Big Tree Entertainment Pvt. Ltd. And … vs State Of Maharashtra And 2 Ors. on 10 July, 2025

August 2, 2025

Bombay High Court

Big Tree Entertainment Pvt. Ltd. And … vs State Of Maharashtra And 2 Ors. on 10 July, 2025

1. By consent of the learned counsel for the parties, Writ
Petition No.497 of 2014, is taken as the lead petition. The learned
counsel also agree that a common judgment could dispose of these
petitions, since the legal issue involved in all three writ petitions is
the same.

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2. Rule and Interim relief was granted on 9 July 2014, staying
the operation and implementation of paragraph 3(d) of the
Government Order (G.O.) dated 4 April 2013 and clause (a) of the
Government Order (G.O.) dated 18 March 2014 issued by the
Revenue and Forest Department, Government of Maharashtra,
which prohibited the collection of service charges/convenience
fees on booking of computerized cinema tickets online.

Brief Facts:-

3. The Petitioner is engaged in the business of operating and
managing multiplex cinemas in India, including in the State of
Maharashtra.

4. On 4 April 2013, the impugned G.O. was issued, ordering
that no exhibitor, owner, or agent should charge or recover any
additional amount from viewers for online computerised ticket
sales. The said clause (d) of the G.O. reads as under:-

(d) At the time of selling the tickets in the Cinema theatres
through online computerized system, the Operator, Owner and
also the Agent shall not charge any additional service charge. For
this purpose, the Operator/Owner of the theatres shall not
recover the amount due and payable to the appointed agency.

5. On 18 March 2014, another G.O. was issued, which is also
impugned in the present petition. It is stated that all the theatre
conductors in the State should set up their own service/machinery
for online ticket sale within a period of four weeks from the date of
the order passed by the High Court in Public Interest Litigation
(PIL) No.66/2013. However, it was stated that, when making
tickets available through this machinery, no additional service

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charges should be recovered from the viewers. The said clause (a)
of the Government Order issued on 18 March 2014 reads as
under:-

“(a) All Cinema theatre Operators across the State shall set up
their own service/system for online sale of tickets, within a
period of 4 weeks, i.e. upto the date 1st April 2014 from the
date of passing of the Order i.e. from the date 4 th March 2014,
by the Hon’ble High Court and while making the tickets
available through this system, no additional service charges
shall be recovered from the viewers.”

6. It is the above two clauses, namely clause 3(d) of the G.O.
dated 4 April 2013 and clause (a) of G.O. dated 18 March 2014,
which are challenged in this petition.

7. On 29 December 2014, Section 2(b) of the Maharashtra
Entertainment Duty Act, 1923 (earlier known as Bombay
Entertainment Duty Act) which defines “payment for admission”

was amended and a proviso was inserted which provided that
service charges for providing facility of online ticket booking shall
be included in the “payment for admission”.

8. In the present petition, we are called upon to decide the
validity of the above two clauses of the G.O.s dated 4 April 2013
and 18 March 2014.

Submissions of the Petitioner:-

9. Mr. Thacker, learned counsel for the Petitioner, submits that
Respondents, by the impugned G.O. seek to restrain the Petitioner
from charging convenience fees on tickets booked online.
According to the learned counsel for the Petitioner, this would be

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violative of Article 19(1)(g) of the Constitution of India, since the
Respondents seek to regulate the consideration in the contract
between the private parties and impose unreasonable restrictions
on the right to carry on a legitimate business, which is
unconstitutional. He submitted that without a law, no restrictions
can be imposed on legitimate business. He further submits that
there is no power conferred upon the Respondents under the
Maharashtra Entertainment Duty Act, 1923 (ED) to issue such
G.O.s. He submits that even the impugned G.O.s do not specify the
source of power for issuing such orders, nor can any such source of
power be traced in the reply filed by the Respondents. He further
submits that such an order could not have been issued even under
Article 162 of the Constitution of India.

10. The learned counsel, in his written submissions, invoked
Article 14 of the Constitution of India on the ground that it would
lead to disparity between the State of Maharashtra and other
States, and consequently impugned the G.O.s as violative of Article
19(1)(g). He also states in these submissions that convenience fees
cannot be treated as ‘payment for admission’. We may observe that
on both these issues, no submissions were made in the course of
the arguments, but the same has been taken in the written
submissions, and therefore, the same are not considered by us.
Upon this being pointed out to the learned counsel for the
Petitioner, he readily accepted that such arguments should not
have been included in the written submissions.

11. The learned counsel for the Petitioner relies upon the
following decisions in support of his above submissions :-

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(i) Indian School, Jodhpur and Anr. Vs. State of Rajasthan 1

(ii) State of Bihar & Ors. Vs. Project Uchcha Vidya,
Sikshak Sangh & Ors.2

12. Mr. Thacker has not made any other submissions.

13. Mr. Rohan Rajadhyaksha, learned counsel for the Petitioners
in Writ Petition No.1755 of 2013, adopted Mr. Thacker’s
submission and also made additional submissions. He pointed out
that in the petitions he appears in apart from the Petitioner
companies, even the shareholder-directors are the Petitioners. He
squarely invoked the challenge based on Article 19(1)(g) by
submitting that the restriction imposed was unreasonable and
without the authority of the law.

Submissions of the Respondents:-

14. Mr. More, learned Additional Government Pleader for the
Respondents supported the impugned G.O.s by relying upon
Article 162 of the Constitution of India. In addition, he also relied
upon the reply filed to the petition in support of his submissions
and justified the issuance of the impugned G.O.s to the extent
challenged in this petition. He emphasised on the provisions of
Section 3(3)(e) of the ED Act to justify the impugned G.O.s which
prohibits collections specified therein. The learned counsel for the
Respondents also strongly relied upon the provisions of Section
4(2)(b) of the ED Act and submitted that the source of power to
issue prohibition from collecting convenience fee can be found in
the said section.

1     (2021) 10 SCC 517
2     (2006) 2 SCC 545
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15. We have heard the learned counsel for the Petitioner and the
learned counsel for the Respondents.

Background:-

16. The background of the issue raised for our consideration
needs to be noted. On 21 September 2000, the Respondents issued
a G.O. specifying a new administrative procedure because of the
computerised sale of tickets. The procedure dealt with various
aspects of printing cinema tickets, including what must be
specified on the tickets, maintaining ticket sales details, and other
related matters.

17. On 4 April 2013, the Respondents issued another G.O., after
referring to the above G.O. dated 21 September 2000, and
prescribed a revised procedure for the printing of cinema tickets,
the levy of an additional service charge, etc. In paragraph 2 of the
G.O. dated 4 April 2013, it is specified that the entertainment duty
would be chargeable on the charges of the spectacles, which shall
be included in these tickets for the levy of the entertainment duty.
In clause 3(d) of this G.O., it was mentioned that at the time of
selling the tickets in the cinema theatres through online
computerised system, the Operator, Owner and also the Agent
shall not charge any additional service charge and for this purpose,
the Operator/Owner of the theatres shall not recover the amount
due and payable to the appointed agency. In this petition, the
Petitioner challenges paragraph 3(d) of the G.O as mentioned
above.

