Allahabad HC Cannot Impose Tax on Water Parks Providing Swimming Costumes

Imposition of tax on water parks providing swimming costumes is illegal, says the Lucknow bench

Reports said that the Lucknow bench of the Allahabad high court held the statement that government is not eligible to impose a tax on water parks providing swimming costumes to the visitors for payment. The amount of tax levied on the petitioners Lucknow-based Anandi Water Park Resorts and Club Private Limited has also been decided. A bench of Justice Pankaj Bhatia passed the judgment on a writ petition filed by the entertainment park and resort.

The judge had observed that the costume used in the water park would neither fall within the definition of the words ‘instrument’ nor ‘contrivance’. Hence, the bench accepted the counsel for the petitioner that the renting of costumes cannot be included in the term ‘payment for admission’ as defined under section 2(I) of the UP Entertainment and Betting Tax Act, 1979. The bench also added that it is well-understood that can be levied only when specially provided for and not by intendment. If the legislation held their perception that the renting of the costumes should be included for the purpose of the proper determination of the taxes, it should have specifically mentioned the Act, which was previously not done.

Earlier, the state government had imposed tax on the petitioner after finding that Rs. 30 was being charged for male costumes and Rs. 60 for female costumes. The petitioner had challenged the allegations of the government saying the deployment of entertainment tax was illegal since there was no provision stating such in the Uttar Pradesh Entertainment and Betting Tax Act, which is now proved to be right.