Bombay High Court permits promoters of 1996 Michael Jackson concert to withdraw Rs. 12 crore Entertainment Tax waiver

In a relief to the event management company responsible for organising the 1996 Mumbai concert of pop star, late Michael Jackson, the Bombay High Court permitted the company to withdraw Rs. 12.33 crores deposited with the High Court as entertainment duty liability (Mumbai Grahak Panchayat v. State of Maharashtra)..The duty was waived by the Maharashtra government early this year..The Court stated that since the State Government decided that the company, Wizcraft Entertainment Agency is entitled to exemption from payment of entertainment duty, there exists no liability for payment of such duty by the applicant..A Bench of Chief Justice Dipankar Datta and Justice GS Kulkarni further noted that the amount directed to be deposited in the Court was invested in a fixed deposit which accrued interest and the same would also be payable to Wizcraft. .Wizcraft was appointed as promoter for Jackson’s History Tours of 1996 in India. Jackson had purportedly agreed to perform the shows in aid and benefit of the charity organisation - Shiv Udyog Sena.It had, therefore, received an exemption from levy of entertainment tax duty and surcharge from the State Ministry of Cultural Affairs as the concert was being conducted in aid of charity..However, the exemption order was challenged before the Bombay High Court by Mumbai Grahak Panchayat (MGP), a consumer organisation on the ground that it was arbitrary and would cause high financial loss to the government.The Court had directed State government to deposit an amount of Rs. 3,33,76,000 as liability towards the entertainment tax. It also directed the government to re-consider the application of Wizcraft for grant of exemption from payment of entertainment duty.Following this, the Maharashtra State cabinet re-affirmed the waiver of payment of entertainment duty granted to the event management company. .Wizcraft then moved the High Court for refund of the amount. With the accrued interest, the amount receivable was Rs. 15,97,05,946 as on August 25, 2021. However, the fixed deposit could be prematurely withdrawn, and the interest penalty could be applied for separately..MGP, however, opposed the application for withdrawal of the interest amount. It submitted that the State recorded its no objection for refund of only the principal amount and not the interest amount. It was also contended that Wizcraft applicant too had accepted such position without challenging the said resolution..The Court, however, turned down the argument made by MGP. The Court agreed that the State while approving withdrawal did not make any reference to interest but that was because t was none of the concern of the State Government when the amount stood deposited not with the government but with the High Court.Since the principal amount has become due and payable, the accretion to it by way of interest also would rightfully belong to the applicant Wizcraft, the Court ruled. .In view of above, the Court noted that neither MGP nor the State could in any manner obstruct the refund of the said amount along with the interest accrued. .[Read Order]