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Court directs Delhi Race Club to deposit entertainment tax

New Delhi, Feb 21 (IANS) The Delhi High Court has directed the Delhi Race Club to deposit the entertainment tax it collects by selling tickets and by levying additional charges for carrying mobile phones inside the club.

A division bench of Justices B.D. Ahmed and Siddharth Mridul directed the club to deposit Rs.40 lakh with the Delhi government’s entertainment, betting and luxury tax department within three weeks.

The club had approached the court earlier this week seeking quashing of the tax assessment of Rs.1.4 crore by the tax department.

The club in its petition stated that it collected ‘entry charges from those who visit the race course to bet and derive pleasure from races and try to earn money through betting. The club collects the tax at the rate of 25 percent on entry charges and pays it to the tax department’.

The department was demanding that tax should also be paid from the fees collected for the use of mobile phones inside the club.

At present, the club collects Rs.2,000 per phone.

Counsel for the club stated: ‘Some visitors carried mobile phones in the club. It was felt that the indiscriminate use of mobile phones slowly became misuse to others in the betting enclosure. In order to restrict its use the club decided to levy charges for carrying mobile phones inside the club as a regulatory measure at the instance of those who wanted to carry mobile phones so that they remain in touch with their family or place of work in case of any emergency.’

Admitting that illegal betting was taking place in the club, counsel said: ‘The illegal betting was taking place in the club with the help of mobile phones. So levying additional fees on the mobile phone was the need of the hour.’

The club wanted the government to waive 50 percent of the tax as well as the interest.

But the court refused to hear counsel of the club and said his plea would not be heard till the club deposits the money with the tax department.

The court also directed the club to explain why the fee charged for carrying mobile phone should be exempted from entertainment tax.

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