# MARKAND SAROOP AGGARWAL AND ORS v. M. M. BAJAJ AND ANR

- **Citation:** [1979] 1 S.C.R. 784
- **Court:** Supreme Court of India
- **Decided:** 1978-09-15
- **Case number:** Criminal Appeal No. 368 of 1976
- **Bench:** Jaswant Singh, P. S. Kailasam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/markand-saroop-aggarwal-and-ors-v-m-m-bajaj-and-anr-7535
- **Pages:** 8

## Headnote

Adniission charges 'on per head' basis to the nightly
dinner-cum··cabaret
pr0Rra1nmes, lVhether liable to emertainn1ent tax-United Provincc>s E1llertainment
and Betting Tax, 1937 (as extended to Delhi) Sections 2(1)(c), 311)(3), 4(1)
and 5(3).
The appellants Me five partners of Lido Restaurant, New Delhi and ~hey
charged 'on per head' basis in the nightly dinner-cum-cabaret programmes. A
complaint was filed by the Entertainment Tax Inspector on behalf of the 1>'tate,
against them on the ground that they had contravened the provisions of Section
4(1) and with Section 3(1) and Section 3(3) of the U.P. Entertainment and
Betting Tax Act, 1937 as extended to Delhi and punishable under Section 5(3)
of the Act. The Trial Conrt acquitted the accused on the ground that no
offence against them had been established. On appeal, the High Court found
them guilty of the offences with which they were charged, allowed the appeal.
set aside the order of acquittal and imposed a fine of Rs. 40/- each on tl1c
five partners of the Lido Restaurant directing that the fines be paid in addition
to the tax leviable under Section 3 of the Act
Disn1issing the appeal by special leave, the Court
E
l-IELD : 1. The United Provinces Entertainment and Betting Taxes Act, 1937
F
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(as extended to Delhi) is wider in scope and in application. The definition of
'admission to an entertainment' in S. 2(1) and cpayment for admission' in
Section 2(6) and used in Section 3(1) are widened so as to embrace payment
for any purpose whatsoever connected with an entertainment and admission to
a place in which the entertainment is held. [789G-H. 790A]
2. Admission to an entertainment would include admission to any place
in which entertainment is held and payment for admission would include any
payment for any purpose whatsoever connected with an enterta.inment which a
person is required to make as a condition of attending or continue to attend the
entertainment. Otbaret show is an item of entertainment. [787G·H]
3. On the facts of the case it would be an admission to an entertainment.
Though it may be for talting tea or dinner for a minimum cl1arge·, as the
ndrnission is to a place where the entertainment is he1d, it would come within
the definition under section 2(1). Further, the payment
of
Rs.
5/-
or
Rs. 10/- though it is stated to be for the dinner, as it is connected with an
entertainment and as the person is making the payment as a condition. for
attending or continuing to attend the entertainment, it would attract the definition
of payment for admission under section 2(6)(iv) of the Act. [788G·H, 789AJ
R
Williams v. Wright, [1897] 13 T.L.R. 551, Kite/mer v. Evening Standard Co.
Ltd., [1936] 1 K.B. 576 :ind /. Lyons & Co. Ltd. v.
Fox, [1919! I K.B. 11;
discussed and quoted with approval;
I
/
M. s. AGGARWAL v. M. M. BAJAJ (Kai/asam, !.)
785
Attorney General v. London Casing Ltd., [1937] 3 All E.R. 858; explained
;A_
and applied.
Attorney General v. Mcleod, [1918] 1 K.B. 13, Attorney General v. Swan,
-(1922] 1 K.B. 682, Attorney General Arts Theatre of London Ltd., [1933] 1 K.11.
-439 and Attorney General v.
Southport Corporation,
[1933] All E.R. 971;
referred to.

## Text

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784
MARKAND SAROOP AGGARWAL AND ORS.
v.
M. M. BAJAJ AND ANR.
September 15, 1978
[JASWANT SINGH AND P. S. KAILASAM, JJ.]
Adniission charges 'on per head' basis to the nightly
dinner-cum··cabaret
pr0Rra1nmes, lVhether liable to emertainn1ent tax-United Provincc>s E1llertainment
and Betting Tax, 1937 (as extended to Delhi) Sections 2(1)(c), 311)(3), 4(1)
and 5(3).
