The Supreme Court today dismissed appeal of the Government of Maharashtra against the order of Bombay High Court which had held that the extra Charges levied by Race Club permitting some of the members to carry mobile phone during horse race as charges for uses and not admission.

The bench of justice BV Nagarathna and Justice Ujjal Bhuyan held that the so long as state is getting the revenue out of the charges levied by the club, it should not have challenged the order. The bench further observed orally that a person who carries mobile in the club does it for uses otherwise, he has an option of paying lesser fee and enter the club. 

Earlier the bench of Justices KR Shriram and Milind N. Jadhav of the Bombay High Court had ruled that, "In our view payment for admission has to be read as a whole composite definition and each part of it has to be satisfied to levy the charge of entertainment tax, and therefore, any payment for any purpose whatsoever connected with an entertainment which a person is required to make, though are terms of wider connotation, are bound by the words following in the same clause, i.e., “as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment.” The charge paid for taking the mobile phone into the races, additionally paid by the race patron is in addition to the entry fee or admission charges to enter the races. It cannot be said to be a condition of attending or continuing to attend the entertainment because such a condition is not uniformly applicable to all the persons entering the race course. In our view, unless such a condition is uniformly applicable to all persons entering the race course and is payable mandatorily and paid by all, irrespective of whether he carried a mobile phone or not, the same cannot be said to be “payment for admission” as defined in the said Act. Therefore, to the extent of the amounts paid for carrying the mobile phone into the races, it cannot be made subject to the payment of entertainment tax at the rates prescribed under the said Act."

Bombay High Court while noting the facts observed that, "Petitioner is a members club only. Petitioner, however, permits members as well as non-members, i.e., members of general public, to attend races held at its race courses on payment of entrance / admission fees. On such entrance / admission fees petitioner would collect entertainment duty and pay the same to respondents under the provisions of the Bombay Entertainments Duty Act, 1923 (hereinafter referred to as “the said Act”). By year 2002, when the petition came to be filed, and we would say much earlier, mobile phone became a common means of communication and many people started carrying and using mobile phones. For professionals and businessmen, it became indespensable and one may say an extension of their office. 

For several years, petitioner did not allow the use of mobile phones at race course during race days and “Off course racing”. But due to repeated requests from members and those non-members who were attending the races, petitioner decided to permit use of mobile phones at the race course. It was represented to petitioner that if use of mobile phones was permitted at the race courses, more people would be able to attend the races. This resulted in an increase in the collection of entertainment duty and the State stood to benefit. To restrict the nuisance being caused due to usage of mobile phone during the races, petitioner decided to levy a charge of Rs.1,000/-, later increased to Rs.1,200/-, for those who wanted to take their mobile phones inside the course during the races or for off-course racing. Those who wanted to take their mobile phone had to pay this charge, in addition to payment of entrance / admission fees. Those who did not have a mobile phone or who did not want to carry mobile phone did not have to pay any such charge. They could enter by paying only the entrance / admission fee. Therefore, as submitted by Mr. Mehta, it was not mandatory or a condition precedent for anyone to enter the race course or off course racing on race days.

Case Detial:

D.No. 26424/2023

THE STATE OF MAHARASHTRA AND ORS.
Versus
THE ROYAL WESTERN INDIA TURF CLUB LTD. AND ORS.