Supreme Court orders F1 organisers to deposit taxOctober 21st, 2011 - 8:46 pm ICT by IANS
New Delhi, Oct 21 (IANS) The Supreme Court Friday ordered Jaypee Sports International Limited, the organisers of the Formula 1 Indian Grand Prix later this month, to deposit in a separate account the entertainment tax for which it has been given exemption by the Uttar Pradesh government.
“Put it in a separate account. Noting would be withdrawn from it till the matter is decided,” Justices D.K. Jain and Anil R. Dave said while issuing directions on a petition challenging the grant of entertainment tax exemption on the sale of tickets for the Oct 28-30 event.
The bench directed Jaypee Sports to deposit in a “no-lien account the entertainment tax payable by it in terms of Section 3 of the Uttar Pradesh Betting and Entertainment Tax Act”.
The money should be deposited within two weeks of the event.
“That we will see”, Justice Jain countered when senior counsel Mukul Rohtagi, appearing for Jaypee Sports International Ltd., wondered about the “purpose of this order” and it would be a dampener for the organisers.
“We fail to understand how our directions to deposit the amount of exempted entertainment tax in a separate account be a dampener for the event or lead to an adverse publicity,” the court retorted.
The court also said it was not going to limit its hearing only on the plea challenging the exemption of entertainment tax but on the larger issue whether the setting up of the F1 circuit was commensurate with the with the social milieu of the people living around it.
Justice Jain said that in a locality where people from the lower strata were living, the provision should be for a football or hockey field and not for elitist sports.
“We must examine this issue and not just confine it to one issue (of entertainment tax),” the court said while pulling up petitioner Amit Kumar for filing a “half-baked” petition.
“Sometimes some very good causes are lost because of half-baked research”, Justice Jain said.
When Rohtagi questioned the timing of the petition, Justice Jain said: “We have taken suo motu action today.”
When Rohtagi said the F1 track was being constructed since 2008, Justice Jain said: “Nobody knew in June 2008 that you would get tax exemption.”
The court also told Rohtagi that the state government was supporting his client.
“The state is supporting you”, the court said.
“Do you want the money for the State or don’t you want it,” the court asked of senior counsel Gopal Subramanium, who appeared for the Uttar Pradesh government.
Subramanium answered in affirmative when court inquired if there was provision for a sports complex in the specical economic zone zone policy for the area.
The court has given Uttar Pradesh government, Jaypee Sports International Limited and other respondents four weeks time to file their reply to the petition and three weeks to the petitioner to file his rejoinder.
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Tags: amit kumar, dampener, entertainment tax, f1 circuit, formula 1, half baked, hockey field, international ltd, jaypee, justice jain, locality, petitioner, senior counsel, social milieu, sports international, strata, supreme court orders, tax act, tax exemption, uttar pradesh government