The appellants Me five partners of Lido Restaurant, New Delhi and ~hey
charged 'on per head' basis in the nightly dinner-cum-cabaret programmes. A
complaint was filed by the Entertainment Tax Inspector on behalf of the 1>'tate,
against them on the ground that they had contravened the provisions of Section
4(1) and with Section 3(1) and Section 3(3) of the U.P. Entertainment and
Betting Tax Act, 1937 as extended to Delhi and punishable under Section 5(3)
of the Act. The Trial Conrt acquitted the accused on the ground that no
offence against them had been established. On appeal, the High Court found
them guilty of the offences with which they were charged, allowed the appeal.
set aside the order of acquittal and imposed a fine of Rs. 40/- each on tl1c
five partners of the Lido Restaurant directing that the fines be paid in addition
to the tax leviable under Section 3 of the Act
Disn1issing the appeal by special leave, the Court
E
l-IELD : 1. The United Provinces Entertainment and Betting Taxes Act, 1937
F
G
(as extended to Delhi) is wider in scope and in application. The definition of
'admission to an entertainment' in S. 2(1) and cpayment for admission' in
Section 2(6) and used in Section 3(1) are widened so as to embrace payment
for any purpose whatsoever connected with an entertainment and admission to
a place in which the entertainment is held. [789G-H. 790A]
2. Admission to an entertainment would include admission to any place
in which entertainment is held and payment for admission would include any
payment for any purpose whatsoever connected with an enterta.inment which a
person is required to make as a condition of attending or continue to attend the
entertainment. Otbaret show is an item of entertainment. [787G·H]
3. On the facts of the case it would be an admission to an entertainment.
Though it may be for talting tea or dinner for a minimum cl1arge·, as the
ndrnission is to a place where the entertainment is he1d, it would come within
the definition under section 2(1). Further, the payment
of
Rs.
5/-
or
Rs. 10/- though it is stated to be for the dinner, as it is connected with an
entertainment and as the person is making the payment as a condition. for
attending or continuing to attend the entertainment, it would attract the definition
of payment for admission under section 2(6)(iv) of the Act. [788G·H, 789AJ
R
Williams v. Wright, [1897] 13 T.L.R. 551, Kite/mer v. Evening Standard Co.
Ltd., [1936] 1 K.B. 576 :ind /. Lyons & Co. Ltd. v.
Fox, [1919! I K.B. 11;
discussed and quoted with approval;
I
/
M. s. AGGARWAL v. M. M. BAJAJ (Kai/asam, !.)
785
Attorney General v. London Casing Ltd., [1937] 3 All E.R. 858; explained
;A_
and applied.
Attorney General v. Mcleod, [1918] 1 K.B. 13, Attorney General v. Swan,
-(1922] 1 K.B. 682, Attorney General Arts Theatre of London Ltd., [1933] 1 K.11.
-439 and Attorney General v.
Southport Corporation,
[1933] All E.R. 971;
referred to.
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 368
of 1976.
Appeal by Special Leave from the Judgment and Order dated
17-2-1976 of the Delhi High Court in Criminal Appeal No. 141 of
1971.
Frank Anthony and N. C. Sikri for the Appella·at.
S. N. Anand and R. N. Sachthey for Respondent No. 1
The Judgment of the Court was delivered by
KAILASAM, J.
This appeal is preferred by the five
partners of
Lido Restaurant, Connaught Circu:s, New Delhi,
by special
)caw
against the Judgment and order of the High Court of Delhi in Criminal
Appeal No. 141 of 1971.
A complabt was filed by the Entertainment Tax Inspector on bec
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half of the State in the court of the Judicial Magistrate, First Class,
against the appellants on the ground that they had contravened the
provisions of section 4(1) read with section 3(1) and sectidn 3(3) of
E
the U.P. Entertainment and Betting Tax Act, 1977, as extended
to
Delhi and punishable under section 5 (3) of the Act. The trial court
acquitted the accused on the ground that no offence against them had
been established. On appeal by the Entertainment Tax Inspector, the
High Court found that the appellants were guilty of the offences with
which they were charged, allowed the appeal, set aside the order of
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acquittal and imposed a fine of Rs. 40/- each on the fi\le partners of
the. Lido Restaurant and directed that the fines be paid in addition to
the tax leviable under section 3 of tlie Act.
