Holding

The video show is an entertainment under section 2(3) and is therefore taxable under section 3 of the Uttar Pradesh Entertainment and Betting Tax Act, 1937.

Summary

Geeta Enterprises and others operated a video parlour where patrons could view and play video games of sports and other amusements by inserting a 50‑paise coin for each 30‑second session. The petitioners argued that because the shows involved skill and no admission fee was charged, they did not fall within the definition of "entertainment" under section 2(3) of the Uttar Pradesh Entertainment and Betting Tax Act, 1937 and therefore were not liable to tax under section 3. The Supreme Court examined the wide ordinary meaning of "entertainment" and the statutory language that includes any exhibition, performance, amusement, game or sport to which persons are admitted for payment. It held that the payment to operate the video machine constitutes payment for admission to an entertainment, that the presence of skill does not exclude it, and that the public nature of the exhibition brings it within the first limb of the definition. Consequently, the video shows are liable to entertainment tax. The writ petitions were dismissed.

Issues considered

Whether video games shown in a video parlour constitute "entertainment" within the meaning of section 2(3) of the Uttar Pradesh Entertainment and Betting Tax Act, 1937.
Whether payment for operating a video machine, without a separate admission fee, amounts to payment for admission to entertainment.
Whether the element of skill in the games excludes them from the definition of entertainment.

Legislation cited

Uttar Pradesh Entertainment and Betting Tax Act, 1937s. 2(3), s. 3

Subjects

entertainment taxvideo gamesdefinition of entertainmentpublic exhibitionskill and amusementUttar Pradesh Acttax liability

Judgment

812

GEETA ENTERPRISES AND OTHERS

v.

STATE OF U.P. AND OTHERS

September 5, 1983
B
[S. MURTAZA FAZAL A_LI, A: VARADARAJAN AND
' M. P. THAKKAR, JJ,]

Uuar Pradesh Entertainment and Betting Tax Act, 1937-Sec. 2(3 -
Definition of Jlntertainment-Extremely wide- Video shows fall in the ambit of
c s. 2(3) and are exigible to entertain"1ent tax under sec. 3. it11en a show WO!lld be
entertainment-Test laid down.

Words and phrases-'Enterta(nment'.

The petitioners opened video parlour by installing electronic machine
D with video screen and permitted persons to enter the pre.nises without any
charge to view a show on the video which consisted mainly of sports, games
etc. played on the scr~en of the video. The show lasting upto 30 second.s was _,
operated by inserting 50 paise coin into the video machin'e by an operator
from the audience who wanted to operate the video_ machine. While one High
Court was of the view that the video games were included in the definition of
entertairiment and were Jiab!e to entertainment tax, two other High Courts
E were of the opposite view. The petitioners filed the present writ petitions
contending that in view of the manner in which the video games were shown
and also in view of ·the fact that these· gam~s, sports etc. involved a great
amount of skill for the operator, the video games would not be an entertainment
. within the meaning of sub-sec, (3) of sec. 2.

F Dismissing -the_ petitions,

HELD : The video show is an entertainment under sec. 2(1) and
therefore eKigible to tax under sec. 3.] [82! A-BJ

A perusal of the various shades, aspects, forms and implications or the
G word 'entertainment as defined in different ·books and dictionaries clearly leads
to an irresistible inference "that the word 'entertainment' has been used ih a·
very wide sense so as· to include within its ambit, entertainment of any kind·
including one which may be purely educative. 'Sub-sec. (3) of sec. 2 itself by
using the word 'en~ertainment aS "any exhibitional, performance, amusement,
game or sport to whiCh persons are admitted for payment" has extended the
H scope of entertainment to expressly. include any kind of atnusement, game ot
sport. When a number of people \vithout any admission fee enter a hall for
· entertainment and enjoy the games it becomes a public show and the hall
where the video is played becomes a public hall and amounts therefore to a
GEETA ENTERPRISES v. U.P. Faza/ Ali, J.)· 813

public exhibition which is squarely covered by the first limb (exhibitional) of
.
the definition of entertainment in sub-sec. (3) of sec. 2. 817 A·B, E-E]
. .
A
Porritts & Spencer (Asia) Ltd. v. State of Haryana, [l979] l S.C.R. 545;
Stroud's Judicitil Dictionary (4th Edn; vol. 2. p. 916); Words and Phrases, Judi-
cially Defined (vol. 2, p. 206-207); Words and Phrases (Permanent Edn; vol. 14A,
p. 353); Reader's Digest Family Word Finder at p. 264; Webster's Third New
· International Dictionary; and Concise English Dictionary by Hayward and Sparkes,
)• referred to. B

