STATE OF KERALA & ANOTHER v. ASIANET SATELLITE COMMUNICATIONS LTD. & OTHERS

Citation: 2025 INSC 757, [2025] 5 S.C.R. 2215

Court: Supreme Court of India

Bench: B.V. Nagarathna and Nongmeikapam Kotiswar Singh, JJ.

Judgment text

SUPREME COURT OF INDIA State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others Civil Appeal No. 9301 of 2013 [2025] 5 S. C. R. 2215 : 2025 INSC 757 State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others (Civil Appeal No. 9301 of 2013) 22 May 2025 [B. V. Nagarathna* and Nongmeikapam Kotiswar Singh, JJ. ] Issue for Consideration The questions for consideration were: 1) Whether appellants- assessees, engaged in broadcasting of signals etc.

through television channels to subscribers of those channels, were liable to pay entertainment tax under provisions of respective State enactments relatable to Entry 62 - List II of the Seventh Schedule of the Constitution and also liable to pay service tax under provisions of the Finance Act, 1994 as amended from time to time as a provider of a taxable service namely broadcasting service within the scope and ambit of Entry 97-List I; and 2) Whether decision of Supreme Court in Purvi Communication had failed to consider the tests laid down in Geeta Enterprises and to that extent was per incuriam. Headnotes† Constitution of India - Seventh Schedule - List I, Entry 97 and List II, Entry 62 - Different aspects of same activity - Taxation under two different legislations by two different legislatures - Assessees, engaged in broadcasting of signals etc.

through television channels to subscribers of those channels - If liable to pay entertainment tax under provisions of respective State enactments relatable to Entry 62 of List II and also liable to pay service tax as a provider of a taxable service namely broadcasting service within the scope and ambit of Entry 97 of List I: Held: There are two aspects in the activity undertaken by the assessees - The first is the act of transmission of signals of the content to the subscribers - The second aspect here concerns not only the content of the signals, but the effect of the decryption of the signals by the Set-Top Boxes and the viewing cards inside these boxes provided by the assessees to the subscribers, which * Author 2216 is providing and receiving of entertainment through the television - Without the apparatus provided for by the assessees to decrypt the signals, the subscriber would not be able to watch the content that is transmitted, the content being for the purpose of entertainment - The television entertainment provided by them through their modus operandi i.

e.

, by broadcasting, is a luxury within the meaning of Entry 62 of List II - The assessees who are engaged in the activity of providing entertainment are liable to pay service tax on the activity of broadcasting under the provisions of the Finance Act, 1994 read with relevant amendments and are also liable to pay entertainment tax in terms of Entry 62 of List II as being a specie of luxuries - Therefore, both the taxes, one by the State Legislature and the other, by the Parliament are leviable on the activity of the assessees - This is because by rendering the service of broadcasting, the assessees are entertaining the subscribers within the meaning of Entry 62 of List II -There is no overlapping in fact or in law, inasmuch as different aspects of the same activity are being taxed under two different legislations by two different legislatures - This is because the activity of broadcasting is a service and liable to service tax imposed by the Parliament (Entry 97 of List I) and the activity of entertainment is a subject falling under Entry 62 of List II and therefore, the assessees herein are liable to pay entertainment tax as well - Hence, the State Legislatures as well as the Parliament, both have the legislative competence to levy entertainment tax as well as service tax respectively on the activity carried out by the assessees herein.

[Para 17. 37] Doctrines - Aspect theory - Double aspect doctrine - A tool of constitutional interpretation used in Canada to resolve issues which arise when both the federal and provincial government have the right to legislate on a subject - Usage of aspect theory in the Indian context - Discussed: Held: In India, there appears to be no clarity on the application of the aspect theory in the Canadian sense - One of the reasons being that in India, both the Parliament as well as the State Legislature do not have powers to levy tax on the same subject - The aspect theory has been applied in India essentially to ascertain whether an activity would fall within the scope and ambit of an enactment and whether the said enactment in pith and substance would fall within an Entry of a particular List of the Seventh Schedule so as to confer legislative competence to tax that aspect of the activity - Aspect State of Kerala & Another v. Asianet Satellite Communications Ltd.

& Others theory has no relevance, as such, in determining the constitutionality of any provision on the ground of legislative competence in India - Aspect theory is however relevant to determine the applicability of a taxing statute on the activity or transaction sought to be taxed i. e.

, whether the statute covers an activity which falls within a specific taxation entry, either in List I or in List II - Thus, an activity could be taxed by two different legislatures on the basis of the entries in the respective Lists without there being a clash and within their legislative competence - However, the aspect of the activity which is being taxed must be relatable to the legislation under a specific entry of a particular List so as to be within the legislative competence of a particular legislature - Thus, the aspect theory is used to determine if, in fact, there are different aspects within the activity sought to be taxed and whether the taxable event which forms the basis of the levy in a legislative enactment corresponds to any aspect in the activity sought to be taxed - This is in contrast to the applicability of this theory in Canada, where this theory is used therein to determine legislative competence of a federal or provincial legislature to enact a particular law.

[Paras 17. 27, 17. 33-17.

36] Taxation - Activity of Broadcasting service - Application of Aspect theory - Both entertainment tax as well as service tax can be imposed on the activity of broadcasting through television for the purpose of entertainment of the subscriber or the receiver thereof - The two taxes are different aspects of the same activity which enable two different legislatures to impose tax under distinct taxation entries in two different Lists: Held: One aspect of an activity, say broadcasting service, can be amenable to service tax, while the other aspect of the same activity, namely, providing (of) entertainment to television viewers (as that is the object of broadcasting) can be amenable to "luxury tax" under Entry 62 List II of the Constitution which could be levied on the recipients of such entertainment or on the service providers who are essentially broadcasters - Broadcasting service being a taxable service under the provisions of the Finance Act, 1994, read along with the amendments made from time to time would enable both the Parliament to impose service tax on broadcasting service and the State Legislatures having the legislative competence to levy entertainment tax on those who provide entertainment to the recipients (television viewers) to impose a luxury tax - Entry 62 of List II contemplates a tax on entertainments or amusements 2218 as objects on which a tax can be imposed and therefore it is not possible to differentiate between an entertainment provider and an entertainment receiver - The principle is well settled that two taxes which are separate and distinct imposed on two aspects of an activity are permissible, as in law, there is no overlapping - This is because the taxes are relatable to distinct taxation entries in separate legislative Lists - In the instant case, the Parliament under the Finance Act, 1994 and its amendments is not imposing a tax on entertainment - Such a tax is being imposed by the State Legislatures as entertainment is a luxury within the meaning of Entry 62 of List II - In the same way, the Finance Act along with its amendments seeks to impose a tax on the service rendered by the broadcasting agency which is imposed under Entry 97 of List I - In the same vein, under Entry 62 of List II, the State Governments are not imposing any service tax on the assessees.

[Paras 17. 27, 17. 28, 17. 30, 17.

31] Constitution of India - Articles 246, 248 and Seventh Schedule, List I, II & III - Constitutional Scheme regarding distribution of Legislative Powers - Legislative competence to levy a tax - Expression "subject to" and "with respect to" in Article 246 - Applicability of doctrine of pith and substance: Held: Taxation entries under List I and List II (there being no taxation entry in the Concurrent List) are clearly demarcated within the scope of the entries in the aforesaid respective Lists - Subject of taxation is considered to be a distinct matter for the purposes of legislative competence and the power to tax cannot be deduced from the general legislative entry as an ancillary power - Also, a power to legislate as to the principal matters specifically mentioned in the entries shall also include within its expanse, a legislation touching upon incidental and ancillary matters - This principle is derived from the use of the expression "with respect to" in Article 246 of the Constitution - Entry 97 of List I which is a residuary entry relatable to Article 248 of the Constitution cannot be invoked or pressed into service when a particular entry empowering the Parliament or the Legislature of a State to pass laws regarding the taxation on any subject is specifically enumerated either in List I or List II - Consequently, as there is no taxation entry in List III, both the Parliament as well as the Legislature of the State cannot have competence to levy tax on any one subject of a List - While interpreting taxation entries in List I or List II, i.

e. , while determining State of Kerala & Another v. Asianet Satellite Communications Ltd.

& Others the legislative competence to levy a tax, all efforts must be made to interpret them in such a way as to give expansive content and meaning to the same having regard to the constitutional scheme under which the distribution of legislative powers has been envisaged in the Seventh Schedule and bearing in mind the object and intent behind them and also the advances made in human thought and technology - The expression "subject to" and "with respect to" in Article 246 of the Constitution aids the applicability of the doctrine of pith and substance to find out the true character of the enactment and the entry within which it would fall - The said doctrine is applied to resolve an issue regarding legislative competence of a legislature to enact a particular law in relation to a subject relatable to an Entry in a List under the Seventh Schedule of the Constitution - Any apparent conflict with respect to an entry in another List is resolved on the basis of the pith and substance doctrine.

[Paras 17. 7-17. 10, 17. 12, 17.