P.W. 3, Bodh Raj, was the entertainment tax inspector at
the
material time. On 15th November 1968, under the instruction of his
G
superior officer, he went along with 13ajaj,
P.W. 5, inspector,
and
visited Lido Restaurant, Connaught Circus, at 10 PM. and remaill'od
in the Restaurant till 11.15 P.M. Cabaret programme was given in the
• 1
restaurant and a band was in attendance.
P.W. 3
contacted
the
'
manager and recorded a statem~nt which is Ex. l3.1, in which
the
manager, V. N. Sood, stated that they were holding cabaret programme
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from 5th November.1968 daily and that the service is effected on an
a la carte basis. The minimum charges for eatables at the time
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SUHllMIO COURT REPOUS
[1979) l S.C.tl.
cabaret are Rs. 5/· at evening tea, and Rs. 10/- at dinner time from
10 P.M. onwards. According to his statement, there was no admission
charge or fee of any kind. P.W. 3 also examined cash memos
and
found at that time 72 persons were present in the restaurant for taking
dinner. The evidence of the inspector is that no charges for entry to
the restaurant was collected except a minimum charge of Rs. 5 /- for
the evening and Rs. 10 I· for the night which was adjustable towards.
the food. The Accountant of the restaurant, who was examined as.
P.W. 4, explained that they were collecting the charges for the food
consumed by the customer tn the restaurant and no moaey was being
charged for cabaret or any other type of entertainment. The evidence
of P.W. 5, the inspector, Entertainment Tax, is that a sum of Rs. 10/·
were the minimum charges for the food including band ~rformance.
A sum of Rs. 10/· were charged o:i per head basis, in the nightly
dinner-cum-cabaret programme.
On the evidence adduced, the trial court found that the cabaret
performance in a restaurant is essentially an item of entertainment. It
also found that Rs. 5 / • and Rs. 10 /- were minimum charges for the
afternoon tea and dinner. It is also clear that these amounts were
adjusted towards the eatables that were consumed. It is not the case
for prooecution that the price of eatables were raised for the purpose
of covering the entertainment, but it is seen from the admission of the
E
manager as w,11 as the evidence on record that whether. a person con·
sumed anything or '110t, he had to pay Rs. 5 /- for the evening and
Rs. 10 /- for the night. If he consumes eatables for more than Rs. 5 /-
in the evening and for more than Rs. 10 /- in the night, the amount
of Rs. 5/· and Rs. 10/- paid by him would be adjusted. On these
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facts, the question arose whether any charges were rollected for the
cabaret entertainment.
Tbe :trial court came to the conclusion that
nothing was charged for cabaret performance and the minimum
charges had only been fixed so that no undesirable element
can get into the restaurant. Tbe High Court came to a different con·
clusion and found that the idea behind the requirement of payment of
minimum charge was to cover the cabaret programme and therefore
would attract entertainment duty payable under the law.
In order to decide the question, the relevant provisions of the law
under which the accused are charged will be referred to. The United
Provinces Act 8 of 1937 was passed on 22nd October 1937 for the
purpose of imposing a tax on entertainment and other amusements and
on certain forms of betting. Section 3 (1) provides that there shall be
levied and paid to the Central Government on all payments for admis·
sion to any entertainment, a tax at the rate specified in the section.
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M. s. AGGARWAL v. M. M. BAJAJ (Kailasam, J.)
787
Scctioo 3 ( 3) provides for amounts payable on lump subrscription or
coo.tribution or on seasoo ticket and other matters which would be
.referred to a little later.
Section 4 (1) runs as follows :-
" 4. ( 1) Save as otherwise provided by this
Act,
no
person, other than a person who has some duty to perform
in connection with the entertairunent or a duty imposed upon
him by law, shall be admitted to any entertainment, except
with a ticket stamped with an impressed embossed, engraved
or adhesive stamp (not before used) issued by the Central
Government for the purposes of revenue and denoting that
the proper entertainments tax payable under section 3 has
been paid."
The words "payment for admission" in sectiO':J. 3 ( 1) is defined under
section 2 ( 6) as follows :-
"Payment for admission" includes :-
(i) any payment made by a person who, having been
admitted to one part of a place of entertainme'nt is
subsequently admitted to another part thereof, for .
admission to which a payment involving tax or more
tax is required;
(ii) a,ny payment for seats or other accoml}lodation in a
place of entertainment;
(iii) a'ny payment for a programme or synopsis of an
entertainment; and
(iv) any payment for any purpose whatsoever connected
with an entertainme.nt which a person is required to
make as a condition of attending or continuing to
attend the entertainm~nt in addition to the payment,
if m1y, for admission to the entertainment."
