Formula One: SC asks UP to hold enquiry if organizer of Formula One Race collected entertainment duty

Formula One:The Supreme Court Thursday asked the tax authority of the Uttar Pradesh government to hold an enquiry to ascertain whether organizer of Formula One world championship at the Buddh International Circuit in Greater Noida had collected entertainment duty from the spectators for the events in 2011 and 2012.


The Indian Grand Prix was a Formula One Race which was held at Buddh International Circuit by Jaypee Sports International Ltd in Greater Noida along with Yamuna Expressway during 2011 and 2013 and later due to some tax dispute with the government authority, it was not held after that.

A bench comprising Chief Justice S A Bobde and Justices AS Bopanna and V Ramasubramanian was of the view that the dispute relating to the levy of the entertainment duty by the organizing firm was not the case which should be heard as the PIL under Article 32 of the Constitution.

“Such a petition challenging tax exemption is not maintainable. How can you challenge tax exemption under Article 32, the bench observed during the hearing conducted through video conferencing.

Senior advocate Arvind Datar, appearing for the company, said the tax dispute should not be disputed under the writ jurisdiction.

The senior lawyer said Jaypee Sports had not collected the entertainment duty from the viewers while selling tickets as the government had granted it the tax exemption.

A plea was then filed by one Amit Kumar challenging the exemption granted by the Uttar Pradesh government to the Formula One Race and the top court, in 2011, had asked the organizing company to deposit the entertainment tax payable by them. The company had then deposited Rs 24 crores.

The company has now sought the court’s nod in getting the refund of its money on the ground that the plea against the exemption from paying tax was not maintainable.

The lawyer, appearing for the petitioner, opposed the submission of Datar saying that the plea was filed as the tax exemption was granted to a corporate entity close to the then ruling party and moreover, tax exemption for an elite sport cannot be justified.

The counsel for the state government also said the company had collected the entertainment tax amounts from the public and hence, refunding the money would amount to “unjust enrichment”.

Recording the submissions of the parties, the court directed the statutory authority under the Uttar Pradesh Entertainment and Betting Tax Act to hold an enquiry and submit a report to this court whether the respondents have in fact collected entertainment duty in regard to the events in question.

It also permitted the company to file evidence as appropriate for the purpose of enquiry before the said authority which will furnish the report to the court in four weeks.