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PETITIONER:

OM PRAKASH PURI ANR.

Vs.

RESPONDENT:

STATE OF WEST BENGAL AND ORS.

DATE OF JUDGMENT16/02/1991

BENCH:

SAIKIA, K.N. (J)

BENCH:

SAIKIA, K.N. (J)

PUNCHHI, M.M.

CITATION:

1991 SCR (1) 465 1991 SCC (2) 172

JT 1991 (1) 493 1991 SCALE (1)235

ACT:

Constitution of India, 1950: Article 14-Section 3 and 4

of the West Bengal Entertainments and luxuries (Hotels and

Restaurants) Tax Act, 1972-Whether discriminatory and

violative of.

West Bengal Entertainments and Luxuries (Hotels and

Restautants) Tax Act. 1972: Sections 3 and 4-Constitutional

validity of.

HEADNOTE:

Under the West Bengal Entertainments and Luxuries

(Hotels and Restaurents) Tax Act, 1972 as amended in 1974,

the appellants were called upon to make ad-hoc payment of

luxury tax calculated at Rs.2,40,000. A representation from

the Hotel Association to the Respondents having being turned

down, the appellants filed Writ Petition before the High

Court, challenging the constitutional validity of the Act.

The Writ Petition was dismissed by a Single Judge. On

appeal, the Division Bench declined to interfere holding

that there was no dicrimination, and thus there was no

violation of Article 14 of the Constitution. Aggrieved, the

appellants preferred the present appeal.

Dismissing the appeal, this Court,

HELD: 1. The Luxury Tax charged under Section 4 of the

West Bengal Entertainments and Luxuries (Hotels and

Restaurants) Tax Act, 1972, is not discriminatory and is

constitutionally valid for the reasons stated in the

judgment of this Court in a similar matter wherein the same

contentions were urged. [467E-F]

M/s. Spences Hotel Pvt. Ltd. & Anr. v. State of West

Bengal and Ors., [1991] 1 SCR applied.

2. Whatever has been stated by this Court in relation

to Section 4 of the Act would be equally applicable to

Section 3 of the Act. [467F]

East India Hotels Ltd. v. State of West Bengal, AIR

1990 SC 2029, relied on.

466

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4 of

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1977.

From the Judgment and Order dated 3/4.3.1975 of the

Calcutta High Court in Appeal No. 156 of 1974.

G.L. Sanghi, Dhruv Mehta, Aman Vachhar and S.K. Mehta

for the Appellants.

Tapas Ray and G.S. Chatterjee for the Respondents.

Harish N. Salve, Lalit Bhasin, Ms. Nina Gupta, Vibhu

Bhakru, Pranab Mullick and Vineet Kumar for the intervener.

The Judgment of the Court was delivered by

K.N. SAIKIA, J. This appeal by certificate is from the

Judgment of the Calcutta High Court dated 4.3.1975 passed in

appeal No. 156 of 1974.

The appellants in partnership have been carrying on

business of restaurants under the name and style of Trinca's

at No. 17B, Park Street Calcutta, providing food and drinks

(alcohol and non-alcohol) to the customers under valid

licences. Sometimes musical performences are also arranged.

The restaurants are provided with air conditioning plant.

Under the West Bengal Entertainments and Luxuries

(Hotels and Restaurants) Tax Act, 1972 as amended by the Act

of 1974, hereinafter referred to as 'the Act, the

respondents by their Memo No. 4942/A.T. dated 9.12.1972

called upon the appellants to make ad hoc payment of luxury

tax calculated at Rs.2,40,000.00. The President of the

Hotelers' Association made a representation against this

illegal tax which was turned down by the respondents, and

thereafter the appellants challenged the validity of this

action in the Calcutta High Court by filing Writ Petition

No. 358 of 1973 on 16.5.1973. The appelants contended,

inter alia before the High Court that the levy was

unreasonable restriction on carrying the business; that the

levy was unreasonable restriction on carrying the business;

the Act was not meaningful and purposeful; the rules were

confiscatory in nature; and the mode of the Act. The

learned Single Judge of the High Court dismissed the writ

petition relying on the Judgment passed on 6.3.1974 in Writ

Petition No. 338 of 1973 wherefrom Civil Appeal No. 406 of

1976 was filed in this Court.

467

From the above order of the learned Single Judge, the

appellants filed Appeal No. 156 of 1974 on 26.6.1974 before

the Division Bench of the Calcutta High Court contending

that the legislature cannot enlarge the scope of Entry 62

and seek to impose a tax on expenditure incurred by a

customer on services rendered to him including food and

drinks. The High Court held that s. 2(b) defined

entertainment tax but s. 2(c) defined entertainment tax and

under the Act entertainment tax meant tax payable under s. 3

of the Act. A clear distinction had been made between

entertainment and entertainment tax and in this case the

High Court was concerned only with entertainment tax as

defined in s. 2(C). The second submission before the High

Court was whether the State legislature had the competence

to impose entertainment tax payable under s. 3 of the Act

and the High Court held that s. 3 was a valid piece of

legislation. The argument of the appellants was that tax

imposed by s. 3 was discriminatory and it violated Art. 14

of the Constitution. The High Court held that the

differentia made in s. 3 had a rational relation to the

object sought to be achieved by the statute. The last

submission was whether the persons enjoying the same

facilities had been treated differently as the section had

imposed a maximum tax of 15% on amount paid or payable by

the customer. The High Court held that since a distinction

had to be maintained between s. 2(b) and s. 2(c), the

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learned counsel's argument on discrimination could not be

acceded to. The appeal was accordingly dismissed, but

certificate of fitness to appeal was granted.

The contentions raised in this appeal are the same as

were raised in Civil Appeal No. 406 of 1976 whcih has just

been dismissed. In East India Hotels Ltd. v. State of West

Bengal, AIR 1990 SC 2029 this Court held that whatever has

been said by this Court in relation to s. 4 of the Act will

be equally applicable to s. 3 of the Act. Consequently, for

the above reason and for the reasons stated in our Judgment

in Civil Appeal No. 406 of 1976, we dismiss this appeal also

with costs quantified at Rs.5,000 (Rupees five thousand).

G.N. Appeal dismissed.

468