Altamas Kabir, J.@mdashThe petitioner is a public limited liability company carrying on a hotelier business and is the owner of the Taj Bengal Hotel situated in Calcutta. The petitioner claims to have started a night club named "INCOGNITO" in or about the month of April, 1993. The night club has a bar with seating arrangement where food and drinks are served. It also has a dance floor where members and their guests dance to pre-recorded music. There is no live performance by singers, musicians or bandsman, nor is any exhibition, performance, amusement, game, sport, cabaret dance or floor-show provided. The night-club is not open to the public and only members and their guests and guests of the hotel can enter the night club. While the members pay an annual membership fee and guest charges for their guests, the guests of the hotel are not required to make any payment for visiting the night club.
2. The West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972, hereinafter referred to as "the 1972 Act", provides for imposition of tax on entertainments and luxuries in hotels and restaurants. Provision for air-conditioning being a luxury under the aforesaid Act, the petitioner-company is required to pay luxury tax u/s 4 of the Act in respect of the hotel and the restaurants therein, including the aforesaid night club.
3. Clause (b) of Section 2 of the 1972 Act, prior to its amendment by the West Bengal Finance Act, 1994, defined entertainment as follows :
" ''entertainment'' means any exhibition, performance, amusement, game, sport, cabaret dance or floor-show and includes performance by any singer, musician or bandsman provided in any hotel or restaurant."
After amendment, clause (b) of Section 2 of the 1972 Act reads as follows :
" ''entertainment'' means any exhibition, performance, amusement, game, sport, cabaret dance Or floor-show provided in any hotel or restaurant."
4. Section 3(1) of the 1972 Act provides that entertainment tax will be payable by every person who is admitted into or enters any place within an air-conditioned hotel or restaurant where entertainment is provided and that such tax is to be calculated at the rate of 30 per cent of the total sum paid or payable by such person for all services, including food and drink supplied to him and also including any fee for admission.
5. According to the petitioner, no entertainment within the meaning of Section 2(b) of the 1972 Act is provided in the aforesaid night club and only pre-recorded music is played and members or their guests dance to such much of their own volition. There is no performance by any singer, musician or bandsman which was covered by the pre-amended provisions of Section 2(b). After the amendment in 1994 even such live music performance was taken out of the purview of entertainment within the meaning of Section 2(b). It is the petitioner''s case that since no entertainment within the meaning of Section 2(b) was provided in the night-club, the petitioner could not and did not collect any tax u/s 3(1) of the 1972 Act from the members of the night-club or their guests.
6. It appears that inspite of the above, the Agricultural Income Tax Officer, Amusement Tax Section, Calcutta, the respondent No. 1 herein, passed assessment orders and demanded tax from the petitioner u/s 3(1) of the 1972 Act in respect of the membership fees and on the sale value of food and. drink in the night-club, together with interest thereon, for the period from 1993-94 onwards.
7. On receipt of such demand the petitioner by itself and through the Hotel and Restaurant Association of Eastern India, of which it is a member, made representations to the State Government at various levels and to the respondent-authorities. According to the petitioner, both the Association and the petitioner were assured that the matter was being examined and that in the meantime the demands would not be pursued by the respondent-authorities. It is the petitioner''s case that the respondent-authorities did not pursue the pending demands, but the repeated representations made by the petitioner and the association were not also disposed of.
8. Suddenly, however, on March 23, 2001, the petitioner received a letter dated March 22, 2001, from the Secretary, Finance Department (Taxation), referring to a judgment dated 23rd February, 2001, passed by the West Bengal Taxation Tribunal in the case of S.P. Jaiswal Estate Limited, and stating that in terms of the said judgment the petitioner was liable to pay tax u/s 3 of the 1972 Act and that it was required to clear its outstanding dues by March 31, 2001.
9. By reason of such communication the petitioner understood that its representations to the State Government on the above issue stood rejected and since the petitioner was of the view that the judgment in the S.P Jaiswal Estate Limited case had no application to the petitioner''s case, it filed an application before the West Bengal Taxation Tribunal u/s 8 of the West Bengal Taxation Tribunal Act, 1987, challenging the legality of the levy of entertainment tax in respect of its night-club and the orders of assessment and notices of demand relating thereto, including the aforesaid communication dated March 22, 2001. The said application was moved before the learned Tribunal on June 15, 2001, when on behalf of the respondents it was contended that the application was barred by limitation in terms of Sub-section (2) of Section 8 of the 1987 Act. On behalf of the petitioner it was submitted that since its representations were pending decision before the State Government and the same must be deemed to have been rejected after the decision of the Tribunal in the S.P. Jaiswal Estate Limited case, the delay in moving the Tribunal against the several assessment orders was liable to be condoned and the matter was required to be considered on merits.
10. By its order dated June 29, 2001, the learned Tribunal rejected the petitioner''s application on the ground of limitation. Aggrieved thereby, the petitioner-company has filed the present writ application.
11. Appearing in support of the writ application, Mr. R.N. Bajoria, learned Senior Counsel, submitted that the approach of the learned Tribunal to the question at issue was wholly erroneous as the petitioner''s challenge was in respect of the applicability of the provisions of Section 3 of the 1972 Act to the night-club run by the petitioner, which question was pending decision before the State Government and the concerned respondents and was not finally decided till the Tribunal''s decision in the S.P. Jaiswal Estate Limited case.