13] Doctrines - Doctrine of pith and substance - If a law is in its pith and substance within the competence of the Legislature which has made it, it will not be invalid because it incidentally touches upon the subject lying within the competence of another Legislature: Held: Where there is an apparent overlapping between two legislative entries in the Lists of Seventh Schedule of the Constitution, the doctrine of pith and substance is applied to find out the true character of the enactment concerned and the entry within which it would fall - The doctrine of pith and substance, in short, means, if an enactment substantially falls within the powers expressly conferred by the Constitution upon the legislature which enacted it, the same cannot be held to be invalid merely because it incidentally encroaches on matters assigned to another legislature - Also, in a situation where there is overlapping, the said doctrine has to be applied to determine to which entry, a piece of legislation could be related to by examining the true character of the enactment or a provision thereof - Due regard must be had to the enactment as a whole and to its scope and objects - Question of invasion into another legislative territory has to be determined by substance and not by degree - The doctrine of pith and substance is applied to consider the vires of a legislation impugned on the basis of the principle of legislative competence in the context of legislative relationship between the Centre and the 2220 State - Constitutional validity of a taxing statute on the ground of legislative competence has to be examined in the context of the doctrine of pith and substance as envisaged under Article 246 of the Constitution of India read with the respective entries in the List -Once the contours of an entry under which a legislation is sought to be made is ascertained, the next step is to study the legislation in question in order to ascertain whether it falls within the contours of that Entry - If it does fall within the contours of a particular entry in a particular List, then that particular legislature which has enacted it would have the legislative competence to enact such a legislation - But a legislation incidentally touching upon an entry in another List does not render it invalid, it means that so long as a piece of legislation is in pith and substance falling within an entry in a particular List, it would be valid as the legislature which has enacted it, has the legislative competence to do so.

[Paras 8. 2. 2, 17. 33] Taxation - Parameters of Taxation, as enumerated by Supreme Court in Govind Saran Ganga Saran, discussed: Held: A legislative enactment which provides for the imposition of a tax must specify the following parameters of taxation: (i) The taxable event which forms the basis of levy, also referred to as "subject" of a tax; (ii) The measure of the tax; (iii) The rate(s) of taxation; and (iv) The incidence of the tax - The said parameters are each distinct and must not be conflated with the others - The components of tax, as stated above have been characterised in Govind Saran Ganga Saran case- In the said case, it was also laid down that a legislative scheme which seeks to impose a tax, ought to define each of the aforestated components with certainty and precision. [Paras 8. 26, 17.

23] Taxation - Taxation on Luxuries: Entertainments & Amusements - Words and Expressions - "Luxuries" - Meaning of - Bearing in mind the meaning of "entertainments" and "amusements" and since they come within the scope of "luxuries", therefore, the State legislature has legislative competence to impose entertainment tax under Entry 62 of List II as a tax on luxuries - Constitution of India - Seventh Schedule, List II, Entry 33 & 62. [Paras 8. 6-8. 12, 17. 20] Words and Phrases - "Entertainments" and "Amusements" - Meaning of - Expressions "entertainments and amusements" State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others have to be read ejusdem generis - Constitution of India - Seventh Schedule, List II, Entry 62: Held: The expression "entertainments" is a word of general import and in common parlance, it includes cinema shows, dramatic performances, etc.

- The expression 'entertainments' used in Entry 62 of List II does not draw a distinction between one who derives amusement and one who caters to it - It covers both categories - Expression "entertainments" cannot be interpreted in a narrow, pedantic or in a myopic way - With the advancement in technology, there can be several modes in which the activity of entertainment can be provided or received - However, what is essential is the object of providing or receiving signals etc.

which must be for the purpose of entertainment - Expression "entertainments/ entertainment" includes within its scope and ambit not only the provider of entertainment but also the receiver, inter alia, through the medium of television - Thus, entertainment through television network either through cable television or DTH through set-top box with the object of providing entertainment to the viewer can be taxed in terms of Entry 62 of List II - The expression "amusement" in Entry 62 of List II would mean diversion, pass time or enjoyment or a pleasurable occupation of the senses or that which furnished it - The expressions "entertainments and amusements" would have to be read ejusdem generis. [Paras 8. 20-8. 23, 17.

22] Words and Phrases - "Entertainment" - Interpretation of - Geeta Enterprises case versus Purvi Communication case - Discussed: Held: There is no contradiction in the judgments of Supreme Court in Geeta Enterprises and Purvi Communications - Judgment in Geeta Enterprises can never be a binding precedent for the question raised before this Court in Purvi Communication - Discussion on the content and meaning, scope and ambit of the expression 'entertainments' in Geeta Enterprises is not comprehensive - This is because, having regard to the advances in technology resulting in varied forms of entertainments through various media and in a variety of ways, not only in a public place but also in the confines of private space such as a home, through mobile or a cell phone or smart watch and other personal devices etc.

, the expression 'entertainments' must be given a broad, liberal and expansive meaning than what has been discussed in Geeta Enterprises by 2222 this Court - Purvi Communication is not per incuriam and need not be referred to a larger Bench. [Paras 10. 6, 10. 14, 17. 24, 17. 25] Words and Phrases - "Broadcasting" and "Broadcasting agency or organization" - Prasar Bharti (Broadcasting Corporation of India) Act, 1990 - Section 2(c) - Finance Act, 1994 as amended by the Finance Act, 2001 - Section 65(13). [Para 17. 14-17. 18] Constitution of India - Seventh Schedule, Lists I, II & III - Fee in respect of any of the matters in the three Lists - Does not include the power to levy tax - Distinction between levy of fee and levy of tax. [Para 17. 11] Service Tax - Service tax on broadcasting agency - Finance Act, 1994 as amended by the Finance Act, 2001 - Sections 65(72)(zk) and 66.

Held: Broadcasting service is a taxable service and the broadcasting service provider is required to pay service tax under the provisions of the Finance Act, 1994 as amended from time to time. [Para 17. 19] Case Law Cited State of West Bengal v. Purvi Communication Pvt. Ltd. [2005] 2 SCR 954 : (2005) 3 SCC 711 - held not per incuriam. Western India Theatres v. Cantonment Board, Poona [1959] Supp. 2 SCR 63 - followed. Union of India v. H. S. Dhillon [1972] 2 SCR 33 : (1971) 2 SCC 779; MPV Sundararamier & Co. v. State of Andhra Pradesh [1958] SCR 1422 : AIR 1958 SC 468;M/s Hoechst Pharmaceuticals Ltd. v. State of Bihar [1983] 3 SCR 130 : AIR 1983 SC 1019- relied on. Anjum Kadari v. Union of India,2024 INSC 831 : [2024] 11 SCR 365;P. M. Ashwathanarayana Setty v. State of Karnataka [1988] Supp. 3 SCR 155 : (1989) Supp. 1 SCC 696;R. K. Garg v. Union of India [1982] 1 SCR 947 : (1981) 4 SCC 675;Kodar v.

State of Kerala [1975] 1 SCR 121 : (1974) 4 SCC 422; Kerala Hotel and Restaurant Association v. State of Kerala [1990] 1 SCR 516 : (1990) 2 SCC 502;Ganga Sugar Corporation Ltd. v. State of Uttar Pradesh [1980] 1 SCR 769 : (1980) 1 SCC 223;Income Tax Officer, Shillong v. R. Takin Roy Rymbai [1976] 3 SCR 413: (1976) SC 670;State of Kerala v. Mar Appraem Kuri Company Ltd. State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others [2012] 4 SCR 448 : (2012) 7 SCC 106;Bharat Sanchar Nigam Limited v. Union of India [2006] 2 SCR 823 : (2006) 3 SCC 1; K. Damodarasamy Naidu & Bros. v. State of Tamil Nadu [1999] Supp. 3 SCR 597 : (2000) 1 SCC 521;Association of Leasing & Financial Service Companies v. Union of India [2010] 13 SCR 381 : (2011) 2 SCC 352;Special Reference No. 1 of 2001, In Re: Association of Natural Gas v. Union of India [2004] 3 SCR 534 : (2004) 4 SCC 489; Federation of Hotel & Restaurant Association of India v.

Union of India [1989] 2 SCR 918 : (1989) 3 SCC 634; All India Federation of Tax Practitioners v. Union of India [2007] 9 SCR 527;Godfrey Phillips Ltd. v. State of U. P. [2005] 1 SCR 732 : (2005) 2 SCC 515;Geeta Enterprises v. State of Uttar Pradesh [1983] 3 SCR 812 : (1983) 4 SCC 202; Commissioner of Central Excise and Customs, Kerala v. Larsen and Toubro Ltd. [2015] 8 SCR 1046 : (2016) 1 SCC 170;Hoechst Pharmaceuticals Ltd. v. State of Bihar [1983] 3 SCR 130 : (1983) 4 SCC 45;Bharat Sanchar Nigam Limited, Imagic Creative (P) Ltd. v. CCT [2008] 1 SCR 457 : (2008) 2 SCC 614; Larsen and Toubro Limited v. State of Karnataka [2013] 17 SCR 678 : (2014) 1 SCC 708;Commissioner of Income Tax, Bangalore v. B. C. Srinivasa Setty [1981] 2 SCR 938 : (1981) 2 SCC 460;Govind Saran Ganga Saran v. CST [1985] 3 SCR 985 : 1985 Supp. SCC 205;Express Hotels (P) Ltd. v. The State of Gujarat [1989] 2 SCR 893 : 1989 3 SCC 677;State of Karnataka v.

State of Meghalaya [2022] 18 SCR 516 : (2023) 4 SCC 416;Suresh v. State of T. N. [1996] Supp. 8 SCR 947 : (1997) 1 SCC 319;CCE v. Grasim Industries Ltd. [2018] 6 SCR 1099 : (2018) 7 SCC 233;Mineral Area Development Authority v. Steel Authority of India [2024] 7 SCR 1549 : 2024 SCC OnLine SC 1796;Navinchandra Mafatlal v. Commissioner of Income-Tax, Bombay City [1955] 1 SCR 829 : AIR 1955 SC 58;Chhotabhai Jethabhai Patel and Co. v. Union of India [1962] Supp. 2 SCR 1 : AIR 1962 SC 1006;Calcutta Gas Company Ltd. v. State of West Bengal [1962] Supp. 3 SCR 1: AIR 1962 SC 1044;RMD Chamarbaugwalla v. Union of India [1957] SCR 930 : AIR 1957 SC 628;Builders' Association of India v. Union of India[1989] 2 SCR 320 : (1989) 2 SCC 645;A. B. Abdul Kadir v. State of Kerala [1976] 2 SCR 690 : (1976) 3 SCC 219;Bangalore Turf Club Ltd. v. Regional Director, ESI Corporation [2014] 8 SCR 1021 : (2014) 9 SCC 657;State of Karnataka v. Drive-in Enterprises [2001] 2 SCR 378 : (2001) 4 SCC 60;M. J. Sivani v.

