A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva issued notice to the Delhi government and sought its reply on a plea by Delhi and District Cricket Association (DDCA) which has sought quashing of the amendments to the Delhi Entertainment and Betting Act that seek to levy tax on sponsorship and advertisement revenue from 1998.
DDCA, represented by senior advocate Sandeep Sethi and advocate Sangram Patnaik, contended that retrospective imposition of tax was "unconstitutional and unreasonable".
According to DDCA's plea, the recent demand of over Rs 23 crore as entertainment tax by Delhi government was on the advertisement and sponsorship revenue earned during the period from 2003-2009 during which these were not chargeable.
Patnaik contended before the court that the amendments of this year created an "absurd situation" where DDCA, which only collects the tax from persons making the payment, will now have to claim entertainment tax from the sponsors/advertisers for the period of 2003-2009.
While issuing notice to the government, the court directed it not to take any coercive steps against DDCA and to not withhold the no-objection certificate for the upcoming India-South Africa test at Feroz Shah Kotla stadium here.
The court passed the order after DDCA agreed with the court's direction to deposit Rs one crore with the Excise, Entertainment and Luxury Tax Department in two instalments of Rs 50 lakh each.