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UP DTH service providers lose plea on entertainment tax

NEW DELHI: A bunch of writ petitions filed by leading direct-to-home services providers challenging the Uttar Pradesh government‘s decision to levy entertainment tax on sale of its equipments as well as on recharge coupons has been dismissed by the Allahabad High Court.


Justice Sunil Ambwani and Justice Aditya Nath Mittal turned down the petitions filed by the DTH service providers who had moved the court after receiving notices from the state government for payment of entertainment tax. The petitioners had contended that the state government had no power to impose the tax.


However, the court said: "the state legislature is not denuded by its powers to levy entertainment tax on entertainment provided by either cable TV network or DTH services or any other emerging technology".


The court also rejected the demand to declare an impugned section of the UP Entertainment and Betting Tax Act as ultra vires of the Constitution, observing "the court would interfere only where a clear infraction of constitutional provision is established".


Referring to a number of Supreme Court orders, the court said: "The Supreme Court has expressed a note of caution that the burden is all the more heavier when the legislation under attack is a taxing statute, since the powers of the legislature in classifying objects for the purpose of taxation are wide".


The court also dismissed as a "feeble argument" the petitioners‘ contention that "the rate of entertainment tax on DTH services" was "discriminatory in comparison to the cable services".

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