State of Karnataka [1995] 3 SCR 329 : AIR 1995 SC 1770; State of M. P. v. Abha Sethi [1999] 2224 2 SCR 930 : (1999) 4 SCC 32;Goodyear India Ltd. v. State of Haryana [1989] Supp. 1 SCR 510 : (1990) 2 SCC 71;International Tourist Corporation v. State of Haryana[1981] 2 SCR 364;Elel Hotels & Investments Ltd. v. Union of India [1989] 2 SCR 880 : (1989) 3 SCC 698;State of West Bengal v. Kesoram Industries Ltd. [2004] 1 SCR 564 : (2004) 10 SCC 201;Union of India v. Mohit Minerals Pvt. Ltd. [2018] 13 SCR 139;State of Andhra Pradesh v. Mc Dowell & Co. [1996] 3 SCR 721;Gujarat Ambuja Cements Ltd. v. Union of India [2005] 2 SCR 1038 : (2005) 4 SCC 214; Laghu Udhyog Bharti v. Union of India [1999] 3 SCR 1199 : (1999) 6 SCC 418;Rai Ramakrishna v. State of Bihar [1964] 1 SCR 897: AIR 1963 SC 1667;Tata Sky Ltd. v. State of M. P. [2013] 2 SCR 849 : (2013) 4 SCC 656;East India Tobacco Company v. State of Andhra Pradesh [1963] 1 SCR 404;TwyFord Tea Co. v.

State of Kerala [1970] 3 SCR 383 : (1970) 1 SCC 189 - referred to. Prafulla Kumar Mukherjee v. Bank of Commerce, Khulna, AIR 1947 P. C. 60;A. L. S. P. P. L. Subrahmanyan Chettiar v. Muttuswami Goundan, AIR 1941 FC 47;United Provinces v. Atiqa Begum, AIR 1941 FC 16;Re: The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, AIR 1939 FC 1; Governor General in Council v. Province of Madras (1945) FCR 179: AIR 1945 PC 98 referred to. Tata Sky Limited v State of Uttarakhand, Writ Petition (M/B) No. 4 of 2010;Bharti Telemedia Ltd. v. Government of NCT of Delhi, W. P. (C) No. 4935 of 2011;M/s. Tata Sky Ltd. v. State of Orissa, Writ Petition (C) No. 8966 of 2011;Cantonment Board Poona v. Western India Theatres Ltd. , AIR 1954 BOM 261;Tamil Nadu Cable TV Organisers v. Government of Tamil Nadu, W. P. No. 16237/1994; Tamil Nadu Cable TV Organisers Association v. Government of Tamil Nadu, W. P. No. 10013 of 1994 dt. 30. 11. 1994;Vasant Madhav Patwardhan v.

State of Maharashtra, 2000 SCC OnLine Bom 244;Gopal Krishna Agarwal v. State of Uttar Pradesh (1982) All. L. J. 607; Sky Vision T. V v. State of Bihar, 1995 (2) BJLR 845; Dish TV India Ltd. v. State of Uttarakhand, W. P. (M/S) No. 2562 of 2007;Tata Sky Ltd. v. State of M. P. , W. P. No. 10148 of 2009; A. Thangal Kunju Musaliar v. M. Venkatachalam Potti (1956) 29 ITR 349 - referred to. Lyle Francis Smith v. Her Majesty the Queen [1960] SCR 776; Union Colliery Co. of British Columbia v. Bryden, 1899 AC 580 - referred to. State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others Books and Periodicals Cited Oxford English Dictionary, Second Edition, Volume IX; P. Ramanatha Aiyar's Advanced Law Lexicon, 6th Edition, Volume II; Reader's Digest Family Word Finder; Webster's Third New International Dictionary; Concise Oxford English Dictionary, 11th Edition; Canada's Federal System by A. H. F.

Lefroy; Tax, Constitution and the Supreme Court by Sri Karthik Sundaram (OakBridge, 2024); Chapter by Sri V. Niranjan, K. C. in Oxford Handbook of the Indian Constitution; Cooley on Taxation -referred to.

List of Acts Constitution of India; Finance Act, 1994; Finance Act, 2002; Finance Act, 2003; Finance Act, 2004; The Kerala Tax on Luxuries Act,1976; Uttarakhand (Uttar Pradesh Entertainment and Betting Tax Act, 1979; Rajasthan Entertainments & Advertisements Tax Act, 1957; Rajasthan Entertainments & Advertisements Tax Rules, 1957; Gujarat Entertainment Tax (Amendment) Act, 2009; Gujarat Entertainment Tax (Exhibition by means of Direct-to Home (DTH) Broadcasting Services) Rules, 2010; Jharkhand Entertainment Tax Act, 2012; Uttar Pradesh Entertainments and Betting Tax (Amendment) Ordinance, 2009; Uttarakhand (Uttar Pradesh Entertainment and Betting Tax Act, 1979) (Amendment) Act, 2009; Punjab Entertainment Duty Act, 1955; The Delhi Entertainments and Betting Tax Act, 1996; Delhi Entertainments and Betting Tax (Amendment) Rules, 2010; The Assam Amusement and Betting Tax Act, 1939; The Orissa Entertainment Tax Act, 2006; Orissa Entertainment Tax (Amendment) Act, 2010; The Tamil Nadu Entertainments Tax Act, 1939.

List of Keywords Entertainment Tax; Service Tax; Broadcasting Services; DTH Operators; Aspect Theory; Pith and Substance; Entry 62 List II; Entry 97 List I; Entry 31 List I; Legislative Competence; Taxing Power; Constitutional Law; Centre State Relations; Double Taxation; Residuary Powers; Federalism; Overlapping Jurisdiction; Cable Television; Private Entertainment; Public Entertainment; Judicial Review; Tax on Luxuries; Interpretation of Constitution; Harmonious Construction; Doctrine of Aspect; Doctrine of Pith and Substance; Entry 92C List I; Taxability of Services; State Tax Vs Central Tax; Communication Services; Ministry of Information and Broadcasting; 2226 Set Top Box; Direct to Home Broadcasting; Finance Act 1994; Negative List Regime; Broadcasting and Communication; Purvi Communication Case; Geeta Enterprises Case; Bharat Sanchar Nigam Case; Godfrey Phillips Case; Entry-Based Interpretation; Concurrent List; Taxable Event; Union List; State List; Discriminatory Taxation; Tax on Admission; Constitutional Entry Interpretation; Substantial Nexus; Doctrine of Colorable Legislation.

Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9301 of 2013 From the Judgment and Order dated 28. 06. 2012 of the High Court of Kerala at Ernakulam in WPC No. 33966 of 2006 With Civil Appeal Nos. 1629, 1765-1766, 1531, 1533, 1534, 1752, 1753, 1755, 1532, 1687, 1688, 1689, 1690, 1548-1549, 1630, 1726, 1725, 1543, 1547, 1680, 1754, 1756, 1530, 1628, 1535, 1679, 1681-1682, 1683, 1684, 1685, 1686, 1580, 1581-1583 and 1536 of 2020, Civil Appeal No. 10114 of 2011, Civil Appeal Nos. 2147, 5867 and 5228 of 2012, Writ Petition (C) No. 699 of 2014, Writ Petition (C) No. 748 of 2015, SLP (C) No. 9025 of 2023. Appearances for Parties Advs. for the Appellants: Pallav Shisodiya, K. K. Venugopal, S. K. Bagaria, Tarun Gulati, Arvind P. Datar, Pallav Shisodiya, Sr. Advs. , Nishe Rajen Shonker, Mrs. Anu K Joy, Alim Anvar, Ajith Anto Perumbully, Riddhi Bose, Ms. Racheeta Chawla, Ms.

Rishi Agarwal, Sampriti Baksi, Mahesh Agarwal, Rishi Agrawala, Manu Krishnan, Kamaldeep Dayal, Victor Das, Ms. Madhavi Agrawal, Ms. Madhvi Agarwal, Vipul Singh, Ashwini Kumar, Ms. Chitra Agarwal, Ms. Anwesha Padhi, Ms. Manavi Agarwal, Chinmayee Chandra, Ankur Talwar, Yash Jain, Ajit Kr. Singh, E. C. Agrawala, Vivek Sarin, Aakarshan Aditya, Dibya Prashant Singh, Satish C. Kaushik, Dhruv Dev Gupta, Sahil Bhalaik, Tushar Giri, Siddharth Anil Khanna, Ritik Arora, Shivam Mishra, Gowtham Polanki, Ms. Gulshan Jahan, Md. Rashid Saeed, Harish Pandey, Gopal Singh, Akhilesh Kumar Pandey, M/S. Acm Legal, Dr. Shashwat Bajpai, Rohit Amit Sthalekar, Purnendu Bapai, Shashank Singh, Mahir Khanna, Sahil Tagotra, Ms. Shankari Mishra, Sujay Jain, Rakesh Talukdar, Ms. Abhivyakti Banerjee, State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others Ashwani Kumar Dubey, Praveen Kumar, C. K. Sasi, Ms. Nayantara, Dinesh Dahiya, Ms.