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18. On 18 March 2014, the Respondents, after referring to the
above G.O. dated 4 April 2013, issued necessary guidelines to the
Operators of all cinema theatres to make an online sale
system/mechanism available for the sale of tickets. Clause (a) of
the G.O. dated 18 March 2014 stated that all cinema theatre
operators shall set up their own service or system for online ticket
sales, and while making tickets available through this system, no
additional service charges shall be recovered from viewers. The
G.O. dated 18 March 2014 refers to an order dated 4 March 2014
passed by the Co-ordinate Bench of this Court in PIL No.66 of
2013. The Petitioners have also challenged clause (a) of the G.O.
dated 18 March 2014, which is part of the present petition,
whereby the Respondents have directed theatre owners and others
not to recover additional service charges from viewers when
making tickets available through an online system.

19. We clarify that only clauses 3(d) of the G.O. dated 4 April
2013 and clause (a) of the G.O. dated 18 March 2014 are being
challenged before us. The subject matter of the present petition,
therefore, does not deal with the whole of the G.O.s dated 4 April
2013 and 18 March 2014.

Analysis & Conclusions:-

20. The Maharashtra Entertainment Duty Act, 1923 is enacted
for the levy of duty in respect of admission to entertainment in the
State of Maharashtra.

21. Section 2 defines various terms and Section 2(b) defines
“payment of admission” in relation to the levy of entertainment

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duty to include items specified therein. Section 3 is a charging
section which provides that duty shall be levied and paid to the
State Government, on payment for admission fixed by the
proprietor to any entertainment or exhibition by means of (DTH)
broadcasting service, etc., duty at the rate specified therein, the
rates being based on the area and the activity of entertainment.

22. Section 4 deals with the method of levy. It provides that no
person, other than a person who is to perform some duty in
connection with entertainment or duty imposed upon him by any
law, shall be admitted to any entertainment except with valid
printed tickets or complimentary tickets. Section 4B deals with the
assessment of entertainment duty. Section 4C to 4E deals with the
assessment, remission and refund of entertainment duty. Section 5
deals with punishment for non-compliance with the provisions of
the Act.

23. Section 6 deals with exemption from entertainment duty for
charitable or educational purposes. Section 7 empowers the State
Government to make rules for securing the payment of the
entertainment duty and for carrying into effect the provisions of
the Act. Section 8 deals with the powers of the authorities under
the Act to inspect places of entertainment.

24. Section 9 deals with recovery of entertainment duty as an
arrear of land revenue. Section 10 provides for delegation of
power by the State Government by general or special order.
Section 10-A deals with appeals and revision. Section 13 deals
with prohibition of levy of entertainment duty by local authorities.

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25. The short issue which is posed for consideration of the Court
is whether the impugned G.O.s insofar as it prohibits the theatre
owners and others to collect convenience fees on online ticket
booking is constitutionally valid.

26. We now propose to examine whether, under the ED Act,
there is a power given to the authority issuing the impugned G.O.s
to prohibit the collection of convenience fees on online booking.
We have already examined various sections of the ED Act above.
The only relevant Section which would require consideration
insofar as to ascertain the source of power to issue such G.O.’s
would be Section 7 and Section 10.

27. Section 7 empowers the State Government to make Rules for
securing the payment of the entertainment duty and for carrying
into effect the provisions of the ED Act. Section 7 to the extent
relevant reads as under:-

“7. Power to make rules.– (1) The State Government may make
rules for securing the payment of the entertainments duty and
generally for carrying into effect the provisions of this Act, and in
particular–

(b) for the use of tickets covering the admission of more than one
person and the calculation of the duty thereon; and for the
payment of the duty on the transfer from one part of a place of
entertainment to another and on payments for seats or other
accommodation ;

(c) for controlling the use of mechanical contrivances (including
the prevention of the use of the same mechanical contrivance for
payments of a different amount), and for securing proper records
of admission by means of mechanical contrivances;
(ca) for prescribing the amount and manner of furnishing a
security deposit and also the form in which the information is to be

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furnished to the Collector under clause (d) of sub-section (4) of
section 3;

(d) for the checking of admission, the keeping of accounts and the
furnishing of returns by the proprietors of entertainments in
respect of which the duty due is payable in accordance with the
provisions of section 4, sub-section (2); and for requiring such
proprietors to furnish security for payment of duty under sub-

section (2) of section 4 and prescribing conditions for forfeiture of
such security;

(da) for manner of serving notice under sub-section (2) of section
4B, and for the procedure to be followed for best judgment
assessment under that section;

(f) for prescribing the conditions and form for payment and
remission of duty payable under sub-section (3) of section 3;

(g) for the presentation and disposal of applications for
exemptions from payment of the entertainments duty or for the
refund thereof; and

(h) for the exemption for entertainments duty or from part or class
thereof soldiers, sailors and airmen belonging to the defence forces
of any nationality when attending an entertainment either in
uniform, or subject to production of identity card, in civilian dress;

(i) for the issue of passess by a proprietor of a place of
entertainment for the admission to the place of entertainment of
officers who have to perform any duty in connection with the
entertainment or any other duty imposed upon them by law;

(j) collection of entertainment duty on cable television including
Direct-to-Home (DTH) Broadcasting service by public auction;

(k) for prescribing the terms and conditions for exemption of duty
under sub-section (13A) of section 3.

(2) If any person acts in contravention of, or fails to comply with,
any such rules he shall, on conviction, 1be punished with
imprisonment for a term which may extend to six months or with
fine which may extend to one thousand rupees or with both.

28. On an examination of Section 7(1) and the sub-clauses
specified therein, we do not find any power conferred upon the
Respondents to pass the impugned G.O.s prohibiting collections of
convenience fees. The Rules are made for securing the payment of
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the entertainment duty and for carrying into effect the provision of
the said Act. The ED Act is enacted for levy and collection of the
entertainment duty by the State. Therefore, prohibiting collection
of convenience fee by the theatre owners and/or others from its
customers on online booking does not fall within the purview and
scope of the ED Act. By the impugned G.O.s, what is sought is to
prohibit the collection of convenience fees without anything more.
We have not been pointed out any provision of Section 7 which
empowers imposing such a prohibition, nor it is stated so in the
impugned G.O.s and affidavit-in-reply.

29. Section 10 which deals with delegation of powers by the
State Government provides that powers and duties conferred or
imposed upon the State may be exercised or performed by any
person whom the State by general or special order empowers on
its behalf. The said section only permits delegation of power and
that too only for the purpose of powers and duties conferred upon
the Act. We could not find any power in the Act, which permits the
Respondents to issue G.O.s prohibiting collection of convenience
fees on online ticket booking.

30. Therefore, in our view, on a reading of Sections 7 and 10 of
the ED Act, there is no power conferred on the Respondents to
issue G.O.s which prohibits collection of convenience fees by the
theatre owners and/or others from the customers on the
transaction of online booking of tickets.

