H T GURSAHANEY Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Vedio game machines have been installed by the petitioners in their parlours run in different names such as Dizzyland Wonderland etc. Admission to these parlours is unrestricted and free of cost. In other words no fee is charged by the proprietors of the parlours for admission to the parlour. Vedio game machines have been installed in these parlours and any person who desires to play the electronic game can use the machine by dropping two fifty-paise coins in its slot. It is not as if any performance appears on the screen of the machine as soon as the Coins are dropped in the slot of she machine. A player who desires to use the machine must activate it by either pressing the push buttons or the lever provided for the same. Once the machine is activated the human mind is pitted against the computer-mind and the battle of wits ensues. If the player is able to manipulate the lever or the push-buttons by sharp reflexes so as to beat the computer-mind the human mind scores a point over the computer-mind and the player enjoys the thrill of having succeeded in scoring a point. That entitles the player to a second round till he loses to the computer mind in the combat. In other words it depends on the intelligence and sharp reflexes of the player who operates the machine to score a point over the computer mind. The petitioners contend that the amount dropped in the slot is by way of hire charges for using the machine. No payment is changed from the player or the onlookers for entry to the parlour.

(2.) The petitioners who are the proprietors of such parlours were served with show cause notices directing them to submit accounts for payment of entertainment tax on the income received from the coins dropped in the slots of the vedio machines in exercise of power conferred by sec. 3 of the Gujarat Entertainments Tax Act 1977 (hereinafter referred to as the Act). On receipt of these notices the petitioners showed cause pointing put that income from vedio machines installed in their parlours could not attract the provisions of sec. 3 of the Act because no payment was charged for admission to the parlours or from the bystanders in the parlours while the machine was in use by one of the players who had dropped coins in the slot. The Mamlatdar (Entertainment Tax) Ahmedabad however came to the conclusion that the loan or use of any instrument or contrivance referred to in sec. 2(g) (iv) fell within the meaning of the expression payment for admission and therefore the proprietors of the parlours were liable to pay entertainment lax under sec 3 of the Act. The Mamlatdar therefore called upon the proprietors of the parlours that is the petitioners of this group of petitions to pay entertainment tax on the amounts collected from the machines during the relevant period. The petitioners feeling aggrieved by this order preferred the present writ petitions under Art. 226 of the Constellation of India.

(3.) On behalf of the respondent Shri M. N. Buch Competent Officer -cum-resident Deputy Collector has filed his affidavit-in-reply wherein he has pointed out that by reference to the definitions contained in secs. 2 2 and 2(g) (v) of the Act that vedio games would fall within the meaning of a game or sport and since a price is recovered for operating the vedio machines which provide entertainment to players the proprietors of the parlours are liable to tax under sec. 3 of the Act. According to him the expression admission to an entertainment would not necessarily imply admission to a physical place/ surrounding to which a person enters but would include admission to entertainment meaning thereby admission to the parlour for the purpose of playing the vedio game installed in the said parlour on payment of a price to be paid by inserting coins in the slot of the machine. It is pertinent to note that in the affidavit-in-reply reliance is not placed on clause (iv) of sec. 2 (g) of the Act to which a reference is made by the Mamlatdar in his impugned order. Broadly speaking the question which therefore arises for our consideration is whether coins inserted in the slot of the vedio machines to enable the player to play the game tantamounts to payment for admission to entertainment ?