The division bench of Justices B D Ahmed and V K Jain held that Delhi government was competent to impose a tax on “entertainment” through DTH services under the Delhi Entertainments and Betting Tax Act, 1996.

According to the impugned provision, DTH providers require to collect an entertainment tax not exceeding Rs 600 for every subscriber in a year on all payments “for admission to an entertainment through DTH” and pay it to the government.

Four prime DTH service providers — Tata Sky, Dish TV, Bharti Telemedia (Airtel) and Bharat Business Channel (Videocon) — had challenged this state legislative provision.

They claimed that only the Central government, and not the Delhi government, had the power to impose a tax of this nature, that the state legislature cannot, in the guise of imposing a tax on entertainment, levy a charge on the DTH service.

It was also alleged that since the petitioners had already been subjected to service tax on broadcasting services by the Central government, imposition of tax by the state was nothing but another tax on the same “amount” twice over.

The bench, however, noted that performances, films or programmes shown to viewers through DTH would fall within the meaning of “entertainments” and therefore, the tax in question would be within the legislative competence of the state legislature.