31. The learned counsel for the Respondents has laid emphasis
on Section 3(3)(e) of the ED Act to justify the power to impose
restriction on collection of convenience fees. Therefore, it is
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necessary to analyse Section 3 and more particularly Section 3(3)

(e). Section 3 to the extent relevant reads as under :-

“3. Duty on payments for admission to entertainment.– [(1) There shall
be levied and paid to the State Government [on payment for admission
fixed by the proprietor] to any entertainment [expect in the case of video
games, exhibition by means of any type of antenna or cable television,
[or Internet Protocol Television,] or exhibition by means of Direct-to-
Home (DTH) Broadcasting service, bowling alley, go-carting, dance bar,
[permit room or beer bar with live orchestra, pub,] discotheque,
amusement park, water sports activity, pool game] [or tourist bus with
video facility] a duty (hereinafter referred to as “entertainments duty”)
at the following rates, namely :–

(a) where the payment * * * * is made for Admission to a racecourse
licensed under 11the Bombay Racecourses Licensing Act, 1912 (Bom. II
of 1912) [or under the Maharashtra Dog Racecourses Licensing Act,
1976 (Mah. XXXIII of 1976)] [100] per cent. of such payment, and
1[(b) in the case of every entertainment, other than exhibition by
cinematograph including video exhibition, video games, exhibition by
means of any type of antenna, cable television, [Internet Protocol
Television,] exhibition by means of Direct-to-Home (DTH) Broadcasting
service, bowling alley, go-carting, dance bar, [permit room or beer bar
with live orchestra, pub,] discotheque, amusement park, water sports
activity, pool game or tourist bus with video facility, within the limits of,

—

TABLE

Serial Area [Rate of
No. entertainment duty
on payment for
admission fixed by
the proprietor
(1) (2) (3)
1 Brihan Mumbai Municipal Corporation. 25 per cent.
2 All Mumbai Corporations (other than 20 per cent.

Brihan Mumbai Municipal Corporations and
Cantonments areas.

3 “A” Class, “B” Class and “C” Class Municipal 15 per cent
Councils.

4 Any other areas not covered by entries 1 to 3 [10 per cent]
above.

[Provided that, in the case of the cabaret or discotheque entertainment,
fifty per cent. of the total payment charged by the proprietor per person
per show, whether with or without eatables or beverages and whether

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regular tickets are issued or not, for a admission to such entertainment,
shall be deemed to be the payment for admission and duty shall be levied
thereon accordingly under this clause :

Provided further that, the entertainment duty in respect of an
amusement park shall be 15 per cent. of the payment made for
admission to the amusement park, including payment made for
admission for games and rides, whether charges separately or not:]
[Provided also that, the entertainment duty in respect of water sports
activity, by whatever name called, whether situated within or outside the
amusement park, shall be [15 per cent.]of the payment made for
admission to the water sports activity including payment made for
admission for water games and sports, whether charged separately or
not:]
[Provided also that, the entertainment duty in respect of the Award
Function organised only for invitees, without selling tickets, shall be 12.5
per cent. of the total sponsorship amount received for such function.]

(c) in the case of exhibition by cinematograph including video exhibition
other than exhibition by means of any type of antenna or cable television
within the limits of,–

TABLE

Serial Area Rate of
No. entertainment
duty on payment for
admission fixed by
the proprietor
(1) (2) (3)
1 Within the limits of Brihan Mumbai 45 per cent.

             Municipal       Corporation.
    2        Within the limits of all other Municipal             40 per cent.
             Corporations and Cantonments.
    3        Within the limits of "A" Class                        34 per cent
             Municipal Councils.
    4        Within the limits       of    "B"    Class            28 per cent
             Municipal Councils.
    5        Within the limits       of    "C"    Class            22 per cent
             Municipal Councils.
    6        Any other areas not covered by entries                15 per cent
             (1) to (5) above.

[(1A) Notwithstanding anything contained in clauses (a) and (b) of
section 2 or in any other provisions in relation to the admission on
payment contained in this Act, there shall be levied and paid to the State
Government entertainments duty in the case of video game [at the rates
specified in the TABLE below, namely :–]
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TABLE
Serial Area Type of Video
Rate of
No. Game Machine
entertainment,
duty per
month, per
machine (in
Rupees)
(1) (2) (3) (4)
1 Within the limits of (1) Machine operated 1,000
Brihan Mumbai by one person
Municipal Corporation.

                                     (2) Machine operated
                                     by     two    persons      2,000
                                        simultaneously.
     2        Within the limits of all (1) Machine operated                   75
              Municipal Corporations by one person.
              other     than     Brihan (2) Machine operated
              Mumbai          Municipal by     two     persons             1,500
              Corporation               simultaneously.
 3            Within the limits of all (1) Machine operated                        500
              other areas not covered   by one person.



 Serial                Area              Type of Video Game Rate                of
 No.                                     Machine                 entertainment,
                                                                 duty per month,
                                                                 per machine (in
                                                                 Rupees)
  (1)                   (2)                       (3)                    (4)
 1           By entries 1 and 2 above    (1) Machine operated          1,000
                                         by     two      persons
                                         simultaneously.

[(1AA) In computing the duty and the surcharge under this Act, a
fraction of a rupee less than 5 paise, or which is not a multiple of 5 paise,
shall be rounded off to 5 paise, or to next higher multiple of 5 paise, as
the case may be.]
(2) Where the payment for admission to an entertainment is made by
means of a lump sum paid as a subscription or contribution to any
society, or for a season ticket or for the right of admission to a series of
entertainments or to any entertainments during a certain period of time,
or for any privilege, right, facility or thing combined with the right to
admission to any entertainment or involving such right of admission
without further payment or at a reduced charge, [the entertainment duty
shall be levied and paid on 50 per cent. of such lump sum at the rates
specified in clause (b) of sub-section (1).]
(3)(a) In lieu of the tax payable under clause (c) of sub-section (1) in the
case of *** video exhibition [but excluding exhibition by means of any
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type of antenna or cable television] held in the places of entertainment
specified in column (2) of the Table below and situated in the areas
specified in column (1) of the said Table, the proprietor of such
exhibition may, subject to such conditions as may be prescribed, pay the
amount of duty to the State Government every week as specified in the
corresponding entry in column (3) thereof.

                                       TABLE
 Serial                        Area                         Rate of entertainment
  No.                                                       duty on payment for
                                                            admission fixed by
                                                            the proprietor
  (1)                         (2)                                      (3)
   I.       (A) Within the limits of the areas of all       30 per cent. of the gross
            Municipal Corporations, Cantonments of          collection capacity for a
            Pune, Solapur, Dehu Road, Deolali, Kamptee      show multiplied by 72
            and Kirkee;                                     per cent. of the shows
                                                            actually held.
            (B) Within the limits of the areas of cities

and towns having population of one lakh 30 per cent. of the gross
fifty thousand and above. collection capacity for a
show multiplied by 68
per cent. of the shows
actually held.

II Within the limits of the areas of cities towns 20 per cent. of the gross
having population above twenty-five collection capacity for a
thousand but below one lakh fifty thousand. show multiplied by 72
per cent. of the shows
actually held.

III Any other areas with population upto 15 per cent. of the gross
twenty- five thousand and below. collection capacity for a
show multiplied by 60
per cent. of the shows
actually held.]

