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Judgment
CM No. 16141 of 2016 : Allowed, subject to all just exceptions.
W.P.(C) 3793 of 2016
Notice. Ms. Shyel Trehan, learned counsel accepts notice on behalf of Respondent No. 1/Union of India. Mr. Satish Kumar, Senior Standing Counsel accepts notice on behalf of Respondent Nos. 2 & 3 and Mr. Gautam Narayan, Additional Standing Counsel accepts notice on behalf of Respondent Nos. 4 & 5. List on 27th September, 2016.
CM No. 16140 of 2016 (Stay)
The submissions of Mr. Tarun Gualti, learned counsel for the Petitioner, Ms. Shyel Trehan, Mr. Satish Kumar, Senior Standing Counsel and Mr. Gautam Narayan, Additional Standing Counsel have been heard on the application of granting ad interim ex parte relief.
Inter alia, the grounds on which challenge is made to the levy of Service Tax on the Sale of Tickets for the Indian Premium League (IPL) Cricket Tournament, by virtue of the amendments to the Finance Act, 1994 by the 2015 with effect from 1st June, 2015 together with the Service Tax Notification No. 06/2015, dated 1st March, 2015 and the Circular No. 334/5/2015-TRU, dated 28th February, 2015 is that the earlier negative list setting out items in respect of which Service Tax was not leviable was included �entertainment� which in terms of Section 10(j) (now omitted) included sporting events. It is further pointed out that under Section 2(i) of the Delhi Entertainments and Betting Tax Act, 1996 the expression �entertainment� includes �games, sport or race�. It is, therefore, contended that tax on entertainment, which the Petitioner is in any event paying, is within the exclusive domain of the State as per List II of the 7th Schedule to the Constitution. It is submitted that in respect of the same taxable event viz., there cannot be a levy of service tax by the Union on the Sale of Tickets and a levy of entertainment tax by the State. In short, the ground of challenge is legislative competence.
The other submission that in terms of the Agreement entered into between the Petitioner and the Board of Control for Cricket in India (BCCI) there is an obligation on the Petitioner to provide BCCI 20% free tickets in every category. It is submitted that the Petitioner should not be made liable to pay Service Tax on such �free tickets�.
As far as the second submission is concerned, it will require examination of the Agreement between the Petitioner and the BCCI in some detail. However, the Court finds that for the current IPL season, the Petitioner has already collected the Service Tax on the tickets sold. A sample of the tickets sold shown at Annexure-P-8 of the present petition. Having collected the Service Tax in terms of the impugned amendments in the Finance Act, 1994, there is an obligation on the Petitioner to deposit such Service Tax with the Central Government.
In the circumstances, the Court is of the view that the only interim order that can be passed at this stage, while reserving the rights and contentions of both the parties at the final hearing of the writ petition, is to direct that the Service Tax as collected and deposited by the Petitioner during the pendency of the present writ petition will be subject to the final outcome of the petition.
The application is disposed of.