Meena K Poulose, Kumar Visalaksh, Udit Jain, Ajitesh Dayal Singh, Devansh Garg, Harish Pandey, Praveen Kumar, Abhishek Vikas, Nishe Rajen Shonker, Mrs. Anu K Joy, Alim Anvar, Ajith Anto Perumbully, Riddhi Bose, Ms. Racheeta Chawla, Ms. Rishi Agarwal, Ms. Sampriti Baksi. Advs. for the Respondents: K M Nataraj, N. Venkatraman, A. S. Gs. , Shadan Farasat, Sr. A. A. G. , Gurminder Singh A. G. Punjab, K N Balgopal Advocate General of State of Nagaland, S. K. Bagaria, Tarun Gulati, Mrs. Shirin Khajuria, Dr. Manish Singhvi, Arunabh Chowdhury, Preetesh Kapur, K Radhakrishnan, Nalin Kohli, Ms. Nisha Bagchi, V. K. Khanna, Sanjay Kharde, Saurabh Mishra, Jaideep Gupta, Sr. Advs. , M/s. Corporate Law Group, Ms. Bhavana Duhoon, Kumar Ajit Sinha, Ms. Swati Tiwari, Devansh Garg, Anshul Syal, Kumar Sambhav, Shantanu Sagar, Anil Kumar, Gunjesh Ranjan, Manoneet Dwivedi, Ms. Pallavi Langar, Manoj Kumar, Sujeet Kumar C. , Ankit Khatri, Bhakti Vardhan Singh, Milind Kumar, Apurv Singhvi, Ms.

Shalini Haldar, Ms. Yasha Goyal, Rajiv Shanker Dvivedi, Ms. Tulika Mukherjee, Shwetank Singh, V. Aravind, Ms. Rooh-e- hina Dua, Harshit Khanduja Khanduja, Harshit Khanduja, Ankit Khera, Abhishek Babbar, Mrs. Kirti Renu Mishra, Sanjay Dutt, Ms. Deepanwita Priyanka, Mukesh Kumar Maroria, Sabarish Subramanian, C Kranthi Kumar, Vishnu Unnikrishnan, Danish Saifi, Shuvodeep Roy, Anshul Malik, Shruti Agrawal, Anando Mukherjee, Abhay Pratap Singh, M. P. Vinod, Krishnanand Pandeya, Ms. Swati Ghildiyal, Ms. Devyani Bhatt, Ms. Srujana Suman Mund, Abhishek Atrey, Rajat Mittal, K. V. Vijayakumar, Samir Ali Khan, Sanjay Kapur, Ms. Isha Virmani, Ms. Mahima Kapur, Mrs. Shubhra Kapur, Gurmeet Singh Makker, V C Bharathi, Rajat Nair, Adit Khorana, Udai Khanna, Shivank Pratap Singh, Sarthak Karol, Chandan Kumar, Manish Kumar, Dharmendra Kumar Sinha, Raj Bahadur Yadav, Surjendu Sankar Das, Anand Murthi Rao, B. Krishna Prasad, Hitesh Kumar Sharma, Amit Kumar Chawla, Varun Varma, Ms.

Tanishka Grover, Akhileshwar Jha, Ms. Sandhya G. , Kamal Mohan Gupta, Siddharth Dharmadhikari, Aaditya Aniruddha Pande, Bharat Bagla, Sourav Singh, Aditya Krishna, Ms. Preet S. Phanse, Adarsh Dubey, Sachin Patil, Sarad Kumar Singhania, Sunny Choudhary, Sarad Kumar Singhania, Ms. Rashmi Singhania, Avijit Mani Tripathi, P. V. Yogeswaran, Ms. K. Enatoli Sema, Ms. Limayinla Jamir, Amit Kumar Singh, Ms. Chubalemla 2228 Chang, Prang Newmai, Ms. Nitya Nambiar, Sameer Abhyankar, Rahul Kumar, Ms. Ayushi Bansal, Aryan Srivastava, Sarthak Dora, Ms. Astha Sharma, Srisatya Mohanty, Himanshu Chakravarty, Ms. Riddhi Bose, Ms. Racheeta Chawla, Simranjeet Singh Rekhi, Ms. Sampriti Bakshi, Rishi Agarwal, Siddharth Banerjee, M/s. Plr Chambers And Co. , M/s. Venkat Palwai Law Associates, Ms. Devina Sehgal, Mahfooz Ahsan Nazki, Gopal Singh, Akshat Kumar, Ms. G. Indira, Vatsal Joshi, Krishna Kant Dubey, Ms. Indira Bhakar, Harish Pandey, Shashwat Parihar, Ms. Priyadarshini Priya, Rajesh Singh Chauhan, Ms.

Priyanka, Shreekant Neelappa Terdal, Ms. Shashi Kiran, D. S. Mahra, Rajiv Kumar Choudhry, V. N. Raghupathy, Vishwanath P. Allannavar, Divyanshu Kumar Srivastava. Judgment / Order of the Supreme Court Judgment Nagarathna, J. I N D E X* 1. Bird's Eye View of the Controversy: ........................................ 6 2. Facts in brief: .............................................................................. 8 3. Writ Petitions filed before this Court: ...................................... 24 a. W. P. (C) No. 699/2014: ....................................................... 24 b. W. P. (C) No. 748/2015: ........................................................ 26 4. Submissions: .............................................................................. 28 a. Submissions on behalf of Appellants: ............................ 28 b. Submissions of Respondent-States: .............................. 51 i. State of West Bengal: .............................................. 51 ii.

State of Uttar Pradesh: ............................................ 53 iii. State of Odisha: ........................................................ 54 iv. State of Tamil Nadu: ................................................. 62 v. State of Rajasthan: .................................................. 70 vi. State of Punjab: ........................................................ 71 vii. State of Nagaland: .................................................... 71 viii. State of Andhra Pradesh: ........................................ 72 ix. Union of India: .......................................................... 72 * Ed. Note: Pagination as per the original Judgment. State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others c. Reply Arguments: ............................................................. 73 5. Points for Consideration: .......................................................... 73 6.

Legal Framework: ....................................................................... 75 a. Relevant Entries of the Seventh Schedule of the Constitution: ...................................................................... 77 b. Finance Act, 1994 with Relevant Amendments: ............ 78 c. Relevant Provisions of the State Enactments: .............. 91 i. Assam Amusements and Betting Tax Act, 1939: ... 91 ii. Delhi Entertainments and Betting Tax Act, 1996: .. 94 iii. Gujarat Entertainments Tax Act, 1977: .................. 96 iv. Jharkhand Entertainment Tax Act, 2012: .............. 104 v. Kerala Tax on Luxuries Act, 1976: ......................... 108 vi. Orissa Entertainment Tax Act, 2006: ..................... 117 vii. Punjab Entertainment Duty Act, 1955: ................... 120 viii. Rajasthan Entertainments and Advertisements Tax Act, 1957: ........................................................... 128 ix. Tamil Nadu Entertainments Tax Act, 1939: ........... 130 x.

Uttar Pradesh Entertainment and Betting Tax Act, 1979: .......................................................................... 133 7. Interpretation of Entries of the Lists of the Seventh Schedule of the Constitution: .................................................................... 142 8. State of Karnataka vs. State of Meghalaya: ............................ 157 9. Meaning and Scope of the expression "Luxuries, Entertainments and Amusements" and Legislative Competence of State Legislatures to impose Entertainment Tax: ............................ 162 a. Luxuries: ............................................................................ 162 b. Entertainments and Amusements: .................................. 168 c. Amusement: ....................................................................... 171 10. Parameters of Taxation: ............................................................. 180 11.

Relevant case law: .................................................................... 184 a. Suresh: .............................................................................. 184 b. Vasant Madhav Patwardhan: ........................................... 194 12. Geeta Enterprises vs. Purvi Communication: ........................ 195 13. "Aspect Theory" or Aspect Doctrine: A Discussion .............. 217 14. Criticism of its Use in Indian Context: .................................... 219 2230 15. Usage of Aspect Theory in the Indian Context: ..................... 222 16. Aspect Theory: Its Extent and Scope in India: ....................... 246 17. Application of Aspect Theory to the Case at hand: ............... 256 18. Modus Operandi of the Assessees and their aspects: .......... 260 19. Allahabad High Court's Ruling on retrospective operation of the Amendment: ..................................................................... 265 20. State of Kerala vs.

Asianet: ....................................................... 277 a. Submissions: ..................................................................... 282 b. Judgments relied upon by State of Kerala: .................... 283 21. Jharkhand High Court's Ruling: ............................................... 293 22. Summary of Discussion and Conclusions: ............................. 296 a. Constitutional Scheme regarding distribution of Legislative Powers: ........................................................... 298 b. Service Tax: ....................................................................... 303 c. Tax on Luxuries: Entertainments & Amusements .......... 305 d. Parameters of Taxation under State Enactments: ........ 307 e. Geeta Enterprises and Purvi Communications: ............ 308 f. Aspect Theory: ................................................................... 310 Leave granted in Special Leave Petition (Civil) No. 9025 of 2023. 1.

1 Since common questions of law and facts arise in these civil appeals and writ petitions, they have been heard together and are being disposed of by this common judgment. 1. 2 The Civil Appeals arise from the judgments of the High Courts of Allahabad, Delhi, Gauhati, Gujarat, Jharkhand, Kerala, Madras, Orissa, Punjab & Haryana, Rajasthan and Uttarakhand while two writ petitions have been filed before this Court under Article 32 of the Constitution by M/s Tata Play & Another and M/s Tata Play Ltd. Bird's Eye View of the Controversy: 2. The assessees have filed these appeals assailing the provisions of the respective State Acts under which tax on entertainment has charged on them on the premise that their activity is relatable to State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others the field of entertainment as envisaged under Entry 62 - List II of the Seventh Schedule to the Constitution.

