Case Note & Summary
This petition under Article 226 of the Constitution of India challenges the order dated 28th September 2007, confirming an entertainment duty demand of Rs. 71,87,500/- and reducing the penalty from Rs. 1,43,75,000/- to Rs. 71,87,500/-. The petitioner, a company promoting Indian cinema and television, organized the ‘APSARA’ award function in January 2006. Reliance Communications and other sponsors funded the event without selling tickets. The authorities levied entertainment duty and penalties, which the petitioner contested. The Court upheld the entertainment duty but deleted the penalty, concluding that the issue was debatable and the petitioner did not intend to evade the duty.
Introduction
Petition under Article 226 challenging the order dated 28th September 2007. Appellate Authority confirmed the entertainment duty and reduced the penalty.Brief Facts
Petitioner: A company promoting Indian cinema and television. Event: ‘APSARA’ award function organized on 21st January 2006. Sponsorship: Reliance Communications and other sponsors contributed Rs. 4.90 crores.Details of the Event
No tickets sold, guild members invited. Flying squad observed sponsorship advertisements and performances.Initial Orders and Appeals
7th March 2006: Additional Collector ordered payment of entertainment duty and fine. 17th April 2007: Appellate Authority confirmed the duty and reduced the fine. Writ Petition No.1347 of 2007 led to remand for a speaking order.Impugned Order
28th September 2007: Confirmed duty and reduced the penalty.Submissions of Petitioner
Claimed the award function did not qualify as “entertainment” under the Maharashtra Entertainments Duty Act. Contended the definition of “Award Function” was introduced only in 2010. Argued against the inclusion of sponsorship amounts as “payment for admission.” Claimed no machinery provision for intermittent performances.Submissions of Respondents
Argued the award function fell within the definition of “entertainment.” Supported the original and appellate orders.Analysis & Conclusions
Definitions Considered: Entertainment, Award Function, Payment for Admission, Sponsorship Amount. Entertainment Definition: Includes performances and is not restricted to permanent performances. Award Function Inclusion: 2010 amendment was for concessional duty rates, not exclusion from entertainment. Sponsorship as Payment: Sponsorship amounts were considered payments for admission.Provisions of the Act
Section 3: Levies entertainment duty. Section 2: Definitions relevant to the duty.Issues Considered
Entertainment Definition: Award function with performances falls within this definition. Payment for Admission: Sponsorship amounts qualify as payment for admission.Rationale for Decision
No Machinery Provision Issue: Duty calculated on the sponsorship amount, not duration of performances. Penalty Issue: Original order lacked basis for the fine; appellate order misinterpreted compounding provision. Intent and Interpretation: Petitioner’s actions were based on a debatable legal interpretation, not intent to evade duty.Final Order
Entertainment duty of Rs. 71,87,500/- upheld. Fine/Penalty of Rs. 71,87,500/- deleted. Impugned order modified accordingly.Disposition
Rule made absolute as per the above order. Petition disposed of.
Issue of Consideration: Film & Television Producers Guild of India (FPGI) Versus State of Maharashtra Ors.
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