In the· present case by operating the video, the operator of the video
pays 50 paise per 30 seconds for playing the gan1es, sports and other kind of
performances which are shown on the machine and which can be watched by
interested spectators. The circumstances that no admission fee is charged from
viewers seeing the video by itself, however, cannot defuse or alter the kind of
entertainment deprived by the person who pays for ·playing the games. The
c
operator of video would deprive, pleasure and be entertained regardless of
whether the possesses. skill or not; If he possesses skill he may derive more
pleasure on less payment otherwise he will have to pay but he will derive
pleasure all tho same. · That he would not pay money if it did not thrill,
amuse, aDd entertain him, is obvious. Besides, 'the game brings a substantial
return for the person who makes available these facilities. [817 C-E, G·H] D

Gopal Krishna Agarwal v. State of Uttar Pradesh & Ors., All L J, 1982 at
. page 607 approved.

Harris Wilson v. State of Madhya Pradesh & Ors., A.T.R. 1982 M.P. at
page 171 and H. T. Gursahaney v. State & Anr., 1982 (2)-vol. Xlll (2), GLR
526 overruled.

ORIGINAL JURISDICTION: Writ Petition Nos. 1731, 1915, 2277,
3691, 7097, 9~28/81 and 2121, 7430, 7431, 8349, 9319 of 1982.
F
(Under article 32 of the Constitution of India)

K. C. Dua, for the Petitioners.

il: P. Maheshwari, for the Respondent.
The Judgment of the Court was delivered by

F AZAL ALI; J. What appears to be a short and simple point
has been the subject matter of-a serious divergence of judicial opinion
+. between two leading High Courts of our country, namely the
H.
Allahabad High Court and Madhya Pradesh High Court taking
contrary views which have to be res_olved by us in the present writ
814 SUPREME COURT REPORTS (19831 3 S.C.R.

petitions. The short point involved in these petitions turns upon the
A interpretation of the word "Entertainment" as·used in section 2(3) of
the Uttar Pradesh Entertainment and Betting Tax Act, 1937 (here-
inafter to be referred to as the 'Act').

The facts of these cases lie within a very narrow compass artd
B may ~e stated thus :-

The first petitioner is a partnership firm which had launched an
entertaining and ingenious enterprise for the running of a Video
Parlour at 3, Chauhan Market, Delhi gate, Agra. The modus
operandi of the petitioner was as ·follows. A machine with a viedo
c screen is installed in the parlour of the petitioner. The petitioner
permits persons to enter the premises without any charge to view a
show on the video which consisted mainly of sports games etc. played
' on the screen of the video. According to the petitioner he did not
charge any admission'fee but the Electronic Machines imported from
D Japan having educational value for persons playing the games were
· meant to provide educational entertainment by showing sea warfare,
battle field space warfare sports and many other things which were
likely to provide both educati?n and entertainment to the vjewers,
particularly ·to young children. The mechanism for playing the
machine was so designed that a coin of 50 naya paise was to be inser·
E ted into a strong box ·built within the machine, the keys of which
were with the manufacturer. After the show was over a representative
of the manufacturing company would come, open the box, collect
the money and pay the •hare of the hirer-petitioner out of the.
collected sale proceeds. It was further alleged that no admission or
F gate entry fee was charged for entering the House or Parlour to watch
or play the· game or for entering into the adjacent snack shops. The
shows were operated by an operator from the audience and 50 paise
coin was inserted into the aforesaid box before the show could start.
The charge of inserting the coin was realised only from those who
wanted. to operate the video machine at the rate of ·50 paise for a
G .!\ show lasting up to 30 seconds.