It is their contention that they are not liable to pay entertainment tax (or luxury tax) under the respective provisions of the State enactments. It is further case of the assessee that they are engaged in broadcasting of signals etc. through television channels to the subscribers of those channels hence, possibly they are liable to pay service tax to the Central Government under Entry 97 - List I of the Seventh Schedule of the Constitution. There are however two writ petitions filed by certain assessees who have also ventilated their grievance that they are not liable to pay service tax as well.

The question whether the appellants-assessees are liable to pay entertainment tax under the provisions of the respective State enactments which are relatable to Entry 62 - List II of the Seventh Schedule of the Constitution and are also liable to pay service tax under the provisions of the Finance Act, 1994 as amended from time to time as a provider of a taxable service namely broadcasting service within the scope and ambit of Entry 97 - List I which is a residuary entry for the relevant purpose of assessment is the moot question which arises in these appeals. 2. 1.

The State of Kerala being aggrieved by the striking down of the sub-section (iv) of proviso to Section 4 under which the cable operators who have less than 7,500 connections are being exempt from payment of entertainment tax and whereas those who have over and above 7,500 connections are liable to pay the same tax being discriminatory in nature and being strike down by the Kerala High Court is questioned by the State of Kerala in its appeal. While considering the controversy between the parties, the doctrine of pith and substance in interpreting the entries of the Seventh Schedule of the Constitution as well as the aspect theory as referred to by the learned senior counsel and learned counsel who have appeared for the respective parties shall be dealt with. 2. 2.

Since the fields of legislation are in the Seventh Schedule to the Constitution of India and would be referred to during the course of discussion primarily in List I and List II (Union List and State List respectively) in these cases, it shall be understood that any reference to these Lists is only with reference to the Seventh Schedule to the Constitution of India. 2232 Facts in brief: 3. For the sake of convenience, some of the relevant facts are delineated in the form of a table which is as under: Impugned S. No. Case No. Cause Title Name of enactment order dated 1. C. A. No. State of Kerala The Kerala Tax on 9301/2013 Versus Asianet Luxuries Act,1976 Arising out of Satellite 28. 06. 2012 SLP(C) No. Communications 17573/2013 Ltd. 2. C. A. No. Tata Sky Limited Uttarakhand 1629/2020 Versus State of (Uttar Pradesh Arising out of Uttarakhand Entertainment and 26. 07. 2010 SLP(C) No. Betting Tax Act, 1979) 1173/2011 (Amendment) Act, 2009 3. C. A. Nos. M/s. Tata Sky Rajasthan 1765- Ltd.

Versus State Entertainments & 1766/2020 of Rajasthan Advertisements Arising out Tax Act, 19. 08. 2014 of SLP(C) and Rajasthan Nos. 34237 - Entertainments & 34238/2014 Advertisements Tax Rules, 1957 4. C. A. No. Sun Direct TV Gujarat Entertainment 1531/2020 Pvt. Ltd. Versus Tax (Amendment) Arising out of State of Gujarat Act, 2009 and Gujarat SLP(C) No. Entertainment Tax 12. 03. 2015 17300/2015 (Exhibition by means of Direct-to-Home (DTH) Broadcasting Services) Rules, 2010 5. C. A. No. Dish TV India Gujarat Entertainment 1533/2020 Ltd. Versus State Tax (Amendment) Arising out of of Gujarat Act, 2009 and Gujarat SLP(C) No. Entertainment Tax 12. 03. 2015 22171/2015 (Exhibition by means of Direct-to-Home (DTH) Broadcasting Services) Rules, 2010 State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others Impugned S. No. Case No. Cause Title Name of enactment order dated 6. C. A. No. Bharat Business Gujarat Entertainment 1534/2020 Channel Ltd.

Tax (Amendment) Arising out of (Now Known as Act, 2009 and Gujarat SLP(C) No. Videocon D2H Entertainment Tax 12. 03. 2015 20511/2015 Ltd. ) Versus (Exhibition by means of State of Gujarat Direct-to-Home (DTH) Broadcasting Services) Rules, 2010 7. C. A. No. Bharti Telemedia Jharkhand 1752/2020 Ltd. Versus State Entertainment Tax Act, Arising out of of Jharkhand 30. 01. 2014 2012 SLP(C) No. 4855/2014 8. C. A. No. Tata Play Limited Jharkhand 1753/2020 Versus State of Entertainment Tax Act, Arising out of Jharkhand 30. 01. 2014 2012 SLP(C) No. 6690/2014 9. C. A. No. Reliance Big TV Jharkhand 1755/2020 Ltd. Versus State Entertainment Tax Act, Arising out of of Jharkhand 30. 01. 2014 2012 SLP(C) No. 8421/2014 10. W. P. (C) No. Tata Play Ltd. Section 65(105) (zk) 699/2014 Versus Union of and Section 65(15) of India Finance Act, 1994 11. C. A. No. Bharati Gujarat Entertainment 1532/2020 Telemedia Ltd. Tax (Amendment) Arising out of Versus State of Act, 2009 and Gujarat SLP(C) No.

Gujarat Entertainment Tax 12. 03. 2015 18164/2015 (Exhibition by means of Direct-to-Home (DTH) Broadcasting Services) Rules, 2010 12. C. A. No. IndusInd Uttar Pradesh 1687/2020 Media and Entertainments and Arising out of Communications Betting Tax Act, 1979 SLP(C) No. Ltd. Versus State and Uttar Pradesh 19. 04. 2018 11304/2018 of Uttar Pradesh Entertainments and Betting Tax (Amendment) Ordinance, 2009 2234 Impugned S. No. Case No. Cause Title Name of enactment order dated 13. C. A. No. MultiTech Digital Uttar Pradesh 1688/2020 Services Pvt. Entertainments and Arising out of Ltd. Versus State Betting Tax Act, 1979 SLP(C) No. of Uttar Pradesh 09. 04. 2018 and Uttar Pradesh 13949/2018 Entertainments and Betting Tax (Amendment) Ordinance, 2009 14. C. A. No. Siti Networks Uttar Pradesh 1689/2020 Limited Versus Entertainments and Arising out of State of Uttar Betting Tax Act, 1979 SLP(C) No. Pradesh and Uttar Pradesh 09. 04.

2018 14077/2018 Entertainments and Betting Tax (Amendment) Ordinance, 2009 15. C. A. No. Bling Ice Uttar Pradesh 1690/2020 Network Pvt. Ltd. Entertainments and Arising out of Versus State of Betting Tax Act, 1979 SLP(C) No. Uttar Pradesh and Uttar Pradesh 09. 04. 2018 22181/2018 Entertainments and Betting Tax (Amendment) Ordinance, 2009 16. C. A. Nos. Mansion Cable Uttar Pradesh 1548- Networks Private Entertainments and 1549/2020 Limited Versus Betting Tax Act, 1979 Arising out State of Uttar and Uttar Pradesh 09. 04. 2018 of SLP(C) Pradesh Entertainments No. 4233 - and Betting Tax 4234/2020 (Amendment) Ordinance, 2009 17. C. A. No. of Subhash Chand Uttar Pradesh 2025 Versus State of Entertainments and Arising out of U. P. Betting Tax Act, 1979 SLP(C) No. and Uttar Pradesh 11. 04. 2018 9025/2023 Entertainments and Betting Tax (Amendment) Ordinance, 2009 State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others Impugned S. No. Case No.

Cause Title Name of enactment order dated 18. C. A. No. Dish TV India Uttarakhand (Uttar 1630/2020 Ltd. Versus State Pradesh Entertainment Arising out of of Uttarakhand 26. 07. 2010 and Betting Tax Act, SLP(C) No. 1979) (Amendment) 1185/2011 Act, 2009 19. C. A. No. Bharti Telemedia Punjab Entertainment 1726/2020 Ltd. Versus State Duty Act 1955 (as Arising out of of Punjab 25. 10. 2010 amended in 2010) SLP(C) No. 4755/2011 20. C. A. No. M/s Tata Sky Ltd Punjab Entertainment 1725/2020 Versus State of Duty Act 1955 (as Arising out of Punjab 25. 10. 2010 amended in 2010) SLP(C) No. 13448/2011 21. C. A. No. Tata Play Ltd. The Delhi 10114/2011 Versus Govt. of Entertainments and Arising out of NCT of Delhi Betting Tax Act, SLP(C) No. 1996 and the Delhi 05. 09. 2011 28836/2011 Entertainments and Betting Tax (Amendment) Rules, 2010 22. C. A. No. Bharti Telemedia The Delhi 2147/2012 Ltd. Versus Entertainments and Arising out of Government of Betting Tax Act, SLP(C) No.

NCT of Delhi 1996 and the Delhi 05. 09. 2011 265/2012 Entertainments and Betting Tax (Amendment) Rules, 2010 23. C. A. No. Tata Sky Ltd. The Assam 1543/2020 Versus State of Amusement and Arising out of Assam Betting Tax Act, 1939 22. 02. 2012 SLP(C) No. and Rules 9 and 9A 18256/2012 of the Rules framed thereunder 24. C. A. No. Bharati The Assam 1547/2020 Telemedia Ltd. Amusement and Arising out of Versus State of Betting Tax Act, 1939 22. 02. 2012 SLP(C) No. Assam and Rules 9 and 9A 18766/2012 of the Rules framed thereunder 2236 Impugned S. No. Case No. Cause Title Name of enactment order dated 25. C. A. No. Tata Sky Ltd. Uttar Pradesh 1680/2020 Versus State of Entertainments and Arising out of Uttar Pradesh Betting Tax Act, 1979 SLP(C) No. and Uttar Pradesh 20. 07. 2012 28058/2012 Entertainments and Betting Tax (Amendment) Ordinance, 2009 26. C. A. No. Dish T. V India Jharkhand 1754/2020 Ltd. Versus State Entertainment Tax Act, Arising out of of Jharkhand 30. 01. 2014 2012 SLP(C) No.

