka Appellate Tribunal, Bengaluru, is set aside;

iii) The matter is remanded back to the Tribunal for re-consideration;

iv) The Tribunal shall re-consider the matter in the light of the observations made hereinabove and appropriate orders shall be passed in an expedite manner;

v) All the rights and contentions of the parties are left open;

vi) Since both the parties are represented by their learned Counsel, the parties/learned counsel are directed to appear before the Tribunal on 18.01.2022 without waiting for any notice.

Sd/-

JUDGE

Sd/-

JUDGE

KK