12. Mr. Bajoria submitted that by rejecting the petitioner''s application solely on the ground of limitation, the learned Tribunal had failed to exercise its jurisdiction judicially and if its order dated June 29, 2001, was allowed to stand, it would result in complete failure and gross miscarriage of justice.
13. Mr. Bajoria urged that the learned Tribunal had erred in proceeding on the premise that the petitioner merely wrote letters in respect of the several assessment orders and sat idle over the matter without exercising due diligence and approached the Tribunal after a lapse of nine years. Mr. Bajoria submitted that the Tribunal even failed to apply its mind to the fact that the first assessment in the petitioner''s case related to the period 1993-94 and was made by the respondent No. 1 on December 19, 1995, and immediately upon receipt of the said order on January 16, 1996, the petitioner made representations not only to the State Government, but also to the Commissioner of Agricultural Income Tax and Entertainment Tax. Thereafter, further representations were made as and when further assessment orders were served on the petitioner. Mr. Bajoria submitted that the Tribunal misappreciated the fact that the petitioner''s representations were left pending till the decision of the learned Tribunal in the case of S.P. Jaiswal Estate Limited in February, 2001, whereupon the respondents demanded from the petitioner the alleged dues u/s 3(1) of the 1972 Act for the period 1993-94 onwards.
14. Mr. Bajoria submitted that this was a fit case where the learned Tribunal should have exercised its jurisdiction in considering the legal question raised on behalf of the petitioner regarding the applicability of the 1972 Act to the petitioner''s night club.
15. Appearing for the respondents, Mr. Tarun Kumar Roy, learned advocate, strongly urged that since the High Court was not exercising appellate powers over the orders of the Tribunal but was only exercising powers of judicial review, the High Court could not substitute its own findings for that of the Tribunal which had exercised its discretion subjectively in holding that the petitioner''s application was barred by limitation.
16. Mr. Roy urged that apart from making representations, the petitioner had not pursued its statutory remedies. The same had been taken note of by the Tribunal in holding that the petitioner''s application was hopelessly barred by limitation.
17. In support of his submission Mr. Roy referred to and relied on the decision of the honourable Supreme Court in the case of
18. Mr. Roy urged that having regard to the above, the writ application was liable to be dismissed. In the alternative, Mr. Roy submitted that in the event the court was of the view that the matter required consideration on the merits, the petitioner should be directed to secure the entire dues of the Revenue in cash.
19. As will be evident from the order of the learned Tribunal impugned in the instant writ application, although, the factual aspect of the matter was recorded by the learned Tribunal, it disposed of the petitioner''s application on the question of limitation only. There is no denying the fact that instead of pursuing its statutory remedies against the assessment orders under the 1972 Act the petitioner moved the State Government by itself and through its Association along with others similarly placed. There is also no denying the fact that no steps were taken by the respondents to pursue the demands made on the basis of the orders of assessment from 1993-94 onwards till the decision of the Tribunal in the case of S.P. Jaiswal Estate Limited. In fact, the letter dated March 22, 2001, written by the respondent No. 3 which was the basis for the petitioner to move the learned Tribunal, referred to the petitioner''s representations on the question of levy of entertainment tax on night clubs (Incognito) and the decision of the Tribunal in the S.P. Jaiswal Estate Limited case, while requesting the petitioner in view of such decision to pay the outstanding dues amounting to Rs. 2,14,83,742.80 up to 1997-98 in respect of the petitioner''s night club, by March 31, 2001.
20. Although, not spelt out in the letter, it is clear that the petitioner''s representations to the State Government stood rejected on the basis of the said letter dated March 22, 2001, and a decision was taken to pursue the demands made in respect of the assessment orders for the period from 1993-94 to 1997-98.
21. In keeping with the observations made by the honourable Supreme Court in
22. We are of the view that since an important question of law is involved in the matter, the same should be considered and decided on the merits.
23. We, therefore, allow the writ petition in part and set aside the order passed by the learned Tribunal on June 29, 2001, dismissing the petitioner''s application on the ground of limitation and direct the learned Tribunal to hear out and decide the petitioner''s application being R.N. 245 of 2001, on the merits, as expeditiously as possible since the considerable amount of revenue is involved.
24. Subject to the petitioner-company depositing fifty per cent of the amount demanded in the letter of the respondent No. 3 dated March 22, 2001, with the respondent No. 1 within fifteen days from date, the respondents will remain restrained from realising the balance amount till the disposal of the application. There will be an unconditional order of injunction in the above terms for a period of fifteen days. In default of the petitioner depositing the aforesaid amount as directed within the period stipulated, the interim order shall stand vacated and the respondents will be entitled to proceed on the basis of the letter dated March 22, 2001, in accordance with law.
25. The respondents shall keep the amount as may be deposited by the petitioner in short term fixed deposits with a nationalised bank and keep the same renewed and in the event the petitioner''s application succeeds, the said amount with interest accrued thereon shall be paid by the respondent No. 1 to the petitioner. In the event the petitioner''s application fails, the respondent No. 1 will be entitled to appropriate the said amount with interest accrued thereon against the demand contained in the letter dated March 22, 2001, and also to pursue the demand in respect of the balance.
26. There will be no order as to costs.
All parties to act on a xerox signed copy of this judgment on the usual undertakings.
