Entertainment Duty Not Applicable On Billiards Tables At Members-Only Club: Bombay High Court

Unlike a commercial pool parlor meant for public entertainment at a fee, the clubs neither allow outsiders nor benefit commercially from the activity. Therefore, providing billiards tables cannot be treated as "entertainment" and consequently cannot be taxable under the Act, the court held.

The division bench of Justices KR Shriram and Milind Jadhav quashed and set aside all demand notices issued between 2005-09 to each of the petitioners and warrant of attachment, wherever issued.

The petitioners include Bombay Presidency Golf Club, Bombay Presidency Radio Club, National Sports Club of India (NSCI), Garware Club House, Bombay Gymkhana, Cricket Club of India (CCI), Santacruz Gymkhana and for Bandra Gymkhana.

The order said that facts of the present matter were identical to the case of Gondwana Club Vs. State of Maharashtra wherein the court laid down the rules under which entertainment fee is levied.

"On a combined reading of the provisions of Section 2(a), 2(b-1), 2(b-2), 3 and 4 of the Act, it is clear that entertainment duty could be levied only if the entertainment is provided on payment…," the court said.

One of the petitioners, the National Sports Club of India (NSCI) of Mumbai, registered under the Societies Registration Act, XXI of 1860 NSCI received a notice from the Collector (Entertainment Duty Branch) alleging that section 2(1)(b-1)and (b-2) and section 3(9) of the said Act, an entertainment duty of Rs. 5,000/- per month per pool table/billiard table is payable before the 10th of every month.

NSCI's counsel contended that the club is excluded from chargeability or levy of any entertainment duty under the Act. Additionally, NSCI was neither established with the object of carrying on any business or with the object of making profits. "NSCI collects money from its members and applies it for their benefit not as shareholders but as persons who put up the fund and makes no profit," the club claimed.

The court answered the following two questions in the negative.

(a) whether the Collector (Entertainment Duty Branch) can demand from petitioners entertainment duty on billiard tables kept at the club premises for the exclusive use of its members by equating it to a pool parlour; and

(b) whether the facility of the billiard tables provided by petitioners in their respective clubs can be treated as 'entertainment' for the purpose of Bombay Entertainment Duty Act, 1923.

Case Title: Santacruz Gymkhana Versus State of Maharashtra and Anr. with connected matters

Citation: 2022 LiveLaw (Bom) 259 

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