Khaja Fiauddin vs Joint Collector

P. Venkatarama Reddi, J.—In this writ petition filed as long back as in October, 1988, the petitioner has questioned the legality of the order dated 26-10-1988 passed by the respondent-Joint Collector revoking the licence granted to him to exhibit the Cinemas in exercise of power u/s 10(2)(b) of A.P. Cinemas Regulation Act. The impugned action was taken on the ground that the petitioner had fallen into heavy arrears of entertainment tax and the arrears were not cleared despite the conditional orders passed by the High Court in various writ petitions. The respondent who is the licensing authority under the Act therefore concluded that the petitioner violated condition No.46 of the B-Form Licence.

It is not in dispute that the petitioner is still in arrears. This Court granted interim direction permitting the petitioner to exhibit the films on condition of payment of Rs.50,000/-. It is not known whether the petitioner paid that amount. It is also not known whether the petitioner''s original licence had expired or renewal granted. Be that as it may, irrespective of the subsequent developments, we would like to decide the writ petition on merits.

The learned Counsel for the petitioner contends that the power u/s 10(2)(b) ought not to have been exercised by the respondent without there being a finding by a Court of law that the licensee committed an offence of non-payment of tax under the Act. Section 10(2)(b) enables the licensing authority to revoke the licence if the licensee has without reasonable cause failed to comply with any of the provisions of the Act or the Rules or any of the conditions or restrictions, subject to which the licence has been granted. Condition No.46 of the Licence enjoins that "the licensee shall not commit any offence punishable under A.P. Entertainment Tax Act." Failure to pay tax due within the prescribed time is an offence for which punishment is provided u/s 14 of the said Act. On conviction, the Magistrate can impose a fine which may extend to Rs. 1,000/- without prejudice to his liability to pay the tax. The learned Counsel submits that unless the petitioner is convicted after the Magistrate duly finds him guilty of the offences the Licencing Authority cannot assume that an offence has been committed under the A.P. Entertainment Tax Act. We do not find any force in this contention.

Apart from the fact that the interpretation sought to be placed by the petitioner''s Counsel would frustrate the very objective of the condition that the licensee should not default in the payment of entertainment tax, it goes contrary to the plain language of condition No. 46. Be it noted that the phraseology used in condition No.46 is ''offence punishable.'' The conviction for an offence is not what is contemplated by the said condition. The licensing authority in exercise of the power conferred on him u/s 10(2) can come to his own conclusion whether an offence has been committed under the provisions of A.P. Entertainment Tax Act, 1939. The process of reaching that conclusion is incidental to the power confined to him u/s 10(2)(b) of the Entertainment Tax Act, 1939. We cannot place an interpretation which has the effect of denuding the licensing authority of the effective exercise of power to advance the objectives of the provisions by which the licensee is bound. It may be seen that in contrast to the language employed in condition No. 46, sub-section (1) of Section 10 contemplates revocation of licence in case the holder of a licence has been convicted of an offence u/s 7 of the Cinematograph Act. Thus under subsection (1) of Section 10, conviction per se is a ground for revocation of licence. But, the question whether there was violation of condition No. 46 read with Section 14 of the A.P. Entertainment Tax Act can be independently decided by the Licensing Authority subject to observance of principles of natural justice after giving due opportunity to the person affected without waiting for the outcome of any prosecution or the verdict of a Magistrate in a criminal case. In fact, it is relevant to mention that in the instant case, there is not even a dispute on the question whether the petitioner defaulted in payment of entertainment tax dues. The failure to pay the tax is an admitted fact and the chronic default is too apparent from the facts of the case to call for an inquiry. We have therefore no hesitation to reject the contention of the learned Counsel for the petitioner.

The petitioner''s Counsel relied on a decision of a learned single Judge of this Court in Nirmal Talkies, Adoni v. District Revenue Officer, 1984 Crl. LJ 929. That was a case in which the Licensing Authority imposed a fine of Rs.8,000/- in purported exercise of power u/s 9 of A.P. Cinema (Regulation) Act, 1955 for the alleged violation of the conditions 36 and 46 of the ''B'' Form licence. It was held that the licensing authority had no such power and it is only the competent criminal Court that has jurisdiction to impose the penalty on a complaint being filed before it. This is not a case where any such action was taken u/s 9 of the Act. The following observation has been relied upon by the learned Counsel for the petitioner.

".......A reading of the provisions of Section 10 indicates that before a licence can be revoked by the Licensing Authority, there should be a conviction for an offence u/s 9 of the Act. The conviction u/s 9 of the Act can be only by a criminal Court on a proper complaint being filed before the competent criminal Court."

But that observation should be read subject to the preceding sentences in which the learned Judge referred to the provisions of Section 10(1) of the Act which we have also adverted to supra. In the instant case, the power has been invoked u/s 10(2)(b), but not u/s 10(1). Hence the decision does not come to the aid of the petitioner.

The writ petition is, therefore, dismissed with costs quantified at of Rs.500-00 (Rupees five hundred only).