The petitioners thus contended that the man.ner. iii which the
game was shown to the viewers and operated by the person playing
·H the games was not an entertainment· within the meaning of section
2 (3) of the Act. To Buttress this argument the peti1ioners cited the
example of several States where identical shows were not exigible to
entertainment tax. It is manifest that the manner and the mechanism
GEETA ENTERPRJSES v. U.P. (Fazal Ali, J.). 815.

by which the qperation of the video was done would be exigible to
tax could not be determined merely because some other States did A
not choose .to charge any entertainment tax for the video shows.

The crux of the matter is as to whether or not the show, the
details of which have been described above falls within the four
corners of the expression "Entertainment". Sub-section 3 of section .b
2 of the Act may be extracted thus :-

"entertainment" includes any exhibitional, perfor-
mance, amusement, game or short to which'. persons are
admitted for payment."
c
• It is true that a part of the video show was of some educational
vaiue but that by itself would ~e no answer to the application of
Sub-section 3. The definition as extracted above is extremely wide
so as to take within its fold al).d includes the kind of show which was
displayed by the petitioners in this case.
D
Before explaining the section we would like to ascert~in the
correct meaning and import of the word 'entertainment' (which
is neither a scientific nor a technical term) as used in the popular
sense or as understood in common parlance. · This was held by this
Court in the case of Porritts and Spencer (Asia) Ltd v. State of E
·Haryana.(1) In Stroud's Judicial Dictionary (4th Edn; vol. 2. p. 916)
the word 'entertainment' has been defined thus :

1 "Entertainment ... for a PUBLIC OR SPECIAL
Occasion" ... is an entertainment in the sense of a gather-
ing of persons for entertainment."

"Entertainment'; (Small Lotteries and Gaming Act
1956 (c. 45, s. 4 (I) included a tombola drive alone with· ,,,,.
out accompanying festivities.
G
"The monologue or patter of a com~dian, even if
delivered at an entertainment provided by an institution
whose activities are partly educational, was held to be a.
"variety entertainment" .within the meaning of the
Section." H

(l) (1979j I S,C.R. 545.
816 SUPREME COURT REPORTS [1983] 3 s.c.R.

Similar,ly in words and Phrases, Judicially Defined (vol. 2, p,
A 206·207) the word entertainment has b,een defined thus :--

"Entertainment is something connected with the
enjoyment of refreshment-rooms, tables, and the like. It
is something beyond refreshment ; it is the. accommoda-
tion provided, whether that includes a musical or other
amusement or not".

Similarly in Words and Phrases (Permanent Edn ; \OJ. 14A, p; 353)
'entertainment' has been defined thus :_;_

~ "An entertainment is a source or means of amuse·
ment; a diverting performance, especially a public perfor-
. mance, as a. concert, drama, or the .like."

"Entertainment" denotes that which serves for
D amuse~ent, and "ai:iusement". Is defined as a pleasure,
able occupation of the senses, or that which furnishes it,
as dancing, sports, o~ music."

Likewise in Reader's Digest Family Word Finder ~t p-263. 'enter-
tainment' ha·s been defined thus :
E
"Entertainment amusement, diversion, distraction,
recreation, fun, play, good time, pastime, no'lelity;
pleasure, enjoy~ent, s~1ti~faction."

