1. We have heard Shri Subodh Kumar for the petitioner. Shri S.P Kesarwani appears for the respondents.
2. By this writ petition the General Manager, Bharat Sanchar Nigam Limited, Telephone Exchange Building, Sector-19, Noida, has prayed for quashing the order dated 16/18.7.2009 passed by the District Magistrate, Gautam Budh Nagar to deposit the entertainment tax for the period from January 2009 to May, 2009 on I.P.T.V entertainment services and to apply for permission to operate the ITPV services. The petitioner has also been asked to provide the number of connections with names and addresses to deposit entertainment tax by 7th of every month under the U.P Entertainment and Betting Tax Act, 1979.
3. The District Magistrate had earlier issued a notice on 17.6.2009 to the petitioner to show cause as to why the amount of entertainment tax on Rs. 280/- per month collected from 77 subscribers as well as the rent for equipment at Rs. 50/- per month be deposited by BSNL. The petitioner's reply dated 6.7.2009 was considered, on which the District Magistrate came to a conclusion that the petitioner falls within the definition of ‘Multi System Operator’ under Section 2(k-1) of the U.P Entertainments and Betting Tax (Amendment) Ordinance, 2009 after which the liability to deposit the entertainment tax is on BSNL, whether the BSNL is collecting the amount by itself or through any other agency.
4. From the averments made in the writ petition, we find that the BSNL has entered into a franchise agreement dated 7.12.2007 with M/s Smartt Digivision Private Limited for providing the content based services to its customers. As per information given by the Manager (Coordination) BSNL, it has offered four types of packages to the customers for admission to entertainment on payment under the IPTV Scheme, which includes the entertainment by way of ‘movies on demand, T.V channels and games etc.’ and for which the BSNL charges the monthly charges plus tax. The IPTV services are provided through telephone cables after installation of a splitter. The IPTV refers to a television connection that has capacity to transmit channels and movies on demand through telephone lines.
5. The customer's telephone line is connected to the television set by a cable through Splitter, ADSL, SED. ADSL is a type of Modem and SED is an electronic gadget which contains features of Set Top Box. The IPTV is an advance system of cable television network. Both cable television network and IPTV system consist of close transmission path and associated signal generation, control and distribution equipment to provide audio and video programme and films etc to its multiple subscribers for entertainment. In both cable television and IPTV system the transmission of programme is made by cables.
6. It is not denied that Cable Television Network (Regulation) Act, 1995 covers the activity. By Government Order dated 8.9.2008, issued by Government of India, Ministry of Information and Broadcasting, New Delhi, the IPTV operators are to be governed by the provisions of Cable Television Network (Regulation) Act, 1995.
7. The BSNL, in so far as the activity on IPTV system is concerned, is a cable operator within the meaning of Section 2(a) of the Cable Television Network (Regulation) Act, 1995 as the definition of the word ‘cable operator’ given in Section 2(a) of the Act of 1995 is the same as the definition given in Section 2(ee) of the U.P Entertainment and Betting Tax Act, 1979. The Act of 1979 also defines the words ‘admission to entertainment’, ‘entertainment’, and ‘payment for admission’ under Section 2(a), 2(g) and 2(i) of the Act of 1979. The petitioner's activity is covered within the definition as provided in the Cable Television Network (Regulation) Act, 1995 and UP Entertainment and Betting Tax Act, 1979.
8. A large number of cable operators, started receiving programmes from a broadcaster through the satellite or through authorized agents and started retransmitting the same with their own programmes for simultaneous reception either by multiple subscribers directly or through one or more local cable operators. In order to bring this activity and to redefine the word ‘place of entertainment’ to include ‘cable service’, and ‘direct to home service’ or ‘broadband service’, or any emerging transmission services by whatever name called under the U.P Entertainments and Betting Tax (Amendment) Ordinance, 2009 was enforced. The ordinance included for the first time ‘direct to home’, (DTH) service. It was defined under Section 2(f-1) to mean a system of distribution of multi-channel television programmes in Ku Band by using a satellite system, by providing television signals direct to the subscriber's premises without passing through an intermediary such as cable operator.
9. The petitioner may not be providing DTH services. Since it is providing entertainment through telephone lines, which are connected to the telephone set by cable through splitter-ADSLSED, the petitioner's activity of providing entertainment would squarely fall within the definition of the word ‘multi system operator’ by which it is broadcasting the programmes as a franchise and retransmitting the same including their own programmses simultaneously to multiple subscribers. In either case the BSNL performs the activities of cable operators and fall within the meaning of the word ‘multi system operator’ under Section 2(k-1).
10. The demand has been raised by the District Magistrate, Gautam Budh Nagar on the basis of information supplied by the petitioner and thus there can be no dispute, about the number of subscribers and the period for which the entertainment tax has been levied.
11. The petitioner having entered into the activity for providing entertainment through franchise, is liable to pay the entertainment tax, in accordance with the law.
12. The writ petition is dismissed.