New Delhi: Delhi High Court on Friday allowed GMR Sports, owner of IPL franchise Delhi Daredevils, in an interim order to go ahead with the upcoming T-20 matches without depositing entertainment tax for the season for now.
A bench of justices B D Ahmed and Siddharth Mridul however asked GMR Sports Pvt Ltd to give details of sponsors along with the copies of signed agreements in respect of the matches to be played here by Delhi Daredevils (DD) in a sealed cover before the next date of hearing on May 6.
"They (GMR Sports Pvt Ltd) are not required to deposit the entertainment tax...," the court said.
The court's order came on GMR's application seeking stay of an April 1 demand notice for entertainment tax at the rate of 15 per cent on sponsorship receipts and submitting details of sponsors along with the copies of signed agreements in respect of the matches to be played by the team.
The court on April 5 had restrained Delhi government from acting in terms of April 1 communication.
In its plea, GMR has sought directions to the government "not to withhold its application on the basis of non-payment of tax on sponsorship and non-submission of details of sponsors in respect of the matches to be played by DD in IPL 2016 till the final disposal of the petition."
The court has issued notice to Commissioner of Excise, Entertainment and Luxury Tax and Delhi government asking them to file their response to GMR's plea.
GMR in its application has said that for holding IPL matches for the 2016 season, it had sought permission to sell the tickets for the first match scheduled to be held on April 15 and also for booking of tickets for all the five matches.
GMR said in response, it had received a letter on April 1 from entertainment tax officer asking it to deposit the tax at the rate of 15 per cent on tickets as well as on sponsorship receipts and details of sponsors along with copies of agreements signed with each sponsor for processing its case for grant of permission.
GMR, in its plea, has claimed that the entertainment tax officer had raised the demand in pursuance to Delhi government's notification whose "legality and validity" has already been challenged.
It has alleged that seeking tax on sponsorship receipts was against legal provisions and it would block its "working capital funds".
It has said in April 2014, they had approached the high court for stay of a demand notice of April 11, 2014 for payment of 15 per cent tax on sponsorship received or receivable with relation to IPL 2014 to be played by Delhi Daredevils here.
It also said that the court had granted stay on the demand letter and it had to again approach the court seeking stay on the notices of July 15, 2014 and August 16, 2014 in which it was asked to furnish details of the sponsorship and copy of agreements signed with sponsors.
GMR has contended that under similar circumstances, the high court in its April 16, 2014 order had stayed operation of a demand seeking 15 per cent tax on sponsorship receipts.
It has claimed again they had moved the court seeking stay on the March 23, 2015 notice seeking deposit of entertainment tax at 15 per cent on the sponsorship receipts and details of sponsors and copy of agreement for IPL 2015 and the court had then directed that GMR shall not be required to deposit the entertainment tax and submit these documents.