Explanation.–For the purpose of this sub-section, “gross collection
capacity” in relation to a means the notional aggregate
of all payments for admission for a show inclusive of the duty leviable
under clause (c) of sub-section (1) if all the seats and other
accommodation available and provided for the audience in the as specified in the licence issued by the Licensing Authority
under the Maharashtra Cinemas (Regulation) Rules, 1966, were
occupied by spectators.

[(a-a) In lieu of the tax payable under clause (c) of sub-section (1), in
the case of exhibition by cinematograph but excluding video exhibition
and exhibition by means of any type of antenna or cable television held
in the places of entertainment specified in column (2) of the Table

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below, the proprietor of such exhibition may, subject to such conditions
as may be prescribed, pay the amount of duty to the State Government
every week as specified in the corresponding entry in column (3) of the
said Table.

                                       TABLE
 Serial                     Area                       Amount of entertainments
  No.                                                  duty
  (1)                      (2)                                     (3)
           Within the limits of 'A' Class Municipal    30 per cent. of the houseful
           Councils.                                   tax capacity of a show
                                                       multiplied by the number of
                                                       shows actually held.

 2         Within the limits of 'B' Class Municipal     24 per cent. of the houseful
           Councils.                                   tax capacity of a show
                                                       multiplied by the number of
                                                       shows actually held.
 3         Within the limits of 'C' Class Municipal    18 per cent. of the houseful
           Councils.                                   tax capacity of a show
                                                       multiplied by the number of
                                                       shows actually held.
 4         All other areas not covered by entries      12 per cent. of the houseful
           1 to 3 above but, excluding the areas of    tax capacity of a show
           Municipal       Corporations        and     multiplied by the number of
           Cantonments.                                shows actually held.

Explanation.–For the purposes of this sub-section, “housefull tax
capacity”, in relation to a cinematograph exhibition, means the
notional aggregate of duty for a show leviable under clause (c) of sub-
section (1) if all the seats and other accommodation available and
provided to the audience in the cinema theatre as specified in the
licence issued by the Licensing Authority under the Maharashtra
Cinemas (Regulation) Rules, 1966, were occupied by spectators.]
[(b) The duty leviable under this sub-section shall be recoverable
weekly in accordance with the rates specified in column (3) of the
Table to clause (a) [or clause (a-a), as the case may be,] from the
proprietor taking into consideration the actual number of shows held
by him in each week.]
[Explanation.–For the purpose of this clause, actual number of shows
held by the proprietor in a week shall not include the shows of a tax
free film held by him in the week.]

(c) Any proprietor who opts to pay duty under this sub-section shall
apply in the prescribed form to the prescribed officer who permission
to pay the duty under this sub-section.

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(d) After the determination of gross collection capacity of a , no change or
modification either in the number of seats or accommodation or in the
rates of payment for admission to such exhibition shall be made,
unless the proprietor has given fifteen day’s notice thereof to the
prescribed officer and, until the gross collection capacity of is re-determined the proprietor shall pay the duty as previously
fixed.]

(e) No proprietor of a to which this sub-section is applicable shall collect or cause
to be collected any amount either by way of duty or otherwise in
excess of the payment for admission taken into consideration for
calculating the gross collection capacity [or houseful tax capacity, as
the case may be,] of such exhibition.

(f) Notwithstanding anything contained in this sub-section, where a
cinematograph film is allowed exemption from, or reduction in, the
payment of duty under section 6, the rates of payment for admission
shall be reduced in respect of each admission to the extent of the duty
exempted or reduced in respect of such payment. Where a proprietor
does not reduce the rates of payment for admission, he shall, in
addition to any other penalty under this Act, be liable to pay duty as if
no exemption or reduction from the payment of duty was made under
section 6.

(g) In calculating the reduction in the rates of payment for admission
under clause (f), the gross collection capacity [or houseful tax
capacity as the case may be,] for the purpose of payment of such
reduction of duty shall be the same as specified in the Explanation to
clause (a) [or clause (a-a), as the case may be].

(h) The option permitted under this sub-section shall be exercised
once in a calendar year and the proprietor shall not be permitted to
withdraw the same during that calendar year.

(i) No proprietor of [Video exhibition or Cinematograph exhibition, as
the case may be,] who fails to pay duty under this sub-section shall
conduct such [Video exhibition or Cinematograph exhibition, as the
case may be,] unless he gives security of such amount and in such
manner as the State Government may, by general or special order,
specify for the payment of duty under this sub-section.

(j) Notwithstanding anything contained in this sub-section, in case
where no show has been held in the place of exhibition [specified in
the Tables under clause (a) or (a-a), as the case may be,] continuously
for the entire week, the Commissioner shall after such enquiry as he
may deem necessary and subject to such conditions as may be

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prescribed, remit the duty payable under this sub-section as relates to
the exhibition concerned for the week during which no show has been
held.]

32. Section 3 of the ED Act is a charging section for levy and
payment of entertainment duty on payments for admission to
entertainment.

33. Section 3(1) provides for rates of entertainment duty on
various items of entertainment based on the area in which such
entertainment takes place. For example, in the case of
entertainment specified in Section 3(1)(b), the rate of
entertainment duty on payment for admission, within the area of
Brihanmumbai Municipal Corporation, is 25% and other Municipal
Corporations are 20%. Section 3(1)(c) provides for the rate of
entertainment duty on exhibition by cinematograph including
video exhibition. The rate is 45% if the exhibition is within the
limits of Brihanmumbai Municipal Corporation and 40% if within
the limits of other Municipal Corporations. Section 3(1A) provides
for a fixed amount of entertainment duty on video game machines.
Section 3(2) provides for the rate of entertainment duty with
respect to lump sum paid as a subscription or for a season ticket
etc.

34. Section 3(3)(a) which deals with video exhibition provides
for an alternative mechanism of levy of entertainment duty in lieu
of Section 3(1)(c). Under this Section the amount of duty
calculated is based on a notional formula provided under the table
to Section 3(3)(a). For example, if the entertainment is within the
limits of areas of all Municipal Corporations, Cantonments of

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Pune, Solapur etc., the amount of duty is calculated at 30% of the
gross collection capacity for a show multiplied by 72% of the
shows actually held. Explanation to Section (3)(3)(a) defines
“gross collection capacity” to mean notional aggregate of all
payments for admission for a show inclusive of the duty leviable
under clause (c) of Sub-Section (1), if spectators occupied all the
seats and other accommodation available.

35. Section 3(3)(a-a) of the ED Act provides for calculation of
entertainment duty with respect to cable television and the
calculation is based on a certain percentage of the “houseful tax
capacity” of a show multiplied by the number of shows actually
held. Explanation to Section 3(3)(a-a) defines “houseful tax
capacity” to mean notional aggregate of duty for a show leviable if
all the seats were occupied by the spectators.

36. Section 3(3)(b) provides that duty calculated under Section
3(3)(a) and (a-a) shall be recoverable weekly in accordance with
the rates specified in the table from the proprietor taking into
consideration the actual number of shows held in each week.

37. Therefore, what Section 3(3) and its various clauses
mentioned above provides for, is an alternate mechanism for
calculation of entertainment duty based on notional gross
collection or houseful tax capacity defined therein rather than a
certain percentage of the admission fee. Merely, because the
notional gross collection is considered as a basis for calculating the
amount of duty, does not mean that the Respondents have the
power to prohibit collection of convenience fee by issuing G.O.s.

