STATE OF GUJARAT ETC. vs HOTEL RATRANI THROUGH ITS PROPRIETORSHRI KANJI VISHWRAM PAT

The Supreme Court upheld the constitutionality of Section 6-A of the Gujarat Entertainment Tax Act, 1977, and the Gujarat Cinema (Regulation & Exhibition by Video) Rules, 1984, while finding that the gross collection of entertainment tax on Video Recorders is arbitrary and violates Article 14 of the Constitution. The Court clarified that the legislature has the authority to determine the mode of tax levy under Entry 62 of List II, and the choice of assessment modes does not infringe upon legislative powers. The appeals were thus partly allowed, affirming the High Court's decision regarding the arbitrary nature of the tax collection.