Entertainment duty not applicable on billiards tables in private clubs for exclusive use of members: Bombay High Court

Entertainment duty not applicable on billiards tables in private clubs for exclusive use of members: Bombay High Court

The Bombay High Court recently held that Entertainment duty will not be applicable on billiards tables at a members-only club, and thereby quashed demand notices issued to eight elite clubs in Mumbai under the Bombay Entertainment Duty Act 1923.

The Court opined that providing billiards tables cannot be considered entertainment, as the clubs do not allow outsiders not to benefit commercially from such activity. Hence, cannot be made taxable.

The Petitioners in the present case 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 Bandra Gymkhana.

Relying on the case of Gondwana Club Vs. State of Maharashtra, which had identical facts as with the present case, the Court observed that "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…"

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, stating that an entertainment tax of Rs 5,000 per month per pool table is liable to be paid before 10th of every month. Contending the aforementioned, counsel for NSCI 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 nor 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 make no profit," the club claimed.

In conclusion, the Court held that the Collector cannot demand from the petitioners an entertainment duty on billiards tables kept at the club for the exclusive use of members by equating it to a pool parlor. Additionally, it also held that the facility of providing billiards tables in the respective clubs cannot be treated as 'entertainment' for Bombay Entertainment Duty Act, 1923.