In Webster's Third New International Dictionary the word 'enter- I

tainment' has been.defined at p. 757 thus:-
"entertainment · the act of diverting, amusing, or
causing someone's time to pass agreeably.
• "Something that diverts, ~muses, or occupies the
~ attention agreeably.
A public performance designed to divert or amuse. Similarly
in the Concise English Dictionary by Hayward and Sparkes the word
entertainment' has been ddincd thus :- ·
H
"the art of entertaining, amusing or diverting, the
pleasure afforded to the mind by anything interesting,
amusement, other performance intended..·.
to amuse."·
. '
. ,
GEETA ENTERPRiSES v. U.P. (Fazal Ali, J.) 817
.J
A perusal of the various shades, aspects, forms and implications
of the word ·entertainment' as defined in the aforesaid books clearly
leads to an irrcssistible inference .that the word 'entertainment' has
been used in a very wide sense so as to . include within its ambit,
'entertainment of any kind including one which may be purely
educative. Sub-section 3 itself by using the word 'entertainment' as
"any exhibitlonal, performance, amusement, .. game or sport to which
persons are admitted for payment" has extended the scope of enter- B
tainment to expressly include any kind of amusemen_t, game or sport.
It cannot be disputed in the present case· that by operating the video,
the operator of the video pays '50. paise per 30 seconds for playing
the games, sports and other kind of performances which are shown
on the machine and which can be· watched by interested spectators. c
. 1 It was vehemently argued by the Codasel for the petitioners that no
admission fee is charged from viewers seeing the. video. That circum-
stances by itself, however, cannot defuse or alter the kind of
entertainment derived by the person who pays for playing the games.
That he wo.uld not pay money if it did not thrill, amuse, and
ente1iain him, is obvious. Translated into actual practice, if the D
operators--who ~re from the audience play thC video for one hour the
amount of money collected would be Rs. 60 and if the video is
played for 3-4 hours a day, the total amount comes to .Rs. 180-240
per day which is doubtless a substantial amount for showing the
video by way of an entertainment because when a number of people E
without any admission fee enter a hall for entertainment and enjoy
the games it becomes a public show and the hall where the video is
played becomes a public hall and· amounts therefore to a public
exhibition which is squarely covered by the first limb (exhibitional)
\ of the definition of entertainment in Sub-section 3 extracted above.
F
It was next argued ihat to play these games, sports etc. involves
a great amount of skill for the operator and therefore it would not
be an entertainment within the meaning of Sub-section 3. This
argument appears to be without any substance .because he would -'
drive pleasure and ""'entertained regardless of whether he possesses
G
skill or not. If he possesses skill he may derj,ve more pleasure on
less payment otherwise he will have to pay but he will derive pleasure
all.the same. Besides, the game brings a substantial return for the
person who makes available these facilities. In these circumstances
H
it is impossible for us io hold that such an exhibition falls beyond ·
the purview of the word entertainment as envisaged in sub-section 3.

•
818 SUPREME COURT REPORTS (1983) 3 S.C.R. -

. Furthermore, clauses regarding payment for admission
A includes :- . ·

"Any payment for a programme or synopsis of an
entertainment."

B "Any payment for any purpose whatsover connected
with an entertainment which a persof! is required to make
as a condition of attending or continuing to attend the
entertainment in addition to the payment, if any, for
admission to the entertainment."

c Section 3 which is the charging section runs thus:-

"There shall be levied and paid on all payments for
admission to any entertainment a tax (hereinafter referred
to as entertainment tax)."
D
Section 3 of the Act which has_ been extracted above, clearly
applies to the facts of this case because here the payment is based on
<
a lump sum baFis calculated at the rate of 50 paise per 30 seconds.

/ Thus, on a consideration of the legal connotation of the word
E 'entertainment as defined in various books, and other circumstances
of the case as also on a true interpretation of the word as defined in
s. 2 (3) of the 'Act, it follows that the show must pass the following
tests to fall within the ambit of tlie aforesaid section :

F J_ that the show, performance, game or sport, etc. must
contain a public colour in that the show should-be .
open to public in a hall, theatre or any other place
where members of the public are invited or attend the
mow.
G 2. · that the show may provide any kind. of amusement
whether sport, game or even a performance which
requires some amount of skill.

In some of the cases, it has been. held that even
H holding of a tombola in a club hall amounts to
entertainment although the playing of tombola does,
to some extent, involves a little skill. ·
GEBTA BNTBRPRISES v. u.P. (Fazai Ali, J.) 819

3. that even if admission to the hall may be free but if
the exhibitor derives some benefit in terms of money A
it would be deemed to be an entertainment.

