The Bombay High Court asked the beer bars and permit rooms with orchestra to continue paying the entertainment duty.
The Bombay High Court on Friday ruled that beer bars and permit rooms with live orchestra across Maharashtra will have to pay additional entertainment duty.
A division bench of justice DY Chandrachud and justice MS Sanklecha asked the beer bars and permit rooms with orchestra to continue paying the entertainment duty observing, “The fundamental right to carry on business has to be exercised in accordance with law and is subject to the payment of fiscal impositions which the competent legislature may impose.”
The court dismissed a petition filed by Ashok Gupta owner of M/s Ashoka Restaurant and Bar who had challenged the constitutional validity of the amendment of the Bombay Entertainment Duty (Amendment) Act 2010.
By the amendment, the government inserted Section 3(11A) which reads: “the proprietor of every permit room or beer bar with live orchestra will have to pay the entertainment duty in respect of entertainment in such permit room or beer bar with live orchestra, to the State Government, at the rates specified in the Table”.
The entertainment duty has to be paid by the tenth of every month. The charges were Rs50,000 for bars within limits of municipal corporations and Rs25,000 for the rest of the state.
YS Bhate and Anil Yadav, advocates for Gupta, argued that this amounts to double taxation since they have to acquire performance licence on payment of a fee of Rs500 per day. Hence, it violates their fundamental right under Article 19(1)(g) of the Constitution of India.
The judges observed that the amendment was a fiscal measure imposed by the State legislature in the exercise of its legislative power.
The court said that there was no infringement of petitioner’s right to carry business.
“Similarly, there is no merit in the submission that double taxation would result as a consequence of the impugned levy. The State government is entitled to recover a fee on performance licenses,” added the bench.
Observing that the petitioner did not provide any material to indicate that the duty of Rs50,000 which is chargeable in respect of establishments within the limits of Municipal Corporations is “expropriatory”.
The judges dismissed the petition saying, “In these circumstances, we do not find any merit to the constitutional challenge to the legislative provision.”
The court has, however, clarified that the petitioner would be at liberty to make a representation to the competent authority under the Act.
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