RAMESH SIPPY Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) As all these writ petitions involve common questions of law and fact they were heard together and are being disposed of by this common judgment.

(2.) The petitioners are proprietors of video game parlours at Bombay and Sangli. The said parlours have number of mechanical, electro mechanical and electronic games. It is the case of petitioners that video games were introduced for the first time in the year 1980. At that time the said games were a great novelty and attracted considerable public interest, as a consequence of which the taking from operation of the said machines were quite higher. However, thereafter public interest in the said games has declined sharply, with a corresponding marked decline in the profits. It is then contended by them that the actual taking in the case of a particular shop and for a particular machine would vary greatly, depending upon the number of factors such as, the area or locality in which the games parlour is located, whether the machine in question is a new one or an absolute one, whether the machine is in perfect operational order on all working days or not and also whether the supply of electric power is regularly available on all working days. A shop in a busy locality would have taking on higher level than a shop located in a small mofussil town. The working of the machine also depends upon the repair facilities and availability of necessary spare parts etc. Some machines, such as, foot ball machines which are purely mechanical, can be operated on a coin of only 25 paise. On the other hand flipper pin ball machines which are be question is a electro-mechanical can be operated on a coin of 50 paise. Similarly wall machine which are also electro-mechanical machines can be operated on a coin of 50 paise. As against these, electronic flipper pin ball machines and electronic wall machines can be operated on a payment of Rs. 1/- at a time. There are some expensive and elaborate video game which can be operated on a payment of only Rs. 2/- at a time. Therefore the amount of revenue yielded would be wholly dependent upon the type of machine and the amount of money which is required to play it each time. Therefore the petitioners have given gross collections from the machines. It is also contended by them that the said games are games of skill.

(3.) On the basis of the above averments the petitioners have challenged the provisions of the Bombay Entertainment Duty Act, 1923 as amended by Act No. 7 of 1987. According to the petitioners an entertainment duty or a tax could be levied on an act of entertainment only. If a tax is not levied on an act of entertainment but on carrying on a business or calling of entertainment, it will fall under Entry No. 60 of List II of VII Schedule to the Constitution and therefore, will be hit by Article 276 of the Constitution of India. If it is a tax levied on the equipment of the entertainment, then it will be ultra vires being beyond the Legislative competence. It is not covered by Entry No. 62 of List II of the Seventh Schedule. According to the petitioners by Bombay Entertainment Duty Act, 1923, as amended by Act No. 7 of 1987, a duty or a tax is being imposed on the machine itself which is an equipment of entertainment and not on the act of entertainment. The tax levied is also hypothetical and notional, since it has no nexus with the act of entertainment as such. In support of these contentions Shri Chinoy and Shri Kapadia learned Counsel appearing for the petitioners, have placed strong reliance upon the decision of the Supreme Court in A.I.R. 1959 S.C. 582 (Western India Theatres Ltd. v. Cantonment Board Poona, Cantonment) A.I.R. 1980 Bom. 358 (Rajab Mahal Co-op. Housing Society v. State of Maharashtra and others) and a decision of the Division Bench of this Court in Writ Petition Nos. 38 and 240 of 1984 (Ramesh Waman Toke v. State of Maharashtra and others) decided on 28th February, 1984 by Chandurkar, C.J., and Jahagirdar, J. It is also contended by the learned Counsel that provisions are also discriminatory since unequals are treated equally, meaning thereby that the machines which yield different revenues because of its make or location, are treated equally in the matters of taxation and on that count also the duty levied is violative of Article 14 of the Constitution.