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38. Section 3(3)(e) provides that no proprietor of a video
cinema or a cinema theatre to which the sub section is applicable
shall collect any amount either by way of duty or otherwise in
excess of the payment for admission taken into consideration for
calculating the “gross collection capacity” or “houseful tax
capacity” as the case may be of such exhibition. In our view, if
according to the Respondents Section 3(3)(e) empowers them to
prohibit collections of convenience fees then there was no need for
issuing G.O.’s since the provision of Section 3(3)(e) was in
existence much before the date on which the impugned G.O.s were
issued.

39. In any case, in our view, section 3(3)(e) only prohibits
collection of an amount more than what was considered for
calculating gross collection capacity or houseful tax capacity. For
example, if for the purpose of “gross collection capacity” or
“houseful tax capacity” payment for admission is considered at
Rs.100/- and the percentage specified in Section 3(3)(a) and (a-a)
is applied to arrive at the amount of duty, then in such a case after
arriving at the said amount of duty on the basis of Rs.100/-, the
video cinema or cinema theatre cannot recover more than
Rs.100/-. This is so because the amount of duty is calculated on
the premise that Rs.100/- is the payment for admission. The said
Section 3(3)(e) does not empower the Respondents to issue G.O.s
to provide for prohibition on collection of convenience fee. It is
one thing to say that convenience fee collected would form part of
“gross collection capacity” for arriving at the amount of duty, and
it is another thing to say that the theatre owner would not collect

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convenience fee at all. Any such prohibition restricting collection
of convenience fee per se cannot be justified by taking recourse to
Section 3(3)(e). Therefore, the contentions raised by the learned
counsel for the Respondent by taking the aid of this provision
cannot be accepted.

40. Section 4 provides for a method of levy. Section 4(1)
provides that other than a person who has to perform some duty in
connection with an entertainment or duty imposed under any law,
no person shall be admitted to any entertainment except with a
valid printed ticket or complementary ticket. Section 4(2) provides
for an application to be made to the prescribed officer by a
particular day for payment of the entertainment duty and on such
application being made, the State Government by general or
special order issued on that behalf allows the proprietor to pay the
amount of entertainment duty. Clause (b) on which the learned
counsel for the Respondent has placed reliance only states that the
same shall be in accordance with returns of the payment for
admission to the entertainment and on account of the duty. The
phrase “on such conditions” in Section 4(2)(b) would mean
conditions relating to payment of entertainment duty and not
condition prohibiting collection of convenience fees. In our view,
Section 4(2)(b) of the ED Act only deals with methods of
collecting the entertainment duty but it does not empower the
Respondents to issue a G.O. prohibiting collection of convenience
fees as already observed by us above. The issue before us is not the
collection of entertainment duty on the convenience fee but the
issue before us is prohibition issued by the G.O.s from collecting

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the convenience fees. Therefore, we do not accept this submission
of the Respondent that by virtue of Section 4(2)(b) the
Respondents are empowered to issue the impugned G.O. to the
extent challenged herein.

41. In Shri Durga Chand Kaushik and Anr. Vs. Union of India 3,
an issue arose before the Delhi High Court under the Delhi
Cinematograph Rules, 1953, that for obtaining the licence, the
condition of fixing the rates of admission to the auditorium was
ultra-vires. The Delhi High Court on perusal of various Sections of
the Cinematograph Act, 1952 held that there is no provision which
provides for price control of cinema tickets and the regulation of
the rates of admission to cinema auditoriums is not a policy stated
in the said Act. The Court further observed that it is neither a
purpose sought to be achieved by the said Act nor means to
achieve any other purpose stated in the Act. The Court observed
that even if the power to grant the licence is wide and
unrestricted, it has to be read in the context in which they appear.
It will mean only such conditions and restrictions such as safety of
persons attending exhibitions of film etc. and it cannot include
price control of cinema tickets. In our view, in the present case
also, the object for which ED Act is enacted and the Rules made
thereunder, the Respondents do not have any power to prohibit
the Petitioners from recovering convenience fees. The said
restriction is neither for securing the payment of the duty nor for
carrying into effect the provisions of the Act.




3 ILR (1979) 2 Del. 730
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42. We have not been shown any provision of the ED Act, which
empowers the Respondents to regulate the price to be recovered
from the customer. On a reading of Section 3 as a whole and read
with definition of “payment of admission” as defined by Section
2(b) of the ED Act, we do not find any provision which empowers
the Respondents to impose any restriction or prohibition on
collection of convenience fees. Now we propose to analyse Section
2(b) of the ED Act.

43. Section 2(b) of the ED Act reads as under :-

(b) “payment of admission” [in relation to the levy of entertainments
duty,] includes,–

(i) any payments made by a person who, having been admitted to one
part of a place of entertainment, is subsequently admitted to another
part thereof for admission to which a payment involving duty or more
duty is required ;

(ii) any payment for seats or other accommodation in a place of
entertainment;

(iii) any payment for a programme or synopsis of an entertainment;

[* *]
(iii-a) any payment made for the loan or use of any instrument or
contrivance which enables a person to get a normal or better view or
hearing, of the entertainment which, without the aid of such
instrument or contrivance, such person would not get; [* * *]

(iv) any payment, by whatever name called for any purpose
whatsoever, connected with an entertainment, which a person is
required to make, in any form as a condition of attending, or
continuing to attend the entertainment, either in addition to the
payment, if any, for admission to the entertainment or without any
such payment for admission ;

(v) any payment made by a person for admission to a video exhibition
irrespective of whether any eatables or beverages or both are or are
not provided to him against such payment;]

(vi) any payment made by a person by way of contribution or
subscription or installation connection charges or any other charges
collected in any manner whatsoever for television exhibition with the

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aid of any type of antenna with a cable network attached to it or cable
television [* *]

(vii) any payment made by person to the proprietor of a Direct-to-
Home (DTH) Broadcasting Service by way of contribution,
subscription, installation or connection charges, or any other charges
collected in any manner whatsoever for Direct-to-Home (DTH)
Broadcasting Service with the aid of any type of set top box or any
other instrument of like nature which connects TV set at a residential
or non-residential place of connection-holder directly to the Satellite ;
and
[(viii) any payment made by way of sponsorship amount for a
programme which is organised only for invitees, without selling
tickets ;

