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SC Clears F1 Race With Riders

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The Supreme Court on Friday cleared the decks for the Formula 1 race in Greater Noida, stipulating that the organisers would deposit 25 per cent of sale proceeds from tickets in a separate account which would not be operated without its permission.

A bench of justices D K Jain and A R Dave in an interim order directed that the amount would be subject to the final outcome of a plea challenging tax exemptions accorded to the organisers of the Formula 1 race.

The apex court rejected the arguments of the organisers that the direction would act as a dampener and cause adverse publicity since it was an international event.

"How can it be a dampener or cause adverse publicity we do not understand?," the bench remarked while passing the order.

The apex court, however, clarified that it was not examining the legality or otherwise of the Formula 1 race, but confining itself only to examining the validity of the entertainment tax exemption granted by the Uttar Pradesh government.

"Yes, primacy has to be given to the event. We are not on that. In fact, we should not consider it," the bench remarked when senior counsel Mukul Rohatgi argued that the plea questioning the tax exemption was acting as a dampener to the event and any adverse order passed by the court would have an impact on holding of the prestigious event.

The apex court, however, put some searching questions to the state government and the organisers vis-a-vis the tax exemption.

India's first Formula 1 event is scheduled to be held in Greater Noida, near national capital, on October 30.

Former Solicitor General Gopal Subramanium, appearing for the UP government, sought to explain that the event was part of a special development zone project undertaken by the state for developing various infrastructural facilities for industrial, residential and sports activities.

The bench, however, said it was concerned as to what exactly was the special development zone aimed at and whether it caters to the needs of the common man, middle class, lower middle class or the elite.

"In Bombay, for example there are certain jhuggi jhopris which are part of a economic development zone. There you can say we will have a cricket or football stadium. But in the name of sports, you cannot have a motor race there.

"This special development zone has to be for a particular class, say the middle class, the poor or the elite. Definition of sports has to be considered in that light.

"What the sport is has to be considered in that light.

Race is also a sport it has to be considered in that context.

You can't pick it up in isolation," the bench remarked.