The Hindu Business Line : Entertainment tax on amusement parks in TN is legal: HC

Chennai, Nov. 3 The Madras High Court has held that theme/amusement parks in the State were liable to pay entertainment tax on collections for entry of public. Their challenge to the TN Entertainment Tax Amendment Act 32 of 1998 and plea to declare it unconstitutional and ultra vires the TN Entertainment Tax Act of 1939 failed, the Court ruled.

Dismissing a batch of seven writ petitions from Black Thunder Theme Park Pvt Ltd and six other similar companies in Chennai, Mr Justice K. Chandru ruled that even a plain meaning of the Amendment Act would make it clear that the petitioners’ activities would be covered by the definition of the word ‘amusement’. Therefore, it was too late for the petitioners to challenge the levy of entertainment tax on them.

It was not open to the petitioners to contend that they were only providing facilities, and it could not be an ‘amusement’ coming under Entry 62 of List II of Schedule VII of the Constitution. More or less a similar contention, which had been raised in respect of entertainment tax on cinemas, was repelled by the Supreme Court in Y.V. Ramamurthy & Others vs State of Mysore & Another (AIR 1959 SC 894), the judge pointed out.

The petitioners, who were served with demand notices by commercial tax officers asking for the payment of entertainment tax, contended that since Entry 33 under List II of Schedule VII of the Constitution talked about sports, entertainments and amusements, the expressions ‘entertainment and amusement’ should be made separate and distinct. Disagreeing with the contention, the judge ruled that it was not open for the petitioners to contend that they were only providing facilities and it could not be an amusement coming under Entry 62.

By the Amendment Act 32 of 1998, Section 3(2A) was introduced into the Act defining the term ‘amusement’ as under: “‘amusement’ means any amusement for which persons are required to make payment for admission to any amusement arcade or amusement park or theme park or the like by whatever name called”.

In view of the above, the challenge to constitutional validity must fail, and accordingly, all the writ petitions would stand dismissed, the judge ruled.

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