7100/2014 27. C. A. No. Dish TV India Jharkhand 1756/2020 Ltd. Versus State Entertainment Tax Act, Arising out of of Jharkhand 30. 01. 2014 2012 SLP(C) No. 10192/2014 28. C. A. No. Tata Play Limited Gujarat Entertainment 1530/2020 Versus State of Tax (Amendment) Arising out of Gujarat Act, 2009 and Gujarat SLP(C) No. Entertainment Tax 12. 03. 2015 17005/2015 (Exhibition by means of Direct-to-Home (DTH) Broadcasting Services) Rules, 2010 29. W. P. (C) No. Tata Play Limited 748/2015 Versus Union of India 30. C. A. No. Bharati Uttarakhand (Uttar 1628/2020 Telemedia Ltd. Pradesh Entertainment Arising out of Versus State of 26. 07. 2010 and Betting Tax Act, SLP(C) No. Uttarakhand 1979) (Amendment) 1182/2011 Act, 2009 31. C. A. No. Dish TV India The Delhi 5867/2012 Limited Versus Entertainments and Arising out of Government of Betting Tax Act, SLP(C) No. NCT of Delhi 1996 and the Delhi 05. 09. 2011 16255/2012 Entertainments and Betting Tax (Amendment) Rules, 2010 State of Kerala & Another v.

Asianet Satellite Communications Ltd. & Others Impugned S. No. Case No. Cause Title Name of enactment order dated 32. C. A. No. Dish TV India The Delhi 5228/2012 Ltd. Versus Entertainments and Arising out of Government of Betting Tax Act, SLP(C) No. NCT of Delhi 1996 and the Delhi 05. 09. 2011 20902/2012 Entertainments and Betting Tax (Amendment) Rules, 2010 33. C. A. No. Tata Play Ltd. The Orissa 1535/2020 Versus State of Entertainment Tax Arising out of Orissa Act, 2006 and Orissa SLP(C) No. Entertainment Tax 23533/2012 24. 04. 2012 (Amendment) Act, 2010 along with the Orissa Entertainment Tax (Amendment) Rules, 2010 34. C. A. No. Tata Sky Limited. Uttar Pradesh 1679/2020 Versus State of Entertainments and Arising out of Uttar Pradesh Betting Tax Act, 1979 SLP(C) No. and Uttar Pradesh 20. 07. 2012 31532/2012 Entertainments and Betting Tax (Amendment) Ordinance, 2009 35. C. A. Nos. New Era Uttar Pradesh 1681- Entertainment Entertainments and 1682/2020 Network Ltd.

Betting Tax Act, 1979 Arising out of Versus State of and Uttar Pradesh 20. 07. 2012 SLP(C) Nos. Uttar Pradesh Entertainments 29366 - and Betting Tax 29367 /2012 (Amendment) Ordinance, 2009 36. C. A. No. Independent T. V. Uttar Pradesh 1683/2020 Ltd. Versus State Entertainments and Arising out of of Uttar Pradesh Betting Tax Act, 1979 SLP(C) No. and Uttar Pradesh 20. 07. 2012 31096/2012 Entertainments and Betting Tax (Amendment) Ordinance, 2009 2238 Impugned S. No. Case No. Cause Title Name of enactment order dated 37. C. A. No. Bharti Telemedia Uttar Pradesh 1684/2020 Ltd. Versus State Entertainments and Arising out of of Uttar Pradesh Betting Tax Act, 1979 SLP(C) No. and Uttar Pradesh 20. 07. 2012 31416/2012 Entertainments and Betting Tax (Amendment) Ordinance, 2009 38. C. A. No. Bharati Uttar Pradesh 1685/2020 Telemedia Ltd. Entertainments and Arising out of Versus State of Betting Tax Act, 1979 SLP(C) No. Uttar Pradesh and Uttar Pradesh 20. 07.

2012 31342/2012 Entertainments and Betting Tax (Amendment) Ordinance, 2009 39. C. A. No. Sun Direct TV Uttar Pradesh 1686/2020 Pvt. Ltd. Versus Entertainments and Arising out of State of Uttar Betting Tax Act, 1979 SLP(C) No. Pradesh and Uttar Pradesh 20. 07. 2012 32123/2012 Entertainments and Betting Tax (Amendment) Ordinance, 2009 40. C. A. No. Tata Sky Limited The Tamil Nadu 1580/2020 Versus The State Entertainments Arising out of of Tamil Nadu Tax Act, 1939 as SLP(C) No. amended by Tamil 19. 10. 2012 10555/2013 Nadu Entertainments Tax (Second Amendment) Act, 2011 41. C. A. Nos. Bharati The Tamil Nadu 1581- Telemedia Ltd. Entertainments 1583/2020 Versus Union of Tax Act, 1939 as Arising out India amended by Tamil 19. 10. 2012 of SLP(C) Nadu Entertainments Nos. 10658 - Tax (Second 10660 /2013 Amendment) Act, 2011 State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others Impugned S. No. Case No. Cause Title Name of enactment order dated 42. C. A. No.

Bharti Telemedia The Orissa 1536/2020 Ltd. Versus State Entertainment Tax Arising out of of Orissa Act, 2006 and Orissa SLP(C) No. Entertainment Tax 12692/2013 14. 11. 2012 (Amendment) Act, 2010 along with the Orissa Entertainment Tax (Amendment) Rules, 2010 3. 1 From the above table, it is evident that most of the Civil Appeals have been filed by the assessees while Civil Appeal No. 9301 of 2013 has been filed by the State of Kerala assailing the judgment of the said High Court dated 28. 06. 2012. 3. 2 The Civil Appeals have been filed by the assessees assailing the orders passed by the High Courts referred to above dismissing the writ petitions while the State of Kerala has filed its appeal being aggrieved by some of the findings arrived at by the Kerala High Court in the context of Article 14 of the Constitution vis-à- vis the plea regarding discrimination raised by the respondents in the said Appeal. 3.

3 The bird's eye view of the orders and judgements passed by the Eleven High Courts referred to above can be gleaned as under: 3. 3. 1The High Court of Uttarakhand by way of impugned judgment dated 26. 07. 2010 passed in Tata Sky Limited vs. State of Uttarakhand, Writ Petition (M/B) No. 4 of 2010 held that amendments to Uttar Pradesh Entertainment and Betting Tax, 1979 levying entertainment tax on DTH services was fully within the legislative competence of the State and did not encroach upon the field which the Parliament exclusively has authority to legislate. Relying on the judgment of this Court in State of West Bengal vs. Purvi Communication Pvt. Ltd. , (2005) 3 SCC 711 ("Purvi Communication"), it was observed that the activity carried on by petitioners therein was not different from that carried out by cable operators in Purvi 2240 Communication.

To explain the distinctions between the imposition of service tax and entertainments tax the High Court noted that the 'incidence' of service tax is on the license agreement obtained from the Ministry of Information and Broadcasting whereas the 'incidence' for the levy of entertainment tax is based on the individual contracts executed by the petitioner with its customers. 3. 3. 2Similarly, the High Court of Punjab and Haryana High Court in the impugned judgment dated 25. 10. 2010 held that the levy of entertainment duty falls under Entry 62 - List II which operates in a completely different field from Entry 92C - List I. Affirming the application of aspect theory to the present facts, it was observed that levies of service tax and entertainment tax can co-exist and can be harmonized as they concern different aspects.

Therefore, the High Court upheld the vires of the Punjab Entertainment Duty Act, 1955, as amended in 2010, which levied entertainment duty on DTH services and dismissed the petition. 3. 3. 3The impugned judgment dated 05. 09. 2011 of the Delhi High Court passed in Bharti Telemedia Ltd. vs. Government of NCT of Delhi, W. P. (C) No. 4935/2011 applied aspects theory to the facts in hand and held that the State legislature is competent to levy an entertainment tax on all payments for admission through DTH. It was observed that the transaction in question has an aspect of service which is amenable to service tax and an aspect of entertainment which is amenable to entertainment tax. The writ petitions were dismissed and challenge to Section 7 of the Delhi Entertainments and Betting Tax Act, 1996 was rejected. 3. 3. 4Subsequently, Gauhati High Court at Guwahati vide impugned judgment dated 22. 02.

2012 dismissed the petitions challenging the relevant provisions of Assam Amusement and Betting Tax Act, 1939 in terms of the judgments of the Uttarakhand High Court dated 26. 07. 2010 and Punjab and Haryana High Court dated 25. 10. 2010. The Gauhati High Court was of the view that State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others the issues raised were already covered by the aforesaid judgments. 3. 3. 5By way of impugned order dated 24. 04. 2012, the High Court of Orissa at Cuttack dismissed the writ petition being M/s. Tata Sky Ltd. vs. State of Orissa, Writ Petition (C) No. 8966 of 2011, and held that the aforesaid decision of the Punjab and Haryana High Court dated 25. 10. 2010 was squarely applicable to the facts before it. 3. 3. 6The High Court of Judicature at Allahabad also dismissed the writ petition preferred before it vide impugned judgment dated 20. 07. 2012.

The High Court thought it fit to respect the broad latitude given to legislature in fiscal legislation and thereby rejected the argument that the rate of entertainment was discriminatory in comparison with cable operators. It also agreed with the findings of the Delhi High Court on the application of aspect theory. In the present batch of petitions, subsequent orders of the Allahabad High Court dated 09. 04. 2018, 11. 04. 2019 and 19. 04. 2018 are also challenged. These orders which were passed in terms of the impugned judgment dated 20. 07. 2012 are also challenged. 3. 3. 7On 19. 10. 2012, the High Court of Judicature at Madras vide its order and judgment impugned herein held, in principle, that there could be a levy of entertainment tax on entertainment received through DTH services and the pith and substance of the levy contemplated under Entry 62 - List II is a levy on 'entertainment' in contradistinction to service tax levy on providing of service.