[Explanation.– For the purposes of this sub-clause any expenditure
incurred by any co-operative society including a co-operative housing
society or by the management of, any factory, hotel, lodge, bar, permit
room, pub, or by a person or group of persons, for the purchase of any
type of antenna or any other apparatus for securing transmission
through the cable network or cable television attached to it, for its
members, or for workers or customers or for himself or themselves, as
the case may be, shall be deemed to be the payment made under this
sub-clause for the television exhibition with the aid of any type of
antenna with cable network attached to it or cable television :]
Provided that, where regular tickets are not issued by the proprietor
for admission to a video exhibition and the amount charged to a
person admitted to the exhibition is inclusive of the price for any
eatables or beverages or both, then seventy-five per cent., of such
amount shall be deemed to be payment for such admission :]
[Provided further that, subject to the provisions of sub-section (13) of
section 3] any payment not exceeding [seven rupees in case of
ordinary and air-cooled cinemas and nine rupees in case of air-
conditioned cinemas] per ticket it charged proprietor towards service
charges separately the proprietor shows to the satisfaction of the
prescribed officer as defined in the rules made under this Act that the
amount of such service charges is spent by him towards maintenance
and providing facilities and safety measures in the permanent cinema
1[or quasi-permanent cinema] in addition to those required under the
provisions of the Bombay Cinemas (Regulation) Act, 1953 (Bom. XI of
1953) and the Maharashtra Cinemas (Regulation) Rules, 1966, or any
other law for the time being in force, such service charges shall not be
included in the payment for admission;

[Provided also that, the proprietor shall submit, before the 30 th
September of every year, to the prescribed officer the audited

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accounts of the service charges collected and spent by him towards
maintenance and providing facilities and safety measures as provided
in the second proviso. The proprietor shall be allowed to carry
forward unspent amount of service charges for 4[four financial years]
immediately following the financial year in which the amount has
remained so unspent. If the prescribed officer on perusal of the
accounts is satisfied at the end of the admissible period for which the
proprietor is allowed to carry forward the unspent amount of the
service charges or part thereof, that, the said amount has not been
spent towards the maintenance and providing facilities and safety
measures as provided in the second proviso, then the said amount of
service charges or part thereof, not so spent shall be included in the
payment for admission and thereupon, the provisions of sub-sections
(2) to (5) of section 4-B shall, mutatis mutandis, apply for the purpose
of assessment of the entertainments duty at the rate specified in
clause (c) of sub-section (1) or clause (a) of sub-section (3) of section
3 of this Act:

[Provided also that, the proprietor shall be allowed to set off the
amount spent in a financial year in excess of the amount collected as
service charges in that financial year towards maintenance and for
providing facilities and safety measures as provided in the second
proviso, against the amount of the service charges which will be
collected during the next four financial years immediately following
the financial year in which the excess amount is spent:

[Provided also that, any payment not exceeding 7[one rupee] per
ticket if charged by the proprietor of a touring cinema towards service
charges, separately and the proprietor of such touring cinema shows
to the satisfaction of the prescribed officer (as defined in the rules
made under this Act), that such payment made is spent by him during
the license period towards maintenance and providing facilities and
safety measures in such touring cinema, as specified by the State
Government (by notification in the Official Gazette issued in this
behalf), in addition to those required under the provisions of the
Bombay Cinemas (Regulation) Act, 1953 (Bom. XI of 1953) and the
Maharashtra Cinemas (Regulation) Rules, 1966, or any other law for
the time being in force, in that case, such payment towards service
charges shall not be included in the payment for admission, subject to
the condition that the proprietor of such touring cinema shall submit,
to the prescribed officer within a period of one month from the date
of expiry of license period, the audited accounts of the service charges
collected and spent by him towards the maintenance and for
providing the additional specified facilities and safety measures for
such touring cinema:

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[Provided also that, any payment of 10[one rupee] per ticket if
charged by the proprietor of a permanent or quasi-permanent cinema
having computerised ticket terminal network with the help of
information technology through satellite, towards additional service
charges, separately in that case, such payment towards additional
service charges shall not be included in the payment for admission ;
[Provided also that, any payment not exceeding ten rupees or any
such amount as may be specified by the State Government, from time
to time, by notification in the Official Gazette, per ticket if charged by
the proprietor himself or through any service provider towards service
charges, separately for providing facility for online ticket booking in
all entertainments, in that case, such payment towards such service
charges shall not be included in the payment for admission, subject to
the condition that the proprietor and the service provider shall submit
the data of online tickets sold per month, and online internet handling
fee or convenience charges charged thereof and also the certified
copies of agreement for online ticket booking services to the Collector
before seventh day of every succeeding month; and any amount of
such service charges in any form more than ten rupees or more than
such amount as may be specified by the State Government, from time
to time, by notification in the Official Gazette, levied by the proprietor
himself or through any service provider, for providing facility for
online ticket booking, shall be included in the payment for admission.
Explanation.–For the purposes of this proviso, the expression “service
provider” means and includes any person or any company or agent
who is authorized or permitted by the proprietor of any entertainment
to book online tickets through their website or portal or by any other
means.

44. Section 2(b) which defines “payment of admission” is an
inclusive definition and specifies various items which can be
considered as payment of admission. For example, any payment
made by way of sponsorship amount for a program which is
organized only for invitees without selling tickets, in such a case
sponsorship amount will be treated as payment of admission.

Similarly, any payment for seats or other accommodation in a
place of entertainment will be treated as payment of admission. All
the instances specified in Section 2(b) only provides as to what

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should be “payment of admission” on which the rate of duty
specified in Section 3 can be imposed. Section 2(b) does not
empower the State to provide as to what should be collected and
what should not be collected from the customer. What it provides
is that the collection mentioned therein would be treated as
“payment of admission” and the levy of duty under Section 3
would thereafter be on such payment of admission. Therefore, in
our view, the Respondents cannot take the aid of Section 2(b) of
the ED Act to confer upon themselves the power to issue G.O.s for
prohibiting the collection of the convenience fees.

45. We have perused the Bombay Entertainments Duty Rules,
1958 but could not find any source empowering Respondents to
issue such G.O.s to regulate or prohibit collection of convenience
charges/fees. The learned AGP has also not pointed out any Rule
in this direction; Rules deal with purchase and issue of stamps,
what should be printed on ticket, payment of duty, exemptions,
issues relating to season and complimentary ticket, inspection etc.
Therefore, even on this count we could not uphold the impugned
G.O.s to the extent challenged before us.

46. Now we propose to examine whether such G.O.s, which
prohibit the collection of a convenience fee, are violative of Article
19(1)(g) of the Constitution.

47. On 9 July 2014, this Court, while granting interim relief in
paragraph 7, recorded the submission of learned Advocate General
that the State Government is in the process of considering the
introduction of a suitable ordinance or statutory rules in order to

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deal with the situation, and it is likely to take a few weeks.
Subsequently on 29 December 2014, an amendment was made to
Section 2(b) of the ED Act providing for such convenience fees to
be treated as payment towards admission. Therefore, this supports
the case of the Petitioner that the intention of the legislature was
to treat convenience fees as “payment towards admission” by
bringing suitable law, but the G.O. did not state so, and on the
contrary it prohibited collection of convenience fees, which has
been observed by us above is not in accordance with the provisions
of the Act.

48. Article 19(1)(g) of the Constitution of India provides for
protection of the right to practice any profession or to carry on any
occupation, trade or business. Article 19(6) of the Constitution of
India provides that nothing in sub-clause (g) shall prevent the
State from making any law imposing, in the interest of general
public, reasonable restrictions on the exercise of the right
conferred by the State and in particular preventing the State from
making any law relating to professional or technical qualifications
necessary for practicing any profession or for carrying on any
occupation, trade or business or the carrying on by the State, or by
a corporation owned or controlled by the State of any trade,
business, industry or service, whether to the exclusion, complete or
partial or otherwise.