Admission to an entertainment is defined under section 2 (!) as including admission to any place to which the entertainment is held. Under
section 3 ( 1), all payments for admission to any entertainment is taxable. Admission to an entertai'nment would include admission to any
place in which entertainment is held and payment for admi!ision would
include any payment for any purpose whatsoever connected with an
entertaimne'.nt which a person is required to make as a condition of
attending or continue to attend the entertainment. It is not in dispute
that cabaret show is an item of entertainment. The only question therefc:>re that arises for consideratio'n in this case is, whether any payment
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SUPREME COURT REPORTS
(1979] J S.C.R.
for admission to the entertainment is made. The contention on behalf
of the prosecutioru is that by levying a minimum charge of Rs. 5/- for
the evenh1g and Rs. 10/- for the night, there is a payment for the
entertainment also. It is the case of the defence that there is no levy
for the entertainment and the minimum fee is levied only for the purpose of keeping out undesirable elements from getting into the restaurant. By levying a minimum fee, the customer is liable to pay the
amount whether he consumes any eatable or not. Two advertisements
which were inser.ted by the restaurant invited customers for the show.
In the issues dated November 15, 1968 and November 9.
1968.
marked as Ex. 'A' and 'C' of the Hindustan Times, it is stated-
"LIDO
Air-conditioned
RESTAURANT
Opposite
Super Bazar
CABARET
Every day at 7-00 & 10-00 P.M.
(Please take seats by 6-30 & 9-30 P.M.)
*Welcome by Ladies
*Music
*Large Selection in Eatables
*Ope·n till late night
Seat Reservation on Tel. 4411 O''
The customers are i'nvited for the cabaret to take their seats by 6.30·
and 9.30 P.M. and to listen to music during which time large selection
of eatables would be available. It is not alleged that any extra rate is
F
charged for the eatable because of the show but it is not disputed that
a minimum fee is levied, for taking a seat for witnessing the show and
for taking tea or dinner. If the normal rates' are charged for the items
consumed and incidentally a show is put up, it cannot be said that any
payment is made for admission for the entertaimn~nt but requiring a
minimum of Rs. 5/- and Rs. 10/- whether the customer consumed any
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eatable or not would lead to an irresistible conclusion that a payment
of fee for admission to the entertai'nment is also included.
On the facts of the case it would be an admission to an entertainment. Though it may be for taking tea or dinner for a minimum charge,
as the admission is to a place where the entertainment is held, it
H
would come within the definition under section 2 ( 1). Further, the
payment of Rs. 5/- or Rs. 10/- though it is stated to be for the dinner,
as it is connected with an entertainment and as the person is making
)
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M. s. AGGARWAL v. M. M. BAJAJ (Kai/ruam, J.)
789
the payment as a condition for attending or continuing to attend the
entertainment, it would attract the definition of payment for admission
under section 2(6) (iv) of the Act. On the facts therefore we agree
with the conclusion arrived at by the High Court and co)lfrrm the convictions passed on the appellants and reject the appeal. The High
Court, in disposing of the appeal by t!he Government, though the Government was not present, dealt with the law elaborately referring to
varions English dechsions. The learned Counsel for the appellants, Mr.
Frank Anthony, rererred to some of the decisions and we
would,
before concluding our judgment, refer to a few of them in brief.
It may be noted that English Law on the subject has its origin
from the Sunday Observance Acts, 1625 to 1780. The Act, as a general rule, prohibited all public entertainments of all types on Sundays.