The High Court also rejected the argument that Entry 62 - List II only refers to public entertainment and not entertainment through DTH vis-à-vis public entertainment. However, in the specific facts and circumstances, the High Court also held that the impugned charging provision i. e. Section 4-I of the Tamil Nadu Entertainments Tax Act, 1939 is inadequate due to no explicitly mention of the chargeable event and incidence of tax. Therefore, the writ petitions challenging the levy of entertainment tax were allowed. In so far as the matters arising from Madras High Court 2242 are concerned, the questions with regard to legislative competence under Entry 62 - List I and whether DTH services were exclusively within Entry 92C/97 - List I are considered in these appeals. Further, the correctness of the findings of the High Court with regard to the charging section being defective is assailed by the State of Tamil Nadu in separate appeals which are not part of this batch of appeals. 3. 3.

8The High Court of Jharkhand at Ranchi vide impugned judgment dated 30. 01. 2014 held that the Jharkhand Entertainment Tax Act, 2012 levying tax on "entertainment" through DTH, in pith and substance, is on entertainment which falls under Entry 62 - List II. According to the High Court, the aforesaid levy is distinguished from tax on "broadcasting service" under Entry 62 - List II. Having found the State Legislature competent to levy such "entertainment tax" the High Court dismissed all the writ petitions. 3. 3. 9Impugned order dated 19. 08. 2014 passed by Rajasthan High Court conducted a survey of the extant judgments of different High Courts on the issues raised and of Purvi Communication. Finally, the High Court dismissed all three writ petitions by way of the impugned order. 3. 3.

10Soon thereafter, the High Court of Gujarat at Ahmedabad by way of impugned judgment dismissed the challenge to the Gujarat Entertainment Tax (Exhibition by means of DTH Broadcasting) Rules, 2010 for similar reasons as other High Courts. The Gujarat High Court relied on Aspect Theory to dissect the two taxable events herein, firstly, the service of enabling flow of content and secondly, entertainment from content. 3. 3. 11 Finally, vide Impugned judgment dated 28. 06. 2012, the Kerala High Court allowed WP(C) No. 33966 of 2006 (R) on the ground that the provisions of the impugned Act were discriminatory inasmuch as they authorized levy and collection of luxury tax on cable TV operators including petitioners only with connections of 7500 or above as discriminatory. According to the High Court, State of Kerala & Another v. Asianet Satellite Communications Ltd.

& Others there could be no reasonable classification between cable TV operators with connections below 7500 and cable TV operators with connections above 7500 with reference to object of legislation. Writ Petitions filed before this Court: W. P. (C) No. 699/2014: 3. 4 W. P. (C) No. 699/2014 has been preferred by the petitioner Tata Sky Ltd. (now Tata Play Ltd. ) challenging the constitutional validity of Section 65 (105) (zk) read with Section 65(15) of the Finance Act, 1994, which impose service tax on the provision of "Direct to Home" ("DTH") broadcast facility provided by the petitioner to its subscribers. In short, the petitioner's case is that the entire operation carried on by the petitioner is one single operation and since only service tax is being imposed on this activity, the petitioner has been paying service tax on this activity since the year 2006. However, later the Jharkhand Entertainment Tax Act, 2012 (Act. No.

13 of 2012) came into force taxing, inter alia, the activity of the petitioners as an entertainment. As a challenge to the legality of this imposition has been rejected by the High Court of Jharkhand at Ranchi and several other High Courts, which is now before this Court, this writ petition has been preferred contending that once an activity is found to be subject of an enactment under Entry 62 - List II, the same cannot also be subject to service tax, which is imposed taking strength from Entry 97 - List I. Therefore, it is prayed that this Court may declare unconstitutional the imposition of service tax on the petitioner's activity. In the alternative, it is prayed that this Court may declare that the activity of broadcasting does not constitute providing entertainment and is thereby amenable to service tax.

The prayers sought for in this writ petition read as under: "a) Declare that Section 65 (105) (zk) and Section 65(15) of the Finance Act, 1994, insofar as they purport to impose a tax on the "Direct to Home" activity provided by the Petitioner, are lacking in legislative competence and are thereby unconstitutional; 2244 b) Issue a writ of mandamus and/or such other appropriate writ, order or directing Respondent No. 1, the Union of India, to pay to the various States, which seek to collect tax by way of entertainment tax, the amount collected by them towards service tax in discharge of the Petitioner's liability towards entertainment tax; c) In the alternative, declare that the activity of broadcasting does not constitute providing entertainment and is thereby amenable to service tax, and a tax by the States on such activity under Entry 62, List II, Sch.

7 of the Constitution of India is lacking in legislative competence; d) If prayer (c) above is allowed, then issue a writ of mandamus and/or such other appropriate writ, order or directing the Respondent States which collect tax by way of entertainment tax, to pay over the tax collected by them towards entertainment tax on the service provided by the Petitioner to the Union of India in discharge of the Petitioner's liability towards service tax. e) Pass such other orders as this Hon'ble Court may deem fit and proper in the interest of justice. " W. P. (C) No. 748/2015: 3. 5 The issues raised in W. P. (C) No. 748/2015 are similar to W. P. (C) No. 699/2014 inasmuch as the petitioner, M/s Tata Play Ltd. , challenges the constitutional validity of Section 65 (105) (zk) read with Section 65(15) of the Finance Act, 1994, which imposes service tax on the provision of DTH broadcast facility provided by the petitioner to its subscribers.

Petitioner also challenges the constitutional validity of Sections 3(10), 3(11) and Section 15A of the Andhra Pradesh Entertainment Tax Act, 1939, and the Assessment Order RC No. A2/424/2014-15 (ET) dated 27. 08. 2015 issued by the Government of Telangana, Commercial Taxes Department for FY 2011-22, 2012-13 and 2013-14. After re-organization, the State of Telangana adopted State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others the aforementioned Act. The petitioner's principal contention is that the petitioner cannot be burdened with imposition of 'service tax' and 'entertainment tax' on the same taxable event i. e. 'transmission of signals'. It is also contended that the petitioner as a DTH operator does not fall within the ambit of a 'Master Cable Operator' within the meaning of the state enactment and therefore no entertainment tax can be levied on the petitioner's activity.

Furthermore, it is argued that the State of Telangana cannot seek to levy Entertainment Tax for the period prior to the existence of the State of Telangana especially for the areas which now form part of the Andhra Pradesh. The prayers sought for in this writ petition read as under: "(A) Issue an appropriate writ, order or direction declaring Section 65 (105) (zk) r/w Section 65(14) of the Finance Act, 1994 insofar as they purport to impose a tax on the "Direct to Home" activity provided by the Petitioner, as lacking legislative competence and thereby unconstitutional; (B) In the alternative, declare that the activity of broadcasting does not constitute providing entertainment and is thereby amenable to service tax and a tax by the States on such activity under Entry 62, List II, Schedule 7 of the Constitution of India is.

lacking in legislative competence; (C) Issue an appropriate Writ, Order or direction, declaring the Section 3(10), 3(11) and Section 15 A of the Andhra Pradesh Entertainment Tax Act as adopted by the State of Telangana, in so far as it purports to impose a tax on the activities carried on by the Petitioner as lacking legislative competence; (D) Issue a Writ of certiorari or any other writ, order or direction setting aside the Assessment Order (Rc. No. A2/ 424/2014-2015 (ET) dated 27. 08. 2015 (received by the Petitioner on 07. 09. 2015) issued by Respondent No. 3 as illegal, and having been issued without the authority of law; (E) Pass such other orders as this Hon'ble Court may deem fit and proper in the interest of justice. " 2246 Submissions: 4.

We have heard learned senior counsel and learned counsel appearing for the respective assessees/appellants herein and learned senior counsel and learned counsel for the respective State as well as learned senior counsel appearing for the Union of India at length and on several dates. Submissions on behalf of Appellants: 4. 1 Learned senior advocate, Sri Datar, appearing on behalf of the appellant in C. A. No. 2147/2012, drew our attention to the conscious use of the word 'entertainments' in Entry 62 - List II. It was contended that the word 'entertainments' is not the plural of 'entertainment' but is nomen juris. This line of argument was advanced to contend that the State cannot expand its taxing power by including DTH services within the meaning of the word "entertainments". To buttress his submission, he took us through the consistent use of the word 'entertainments' from the year 1622 onwards in British legislation.

It was his argument that this consistent usage reflects the continuing and underlying intention of constitutional makers for 'entertainments' to mean only public entertainment to the exclusion of private entertainment. Reliance in this regard was also placed on Cantonment Board Poona vs. Western India Theatres Ltd. , AIR 1954 BOM 261, wherein the Bombay High Court held that 'entertainments' is used as a common noun and is to mean 'entertainments in public'. 4. 2 Sri Datar also argued that Entry 31 - List I refers to 'communication' and 'broadcasting'. Therefore, even in the absence of an express entry taxing telecommunication or broadcasting, it was contended that these are "services" and can be taxed only by the Union, even if used for television channels. As "broadcasting service" includes DTH service, the States do not have the competence to tax the same service.

He also drew our attention to the omission of Section 129 of the Government of India Act, 1935 that permitted imposing of fees on construction, use of transmitters, and use of receiving apparatus. This was contended in light of the fact that DTH operators use an apparatus to receive signals and further decode them. State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others 4. 3 It was further contended that vide Circular No. 61/10/2003-ST dated 14. 07. 2003, the Ministry of Finance directed Doordarshan and All India Radio to pay service tax as a provider of broadcasting services. It was therefore contended that, even if there is any entertainment through Doordarshan and All India Radio, it has always been treated as part of broadcasting service. By way of analogy, it was argued that Radio Tax was also levied by the Post and Telegraph Department even though radio provided entertainment.