49. The restriction/prohibition imposed by the G.O.s impugned
in the present petition interferes with the right of the Petitioner to
carry on business, occupation or trade inasmuch as by the
impugned G.O.s consideration to be agreed upon between two
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private parties is sought to be regulated or interfered with and the
Petitioners are barred from charging them any amount for the
business they are engaged in. There was no argument about such
business not being legitimate business or res extra commercium.
Such a course of action on the part of the State cannot be
permitted except in cases where there is a Statute or Law which
governs the regulation of the price or consideration. For example,
the Essential Commodities Act, 1955, the Defence of India Act,
1931, etc.

50. Admittedly, we have not been shown any Statute or Law
which empowers the State to interfere with the charge of the
consideration for undertaking this business. No statute regulating
the collection of convenience fees was pointed out to us. On the
contrary, Section 2(b) of the ED Act, indicates that theatre owners
and other persons can charge any amount to their customers. Still,
such amount will be considered for the purpose of determining
and computing the duty. Therefore, there is no restriction which
was shown to us under the ED Act for collecting the convenience
fees. To impose any restriction upon a legitimate business, firstly,
there must be a law enacted by a competent legislature. Secondly,
any restriction imposed by the law must be based on the grounds
specified in Article 19(6) and must also pass the test of
reasonableness. Article 19(6) of the Constitution of India, would
apply only if the restriction is imposed by an enactment or law. In
the absence of any such law prohibiting the collection of
convenience fees, issuing impugned G.O.s cannot be saved by
provisions of Article 19(6) inasmuch as the impugned G.O.s are

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neither laws enacted by the legislature, nor is any source of power
under which they are issued disclosed or discernible.

51. The Petitioner’s business model is not shown to be
illegitimate; the charge being collected on such business, therefore,
cannot be barred without enacting any law and merely by issung
the impugned G.O.s. This would amount to imposing unreasonable
restrictions on the right to carry on business without enacting any
law. This is not a case where the duty on admission fee to the
entertainment is being regulated, but what is sought to be
achieved by the impugned G.O. s is to prohibit the Petitioners from
collecting convenience fees which would be outside the realm of
the ED Act.

52. As observed above, we have not been shown any law on the
basis of which the Respondents can invoke Article 19(6) to justify
the issuance of impugned G.O.s. In our view and on a conjoint
reading of Articles 19(1)(g) and 19(6) where power is conferred
on the executive to regulate and to control the exercise of the
freedom conferred by Article 19(1)(g), it is necessary that the law
which does, should either lay down the circumstances or grounds
on which the discretion is to be exercised. In other words, the Act
must furnish sufficient guidance to the executive in the matter of
the exercise of discretionary power. It is enough if such guidance
could be found on a fair reading of the Act, and the other relevant
circumstances. In the instant case, we have already observed above
that in the ED Act there is no power shown to us by which the
impugned G.O.’s prohibiting collection of convenience fee could be
issued.

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53. The legislation touching upon price control in India has
always been specific, eloquent and reasonable, even though
important, restriction on the right to carry on business has never
been sought to be achieved indirectly or by implication and
without setting out a statement of the policy of the legislature on
this behalf. Infact, numerous price control orders made in India
derive their authority from one or the other of the enactments and
their validity has always been judged, having regard to the
provisions of this principal enactments.

54. The law is now well settled that any law which is made
under clauses (2) to (6) of Article 19, to regulate the exercise of
the right to the freedom guaranteed by Article 19(1) must be ‘a
law’ having statutory force and not a mere executive or
departmental instruction. Applying the said well settled principle
to the facts of the present case, we have no doubt that the
impugned G.O.s inasmuch as they prohibit the Petitioner from
collecting the convenience fees does not have any statutory basis
and, therefore, cannot form the foundation of any action aimed at
denying fundamental right under Article 19(1)(g).

55. Therefore, in our view, the impugned G.O.s, to the extent
that they prohibit collection of convenience fees on the tickets
booked online, violates Article 19(1)(g) of the Constitution of
India, and therefore, the impugned G.O.s to the extent challenged
herein is required to be quashed and set aside.

56. We now propose to examine whether the impugned
notification can be saved by invoking Article 162 of the
Constitution of India.

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57. Article 162 of the Constitution of India provides that subject
to the provisions of this Constitution the executive power of a
State shall extend to the matters with respect to which the
legislature of the State has power to make laws. Therefore, the
pre-condition for invoking Article 162 of the Constitution is the
existence of a law under which such directions can be issued. In
the instant case before us, there is no enactment shown to us
which empowers the State to regulate the consideration between
the theatre owner and its customer. There is no price control order
governing the transaction under consideration or price control
order issued under a particular Act or law. Therefore, in the
absence of any Act regulating the private contract between the two
parties, the Respondents would not be justified in taking the
shelter of Article 162 of the Constitution of India to save the
impugned G.O.s from being quashed and set aside.

58. The Hon’ble Supreme Court in the case of State of Bihar
(supra) in paragraph 69 has observed that the requirement of law
for the purpose of clause (6) of Article 19 of the Constitution of
India can by no stretch of imagination be achieved by issuing a
circular or a policy decision in terms of Article 162 of the
Constitution or otherwise. Such a law must be one enacted by the
legislature.

59. In Rai Sahib Ram Jawaya Kapur & Ors. vs. State of Punjab 4,
the Hon’ble Supreme Court observed as under:-

“17.Specific legislation may indeed be necessary if the Government
require certain powers in addition to what they possess under

4 AIR 1955 SC 549
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ordinary law in order to carry on the particular trade or business.
Thus when it is necessary to encroach upon private rights in order
to enable the Government to carry on their business, a specific
legislation sanctioning such course would have to be passed.”

60. Therefore, the G.O.s issued by the Respondent without
fulfilling the mandatory provisions of Article 162 of the
Constitution cannot be categorised as a decision by a State and,
therefore, it cannot be said that the State is empowered to issue
the G.O.s prohibiting collection of convenience fee.

61. We draw support for our above analysis from the decision of
the Supreme Court in the case of Indian School, Jodhpur & Anr.
vs. State of Rajasthan & Ors.5 and more particularly paragraphs
113 to 117 which read as under:-

“113. A fortiori, even the argument of the Respondents relying
upon the existence of executive power under Article 162 of the
Constitution, ought to fail. It is well-established position that the
executive power of a State under Article 162 of the Constitution
extends to the matters upon which the legislature of the State
has competency to legislate and is not confined to matters over
which legislation has already been passed. It is also well settled
that the State Government cannot go against the provisions of
the Constitution or any law. The subject of determination of fee
structure and whether it entails in profiteering, is already
covered by the legislation in the form of the 2016 Act and the
Rules framed thereunder. It is not as if there is no enactment
covering that subject or any incidental aspects thereof. The 2016
Act, which in itself is a self-contained code on the said subject,
not only provides for the manner in which the school concerned
ought to finalise its fee structure, but also declares that the fee
so finalised either by consensus or through adjudication mode
shall be binding on all concerned for a period of three academic
years. In any case, determination of fees including reduction
thereof is the exclusive prerogative of the management of the
private unaided school. The State can provide independent
5 (2021) SCC OnLine 359
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mechanism only to regulate that decision of the school
management to the extent that it does not result in profiteering
and commercialisation.

