FASHION DESIGN COUNCIL OF INDIA Vs. GNCT

JUDGEMENT

(1.) THESE are nine connected writ petitions filed by Fashion Design Council of India (hereinafter referred to as "petitioner") under Art. 226 and 227 of the Constitution of India. The matter pertains to the Delhi Entertainment and Betting Tax Act, 1996 (Delhi Act No. 8 of 1997) (hereinafter referred to as 'Act'). Writ Petition No. 1145/2010 is taken as a lead matter since the facts in all these writ petitions are somewhat common. The petitioner is a society registered under the Societies Registration Act, 1860, established solely for the purpose of promoting and fostering the growth and development of the Indian Fashion industry. It organizes the India Fashion week, business -to -business interaction events and other Fashion shows. It is claimed that these are not ticketed events and that entry to the Fashion shows/ Fashion weeks is exclusively by invitation, both for domestic and international buyers, associated professionals and media. It was granted 100% exemption from the liability to pay entertainment tax under the Act in respect of the events held from the year 2002 to the year 2004; the exemption was reduced to 50% in respect of the events held in the years 2008 and 2009. Thereafter the Government of NCT, Delhi refused the grant of exemption from entertainment tax for all subsequent Fashion events conducted or organized by the petitioner.

(2.) THE petitioner applied for exemption from payment of entertainment tax under Section 14 of the Act regarding Fashion weeks organized by it for the periods from 18.03.2009 to 23.03.2009 and from 15.10.2008 to 19.10.2008 in Delhi. Under Section 14 of the Act the exemption is to be granted by the government having regard to the criteria mentioned in the various sub -sections of the Section. By order dated 10.09.2009, which is impugned in the writ petition, the Joint Secretary (Finance), acting for the Government of NCT of Delhi, rejected the request of the petitioner for 100% exemption from entertainment tax on Fashion shows. However, considering the recession in the industrial and export sector and to project Delhi as a world class city, exemption was granted from payment of entertainment tax to the extent of 50% of the tax payable by the petitioner, "as a special case". This exemption was granted in respect of the Fashion shows which were held between 15.10.2008 and 19.10.2008 and between 18.03.2009 and 23.03.2009 and also in respect of the Van Heusen India Men's Fashion Week to be held from 11th to 13th September, 2009. It was clarified that the exemption was not being extended to future events planned by the petitioner. Before the aforesaid order granting 50% exemption from entertainment tax was passed, the Additional Entertainment Tax Officer (AETO) had passed two assessment orders on 11.06.2009, one in respect of the Fashion show organized between 15.10.2008 and 19.10.2008 and another in respect of the Fashion show organized between 18.03.2009 and 23.03.2009. It would appear that before these assessment orders were passed the assessee had approached this Court through writ petitions for issue of "no objection certificates" for holding the events subject to deposit of monies. The AETO referred to orders passed by this Court in those writ petitions and thereafter proceeded to examine the details furnished by the petitioner in order to ascertain whether there was any liability to pay entertainment tax under the Act. A perusal of the assessment orders shows that the principal contentions raised by the petitioners before the AETO were these. The first contention was that the Fashion show was not an "entertainment" under the Act. This contention was rejected by the AETO who held that it is an exhibition of designs and clothing and would also amount to a performance by the models on the ramp and thus the Fashion show amounts to an "entertainment". The other contention raised by the petitioner was that the sponsorship amount received in respect of the Wills Lifestyle India Fashion Week was not "payment for admission to the entertainment" and therefore not chargeable to entertainment tax. This contention was also rejected by the AETO, relying upon the inclusive definition of the term "payment for admission" in Section 2 (m) of the Act. According to him under Section 2 (m) (i), any payment made by a person for seats or other accommodation in any form in a place of entertainment was chargeable to entertainment tax. He also referred to definition of the term "admission to entertainment " in Section 2 (a) of the Act. According to him Section 2 (m) (i) read with Section 2 (a) of the Act covered the case of the petitioner and therefore it was liable to pay entertainment tax in respect of the Fashion show. The AETO also referred to and relied upon sub -sections (1) and (6) of Section 6 of the Act. Sub -section (1) of Section 6 is the charging Section, which charges tax on an entertainment. Sub -section (6) says that where the payment for admission to an entertainment is made wholly or partly by means of a lump sum paid as subscription, contribution, donation or otherwise, the entertainment tax shall be paid on the amount of the lump sum and on the amount of payment made for admission, if any, made otherwise. These two sub -sections were also relied upon by the AETO to assess the sponsorship amount received by the petitioner to entertainment tax. Ultimately, he brought the following sponsorship amounts to tax under the Act, observing as under: - <FRM>JUDGEMENT_5407_ILRDLH22_2012.html</FRM>

(3.) SIMILAR order was passed on the same day (i.e. 11.06.2009) in respect of the Fashion show held between 18.03.2009 and 23.03.2009. The sponsorship money of Rs.5,79,76,138/ - received by the petitioner was taxed @ 15% which came to Rs.86,96,421/ -. The amount assessed as entertainment tax by the aforesaid orders, both passed on 11.06.2009, were directed to be paid by the petitioner within 15 days from the date of receipt of the orders.