Case Law Details
Adlabs Entertainment Limited Vs Union of India & Ors. (Bombay High Court)
Facts : The Assessee-company, set up a theme park and a water park. As part of State Govt policy, it was offered incentives such as waiver of entertainment tax, since the Assessee was heavily investing capital. Moreover, such waiver gave an advantage to the Assessee over other entities in the same line of business. Upon implementation of GST, entertainment tax was subsumed, due to which the Assessee lost the incentive of waiver of such tax . Further, it became liable to pay GST @ 18%, at par with others. The Assessee claimed that its business became unviable & was unable to return borrowed funds, while also failing to recover its capital investment. Hence the present writ seeking relief.
The Hon’ble High Court held that The issue warrants examination by the Government. Chief Secretary of State Govt directed to constitute committee comprising of Principal Secretary of Finance and the Secretary of Tourism. Assessee be permitted to make representations before it. Recommendations of committee be presented before this court on next date of hearing, i.e., Feb 21, 2019.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. Petitioner, a limited company, has set up a theme park and water park at Khalapur, Maharashtra by making sizable capital investment. As a part of the tourism policy of the State Government, the petitioner was offered certain incentives in the nature of entertainment tax waiver. The petitioner would point out that at the relevant time, the rate of entertainment tax was 15%. Thus, on account of heavy capital investment needed, the petitioner was granted such incentive and as a result, the petitioner would have an advantage over other entities in the same business who did not enjoy such incentive of tax waiver.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