114. Viewed thus, reliance placed on Union of India v.
Moolchand Kharaiti Ram Trust will be of no avail. In that case,
the hospitals were obligated to render free treatment in lieu of
allotment of government land to them for earning no profit and
held in trust for public good. The Court opined that there was
no necessity of enacting a law and the policy formulated by the
State Government in that regard cannot be disregarded.

115. In the present case, we need not dilate on the factum as to
whether the Director, Secondary Education could have issued
such a policy document in exercise of executive power under
Article 162 of the Constitution, which power exclusively vests in
the State Government alone. The fact remains that the direction
issued in terms of impugned order dated 28-10-2020, on the
face of it, collide with the dispensation specified in the 2016 Act
in the matter of determination of school fees and its binding
effect on all concerned for a period of three academic years,
without any exception. The fact that in the proceedings before
the High Court the State Government had ratified the impugned
order, does not take the matter any further. In that, there can be
no ex post facto ratification by the State Government in respect
of subject, on which, it itself could not issue such direction in
law.

116. Even the exposition in Ram Jawaya Kapur v. State of
Punjab37 and A.P.D. Jain Pathshala v. Shivaji Bhagwat More 38
will not come to the aid of the respondents for the same
reasons. Notably, not only the subject of finalisation of fee
structure and the matters incidental thereto have been codified
in the form of the 2016 Act, but also a law has been enacted to
deal with the matters during the pandemic situation in the form
of Central Act, namely, the 2005 Act including the State
legislation i.e. the 2020 Act. In fact, the State legislation deals
with the subject of epidemic diseases and its management. Even
those enactments do not vest any power in the State
Government to issue direction with regard to commercial or
economic aspects of matters between private parties with which
the State has no direct causal connection, which we shall
examine later at the appropriate place. In other words, the
power of the State Government to deal with matters during the
Page 36 of 40
Sayyed 1-WP.497.2014.docx

pandemic situation have already been delineated by Parliament
as well as the State Legislature.

117. As such, it is not open to the State Government to issue
directions in respect of commercial or economic aspects of
legitimate subsisting contracts/transactions between two private
parties with which the State has no direct causal connection, in
the guise of management of pandemic situation or to provide
“mitigation to one” of the two private parties “at the cost of the
other”. This is akin to rob Peter to pay Paut. It is a different
matter, if as a policy, the State Government takes the
responsibility to subsidise the school fees of students of private
unaided schools, but cannot arrogate power to itself much less
under Article 162 of the Constitution to issue impugned
directions (to school management to collect reduced school fee
for the concerned academic year). We have no hesitation in
observing that the observation of the State Government of
existence of power to issue directions even in respect of
economic aspects of legitimate subsisting contracts/transactions
between two private parties, if accepted in respect of fee
structure of private unaided schools, is fraught with undefined
infinite risk and uncertainty for the State. For, applying the
same logic the State Government may have to assuage similar
concerns in respect of other contractual matters or transactions
between two private individuals in every aspect of life which
may have bearing on right to life guaranteed under the
Constitution. That would not only open pandora’s box, but also
push the State Government to entertain demands including to
grant subsidy, from different quarters and sections of the society
in the name of mitigating measures making it financially
impossible and unwieldy for the State and eventually burden
the honest tax payers who also deserve similar indulgence.
Selective intervention of the State in response to such demands
may also suffer from the vice of discrimination and also likely to
impinge upon the rights of private individual(s) the supplier of
goods or service provider, as the case may be. The State cannot
exercise executive power under Article 162 of the Constitution
to denude the person offering service(s) or goods of his just
claim to get fair Compensation/cost from the recipient of such
service(s) or goods, whence the State has no direct causal
relationship therewith.”

Page 37 of 40

Sayyed 1-WP.497.2014.docx

62. We have already clarified above that the issue before us is
not whether entertainment duty on convenience fees should be
levied or not, but the issue before us is whether the Respondents,
by issuing impugned G.O. can prohibit the Petitioners from
collecting the convenience fees. In our view, the said decision of
Delhi High Court supports the submissions made by the
Petitioners.

63. We are, therefore, of the view that the impugned G.O.
transgressed the fundamental rights under Article (19)(1)(g)
granted to the Petitioners by prohibiting theatre owners and others
from collecting the convenience fees from their customers. Absent
a Statutory regulation which regulates the right to conduct the
business of the Petitioner, the imposition of such a restraint would
infringe the legitimate rights of theatre owners. The impugned
prohibition is directly contrary to Article 19(1)(g) of the
Constitution of India. If business owners are not permitted to
determine the various facets of their business (in accordance with
law), economic activity would come to a grinding halt. The choice
of whether to book the ticket online or purchase it at the theatre is
left to the customers.

64. Suppose the customer feels it convenient to book the tickets
online by not going to the theatre and paying the convenience
fees. In that case, the Respondents cannot restrain the Petitioners
from collecting the convenience fees since for providing this
facility of online booking, the theatre Owners/Petitioners have to
invest in the technology.

Page 38 of 40

Sayyed 1-WP.497.2014.docx

65. We once again make it clear that we are not deciding
whether an entertainment duty is liable to be paid on such
convenience fees.

66. Because of the above, the impugned G.O. clause 3(d) of 4
April 2013 and clause (a) of G.O. dated 18 March 2014 are
quashed and set aside.

67. We make it clear that in the present petition, we have not
examined the validity of the amendment made on 29 December
2014 to Section 2(b) of the ED Act but the present petition only
concerns the period prior to 29 December 2014 and the
empowerment of the Respondents for issuing G.O.’s to the extent
of prohibition to collect convenience fees.

68. Mr. Rajadhyaksha appearing for the Petitioner in Writ
Petition No.1755 of 2013 has in addition to the submissions made
by Mr. Thacker, also made additional submissions that they are not
covered by the G.O.s since they are not the agents of Cinema hall’s
exhibitors or owners and, therefore, the G.O.s are bad in law. He
further made submissions on Article 14 of the Constitution and
stated that online service providers such as IRCTC, MakeMyTrip,
etc., who also charge additional service charges are not subject to
any restrictions and, therefore, the G.O.s are discriminatory. We do
not propose to deal with both these contentions since in the
analysis made by us above, the G.O.s are unconstitutional and,
therefore, insofar as these two submissions are concerned, we keep
the issue open to be decided in an appropriate manner.

Page 39 of 40

Sayyed 1-WP.497.2014.docx

69. These Petitions are allowed by declaring clause (a) of G.O.
dated 18 March 2014 and clause 3(d) of G.O. dated 4 April 2013
as unconstitutional to the extent it prohibits collection of
convenience fees/service charges on online ticket booking. The
interim orders granted earlier are now made absolute.

70. No order for costs.

                                        (Jitendra Jain, J.)                    (M. S. Sonak, J.)




Signed by: Sayyed Saeed Ali
                                                              Page 40 of 40
Designation: PA To Honourable Judge
Date: 10/07/2025 16:15:07

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Author: M. S. Sonak

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