Act 1780 provided that "any house, room or ot!her place which shall
be opened or used for public entertainment or amusement and to
which persons shall be admitted by the payment of money or by tickets
sold foe money shall be deemed a disorderly house.", vide Halsbury
Laws of England. In Williams vi. Wright(') a ticket for a Sunday
concert at the Queen's Hall was stamped "Admission Free. Reserved
Seat ls." On the facts it was held that a charge was made for a
reserved seat and was not incompatible with the admission being free
and hence no offence was committed. In a subsequent case, Kitchner
v. Evening Standard Co. Ltd.,(') in connection with an all-in wrestling
contest an advertisement stated-"Prices 4s. 6d., 3s. 6d., 2s. Od., reserved, unreserved ls. Od.", it was held that an offence was committed
as the advertisement made it plain that no one can get in without
payment. The Finance (New Duties) Act, 1916, section 1 (1) of the
Finance (New Duties) Act, 1916, reads as follows :-
"There shall, as from the fifteenth day of May, ninetee·a
hundred and sixteen, be charged, levied and paid on all payments for admission to any enrertaimnent as defined by this
Act an Excise duty (in this Act referred to as
'entertainme":J.ts duty') ..... "
This sub-section is similar to section 3 ( 1) of the United Provinces
(Entertainment and Betting Tax) Act, 1937, with which we are concerned. The Acts with which we are concerned, have taken into
account the subsequent developments and wid~:ied the definition of
'admission to an entertainment' and 'payment for admission so as to
embrace payment for any purpose whatsoever connected with an
(I) [1897] 13 T. L. R. 55
(2) [1936] I K. B. 576
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SUPREME COURT REPORTS
(1979] 1 s.c.R.
entertainmoot and admission to a place in which the entertainmellt is
held.
In Halsbury's Laws of England, 3rd Edn. Vol. 37, Jlll:ge 11,
para 19, it is stated that it would be a levy for entertainment where
refreshments are sold for a higher price than the normal price evlln
though no money is paid for admission and would be liable for tax.
A decision which was debated at length at the bar is that of a Court
of Appeal in J. Lyons & Co. Ltd. v. Fox(~). In that case, the concerts
of music were given during and after the service of tea and !!inner.
The dinner was permitted to stay. for one hour after the service
of dinner had ceased.
No charge was made in any form except
for the meals which were served both at a fixed price and
a-la-carte, and for which a bill was rendered to the customer
before. he left the restaurant.
By a majority it was held that
payments made by the customers to the restaurant were not payment for admission to entertainment within the meaning of section
1 (1) of the Finance (New Duties) Act, 1916, and that the
entertainment duty was therefore not chargeable in respect thereof.
A minority judgment took the view that the tea or dinner was purely
incidental to the concert, especially in view of the finding of the Magistrate that the persons were paying not merely for the dinner but also
for the entertainment which followed the dinner. Reference was made
to Attorney General v. London Casino Ltd.,(2 ) under the Finance
(New Duties) Act, 1916. In this case, food and drinks were supplied,
as in an ordinary restaurant. and patrons were able to da':l.ce on the
stage.
In addition, an elaborate revue was performed at the stage.
Patrons were allotted tables as i'.n an ordinary restaurant and there was
a fixed menu each ,night, but dishes could be ordered a-la-carte. A
mi':l.imum charge of 15s. 6d. was made, payment being made before
F
leaving. The Court distinguishing the case in J. Lyons & . Co. Ltd. v.
Fox (supra) held that no doubt could be entertained that people paid
15s. 6d. because they can have a good dinner in pleasant surroundings
and that they paid it and to a substa':l.tial extent paid it because they
will, in addition to the dinner, be able to see an extremely good and
interesting and lively entertainment. The Court holding, "whatever the
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result may be, I cannot bring myself to doubt that the ':l.Ormal person
paying 15s. 6d. pays not only for the dinner but also for the right to
dance to a band, and to a substantial extent also pays it because he
desires to see that is a good and elaborate and expensively produced
show." The facts of the case in the London Casino's case (supra) is
similar to the facts of our case. In the case before us, a minimum is
fixed and we have no doubt, a part of which is a payment for admis-
(1) [1919] l K. B. 11.
(2) [1937] 3 All E. R. 858.
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M. s. AGGARWAL v. M. M. BAJAJ (Kailasam, I.)
791
sion to th~ entertainment. Other decisions referred to were Attorney
Gene10l v. Mcleod,(•) Attorney General v. Swam,( 2) Attorney General
Arts Theatre of London Ltd.(') and Attorney General v. Southport
Corporation (') . We feel it is unnecessary to burden our judgment wilh
the various decisions referred to in detail by the High Court for they
are not applicable as the Act with which we are dealing is wider in its
scope and application. In the circumstances we confirm the conviction
and sentence imposed by the High Court and its direction regatding
levy of the tax and dismiss the appeal.
S.R.
{l) [1918] l K. B. 13
(2) [1922] I K. B. 682.
(J) [1933] lB.439.
(4) [1933] All E. R. 971.
Appeal dismissed.
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