4. that the duration of the show or the identity of the
person who operates the machine and derives pleasure
or entertained or that. the operator who pays him· B
self feels entertainment is wholly irrelevant in judging
the actual meaning of the word 'entertainment' as
used in s. 2-(3) of the Act. So also the fact that the
income derived from the show is shared by one or
more persons who run the show.
c
The Allahabad High Court in the case of Gopal Krishna
Agarwal, v. State of Uttar Pradesh and Ors(1) which was also
a case under the Act, held that entertainment tax was leviable on
video games. The High Court has very carefully analysed sub-sec·
tion 3 of s. 2 of the Act and the import of the word 'entertainment' D
and observes as follows :-

"The context in which the word 'includes, has been
used in the definition clauses of the Act does not indicate
that the ·Legislature intended to put a restriction or a
limitation on words like 'entertainment' or 'admission to E
an entertainment' or 'payment for admission'. With the
advance of civilization ·and scientific developments new
forms of entertainment have come into existence~ Video
Games are probably th~ latest additions to the means of .
\ entertainment. These games require skill and precision F
as so many other games do. They are a source of amuse-
ment and enjoyment to those who participate in the
games. Others who stand by and watch also derive some
pleasure and amusement though not to the same degree.
Admission to.the premises where the Video Machines are
installed may be free but payment is admittedly made if . G
one wants to play the game. The money charged for use ./ ·
of the Video Machine is an admission to entertainment
and the payment made by the person who uses the
Machine is the payment for admission, Jn. any case it is
a payment for admission. Jn any case. it is a p~yment H

(I) [1982] All. L.J. 607.
SUPREME COURT REPORTS [1983] 3 s.c. R.;
connected with entertainment which a person is required.
A to make as a condition of attending the entertainm~nt".

We find ourselves in entire agreement with the observations of
the. Court and fully approve of the ratio decendi of this case . The
.Allahabad High Court has given almost the same reasons as given by
B us in the'earlier part of the judgment.
•
It is true that in the case of Harrish Wilson v. State of Madhya
Pradesh and Ors.(1) the Madhya Pradesh High Court had taken a
contrary view and held as follows :-

c "Therefore, what entertains a person in the video
·games parlour is his own performance and not the exhibi-
tion, performance, amusement, game or any sport offered
by the petitioners. The payment made by a person to
another to provide him with tools for deriving pleasure
from his own performance with the help of the tools can-
D.
not be beld to be payment to that another for 'admission
to entertainment' as contemplated by the Act. In our
"opinion, therefore, it cannot be ·held that the petitioners ;
receive 'payment for admission to entertainment', when
they collect amounts inserted by the persons in the slot."
E
' And the Gujarat High Court in H. T. Gursahaney v. State and
Anr.(') has taken a similar view. Apart from the wrong line of
reasoning adopted by the Madhya Pradesh High Court it seems· to
have completely overlooked certain important aspects of the question
which we have dealt with in our judgment. Moreover even the
language of the charging provision of the Act which fell for.interpre-
tation in that case does not appear to be absolutely in pari-materia
with the language of the various sections of the U. P. Act. Even so
the pivotal conclusions derived by the Madhya Pradesh High Court
and the Gujarat High Court do not appeal ·to us. .The mere fact that
G . payment is not made at the time of entering the premises is irrelevant.
-1 Payment made. at a later stage by inserting a coin is nonetheless for
being admitted to a place of entertainment. Thus. the fee being •
charged in a different manMr at a different stage is in any case for
providing enterta.im;nent. We, therefore, with due respect Jo the High•
H Courts, disapprove their decisions.

(I) A.l.R. 1982 M.P. at page 171.
(2) [1982] 2 Vol. Xlll (2), GLR 526.
GEETA ENTERPRISES v. U.P. (Fazai Ali, J.)

For the reasons giyen above we hold that the decision of the
Allahabad High Court is'correci and we hereby over rule the decisions A
of the Gujarat and Madhya Pradesh High Courts. In our opinion,
. 't the,. video show in the instant case is clearly exigible to tax under
section 3 of the Act. ·The Writ petitions are accordingly dismissed
with no order as to costs.
B
H.S.K. Petitions dismissed.