It was put forth that while Entry 31 - List I covers broadcasting and "other like forms of communication", Entry 13 - List II applies to communications not specified in List I (which actually concerns surface transport). 4. 4 Our attention was also drawn to Entry 92C - List I of the Constitution, which was inserted but not notified. Relying on a judgment of the Constitution Bench of this Court in State of Kerala vs. Mar Appraem Kuri Company Ltd. , (2012) 7 SCC 106, Sri Datar argued that the subject service tax is within the exclusive domain of Parliament even though Entry 92C was not notified. Therefore, it was contended that under Article 246(1) read with Article 248, only Parliament can levy tax on any kind of services after the insertion of Entry 92C. 4.

5 Furthermore, Sri Datar highlighted that, even the Negative List under Section 66D of the Finance Act, 1994 in the service tax regime also specifically excludes tax on entertainments, which, according to him, means only public entertainments. Therefore, it was contended that entertainments in public places, theatres, etc. will be subject to State taxes; whereas the same cinema shown on a personal device or on DTH/Cable TV can be taxed only by the Centre as being part of broadcasting service. 4. 6 It was also contended by Sri Datar that all the impugned enactments passed by States have merely included "DTH Services" or broadcasting service as part of the definition of entertainment and therefore the tax is levied on the service itself and not on the entertainment, particularly because the entire value is taxed. 4.

7 On the application of aspect theory, learned senior counsel Sri Datar's categorical argument was that "Double Aspect" theory only comes into play when both the Union and States 2248 have legislative competence. However, as Parliament in 2001 declared its intent to tax DTH services, the aspect theory will have no application here. 4. 8 Furthermore, on the relevancy of Purvi Communication to the matter at hand, it was pointed out by Sri Datar that while Parliament levied a tax in the year 2001, the judgment in Purvi Communication was pronounced in 2005 and has not noted the legislative history of entertainments and also did not refer to any entries pertaining to broadcasting or communications. 4.

9 As an argument in the alternative, it was contended that even if the aspect theory was to apply, the impugned enactments are liable to be struck down as they ignore that in all composite transaction with different aspects, the legislature provides for bifurcation; however, herein the State legislatures have not provided for computation of the value attributable to entertainment. Only the States of Delhi and Assam have not levied entertainment tax on the gross consideration. It was contended that taxation on gross value is prohibited in law and the value of entertainment cannot be included in the value of service and vice-a-versa, vide Bharat Sanchar Nigam Limited vs. Union of India, (2006) 3 SCC 1 ("Bharat Sanchar Nigam Limited"); K. Damodarasamy Naidu & Bros. vs. State of Tamil Nadu, (2000) 1 SCC 521. 4.

10 In that context, it was also argued that where the services are availed by the weaker section of the society as well, an interpretation that avoids double taxation should be preferred. 4. 11 Sri S. K. Bagaria, learned senior counsel appearing on behalf of the appellant in Civil Appeal No. 1680 of 2020 and Writ Petition (Civil) No. 699 of 2014, contended that the activity of the appellants herein is primarily broadcasting and has been treated and taxed as such under the statutes enacted by the Parliament. To show that the entire field of DTH services is occupied by the Central Government, Sri Bagaria drew our attention to the order dated 15. 03. 2001 of the Ministry of Information and Broadcasting, Government of India, by which DTH broadcasting was permitted in India. 4. 12 According to Sri Bagaria, the fact that neither Entry 62 - List II nor any other entry in the State List explicitly mentions taxes State of Kerala & Another v. Asianet Satellite Communications Ltd.

& Others on broadcasting shows that any and all taxes on broadcasting can be imposed exclusively by the Parliament. Reliance in that regard was placed on Article 248(2) of the Constitution which provides for the Parliament to make any law imposing a tax not mentioned either in the Concurrent list or in the State list. Reliance was placed on the dictum of this Court in Association of Leasing & Financial Service Companies vs. Union of India, (2011) 2 SCC 352. 4. 13 It was sought to be advanced that the question before this Court was not merely regarding the scope of taxes on entertainments but also about the conspicuous absence of taxes on broadcasting in Entry 62 - List II. In other words, the question is whether the expression 'taxes on entertainments' can be construed so broadly as to include taxes on broadcasting within it.

The argument advanced was that even a reading of the entries in their widest amplitude would not enable the respondents to read into the entry a subject not covered by it. Succinctly stated, the argument of Sri Bagaria is that giving such a wide interpretation to Entry 62 - List II will nullify Parliament's power and legislative competence to levy taxes on broadcasting service as there can be no overlapping in the field of taxation. 4. 14 While Entry 31 - List I is undisputedly acknowledged as a regulatory entry, it was also argued that a construction as argued by the appellants will also be fully in line with the structure of the constitutional scheme, especially that of the Seventh Schedule. As broadcasting and other like forms of communication are covered by Entry 31 - List I and service tax on broadcasting is imposed under Entry 97 - List I, it was argued that there is a discernible constitutional scheme which necessitates the widest possible construction of Entry 31- List I.

Additionally, it was advanced that the State List has no mention of broadcasting and other like forms of communication or taxes on broadcasting whereas State List does have regulatory entries in the form of Entry 33 - List II concerning sports, entertainments and amusements, and in the form of Entry 34 - List II for betting and gambling. Thus, Entry 62 - List II relates to taxes on luxuries, including taxes on entertainments, amusements, betting and gambling. 2250 4. 15 Sri Bagaria, learned senior counsel, placed significant reliance on the scheme of regulation and definition of broadcasting by Parliamentary statutes and orders.

It was argued that the entire contour of broadcasting is a subject matter of parliamentary enactments and, therefore, as all forms, types and varieties of broadcasting are covered by Parliamentary Law, it is evident that every facet of regulation of broadcasting is subsumed under Entry 31 - List I and the taxing power for broadcasting is under Entry 97 - List I. Highlighting the importance of broadcasting, it was also argued that broadcasting and other forms of communication are subjects of national importance which were intended by the constitutional framers to be regulated and taxed by the Central Government only. It is the case of the appellants that upholding such an interpretation of Entry 62 - List II would be to truly and correctly reconcile the same with other entries in List I. According to the appellants, the constitutional scheme is with respect to all forms, types and contents of broadcasting.

The consequences and effects of broadcasting are not the same thing as legislative subject matter and, consequently, all forms and attributes of broadcasting also fall within List I. It is Sri Bagaria's argument that tax is sought to be levied merely with reference to the entertainment - causing attribute of broadcasting and is, therefore, impermissible in law. 4. 16 Reliance was placed on the judgment of this Court in Special Reference No. 1 of 2001, In Re: Association of Natural Gas vs. Union of India, (2004) 4 SCC 489, wherein the validity of Gujarat Gas (Regulation of Transmission, Supply and Distribution) Act, 2001 was challenged before the Constitution Bench.

The issue before the Court was whether the State had legislative competence to make laws on natural gas and liquefied natural gas under Entry 25 - List II, "Gas and Gasworks" or whether the Parliament was competent to make laws under Entry 53 - List I, "Regulation and development of oilfields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable". While the State of Gujarat argued that Entry 25 - List II must be given the widest possible interpretation and that it includes all types of gases State of Kerala & Another v. Asianet Satellite Communications Ltd. & Others especially when there are no words of limitation in the entry itself, this Court considered the consistent legislative practice in various legislations to hold that the term "petroleum" or "petroleum products" has been given a wide meaning to include within itself natural gas and other similar products.

Sri Bagaria, learned senior counsel, contended that similarly, central legislations passed by Parliament over several decades included within "broadcasting" any form of communication like signals, images, sounds of all kinds by transmission of electromagnetic waves irrespective of the contents and their natures or types. It was further contended that this reading will not make Entry 62 - List II a "useless lumber" because any or all forms of broadcasting was never intended to be covered by the expression "entertainments". 4. 17 It was categorically argued that the aspect theory has no application to the activity at hand as the activity of broadcasting is taxed by the Parliament and the state legislatures have no legislative competence to tax the same under Entry 62 - List II as tax on 'entertainments'. Sri Bagaria would argue that even in Federation of Hotel & Restaurant Association of India vs.

Union of India, (1989) 3 SCC 634 ("Federation of Hotel & Restaurant Association of India") this Court rejected the challenge to the central statute impugned therein as it found that the subject matter of the impugned statute was in pith and substance a tax on expenditure and not on luxuries or sale of goods. 4. 18 Sri Gulati, learned senior advocate, argued that at a foundational level, far from carrying out any activity of entertainment, the appellant only acts as a conduit in the entire process of transmission of signals to the subscriber of television channels. In this context, he outlined that appellants perceive the nature of their activity as follows: (i) entire activity of appellants is in relation to transmission of DTH signals; and (ii) neither do appellants exercise any control over the content received from the broadcaster nor do they control exhibition of the content. 2252 4.

19 It was contended that the said activity is aptly described as only rendering broadcasting service which was earlier amenable to service tax under Section 65(105)(zk) of the Finance Act, 1994 and was specifically expanded in 2005 to include DTH signals. That from the year 2007 onwards, the appellant was discharging service tax on the entire monthly subscription charges under 'broadcasting services' without charging any additional consideration for set-top boxes and dish antenna. It was argued that, in substance, this position continued even after the Negative List regime was brought about in 2012. 4. 20 Sri Gulati highlighted that States have enacted statutes under Entry 62 - List II intending to tax the very same activity as that of providing "broadcasting service", which is already amenable to service tax imposed by the Parliament. According to Sri Gulati, the provisions of various State enactments levying Entertainment tax can be categorized as follows: i.

Levy of tax is on admission to entertainment by way of a DTH connection; ii. Lev