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Judgment
The above noted five writ petitions came up for hearing on admission after notice to the respondents, who have filed their objections, were
taken up together and heard at the same time. Since common question of law and fact are raised, hence they are all tied up and disposed of
together.
The petitions are filed under Article 226 of the Constitution of India read with Section 103 of the J&K Constitution challenging the amendment
in J&K Entertainment Tax (CinematographShow) Amendment Act, 1983 published in Govt. Gazette dated August 19, 1983 and further praying
that the SRO No. 111 of 1986 dated February 11, 1986 and SRO No. 526 of 1983 dated November 10, 1983 are declared as illegal and
unconstitutional. A further prayer is made for the quashment of demand of show tax sought to be recovered under the provisions of SRO No. 526
dated November 10, 1983 demanding the same from the petitioners at the enhanced rates assessed from November 10, 1983 till January, 1986
All the petitioners allege that they are carrying on the business of public cinema shows in their respective Cinema Halls under a license obtained
from the District Magistrate of their respective districts. Petitioners pay besides the license fee every year under the Cinematography Act, all other
taxes which have been levied on them from time to time by the States and Union of India. They also pay income tax, property tax, and
Entertainment Tax The J&K Entertainments Duty Act, 1959 was enforced in the State of J&K, which still continues according to which a tax on
payment for admission to entertainment has already been levied on the Cinemas run by the petitioners, under the said Act no tax on any individual
show is contemplated.
It is also contended that in the year 1962 another Act No XXIII of 1962 titled as J&K Entertainment Tax (Cinematograph Show) Act, 1962
(for short hereinafter called the 1962 Act) was promulgated by Respondent No. 1 the State with effect from August 15, 1962 vide SRO 178 of
1962. According to Section 3 of this Act, Tax is charged and paid to the Government on all public cinematograph exhibitions to which persons are
admitted on payment of entertainment fax not exceeding Rs. 28.' per show or such rates or rates as the Government may from time to time fix by
notification in the Government Gazette. It also provides that tax levied under subsection 1 shall be recoverable from the Proprietor. Later on
Government of J&K vide Notification dated November 18, 1974 directed that the Entertainment Tax shall be levied, charged and paid to the
Government on all cinematograph exhibitions at the rate of Rs. 10/ per show in accordance with which the petitioners were paying the said tax.
The Government by Amendment Act No. XIV of 1983 amended Section 2 of Act of 1962 promulgated on August 19, 1983 that in Section 3
and subsection 1 of Section 2 of the said Act the words, "" not exceeding Rs. 20/ per show "" shall be substituted by the words, "" not exceeding Rs.
100/ per show "". After this amend mend, the Government vide SRO487 dated September 27, 1983 invited objections from the concerned
persons. The J&K Cinema Owners Association against the said notification submitted their objections within the time prescribed in the
Notification, thereafter the Government vide SRO 526 dated November 10, 1983 based on the amended provision of 1962 Act published revised
rates of show tax superseding SRO 558 of November 10, 1974 and imposed and levied the show tax at the following rates:
a) Within the cities of Jammu & Srinagar.
Rs. 100/ per show.
b) In areas other than those mentioned in col. (a) above
Rs 50/ per show
The present petitioners, it is to be noted are the Cinema Owners running their Cinema shows in the areas other than the cities of Jammu and
Srinagar as such are covered by clause (b) of the Schedule of rates.
Several writ petitions were filed on enforcement of SRO 526 of 1983 challenging the amended schedule rates in the High Court. It is further
alleged that the High Court in those Writ Petitions issued interim stay against the realisation of show tax at the enhanced rates and directed that they
shall not be charged at the rate more than Rs. 20/ per show. Subsequently when those writ petitions came up for consideration before the court,
another SRO 111 of 1986 was issued on February 11, 1986 during the pendency of those writ petitions superseding SRO 526 of November,
1983 by virtue of which the show tax from the Cinema houses situated in the areas other than the cities of Jammu and Srinagar has been levied at
the rate of Rs. 20/ per show. Petitioners further alleged that in view of the suppression of the above said SRO 526, all the petitioners withdrew
their writ petitions with liberty to file fresh one, if the petitioners feel aggrieved by the subsequent SRO, namely, No. 111 of 1986.
The respondents on the enforcement of SRO 111 of 1986 by issuance of Demand Notices against the petitioners in March, 1986 demanded
arrears of show tax with effect from November 10, 1983 till January, 1986 at the rates, which were notified vide superseded SRO 526 of 1983.
All the petitioner being aggrieved against the said demand after the withdrawal of their earlier writ petitions, whereby they challenged SRO 526 of
1983 have also challenged in the present writ petitions the demand at the rates specified in the said SRO. It is alleged that the tax so demanded at
the rates specified therein and imposed under the 1962 Act as stood amended vide 1983 Act is an excess of the powers conferred on the State to
legislate upon taxes and, therefore, the provisions of Section 3 of the Act are ultra vires the Constitution. Another point of attack on the legislation
is on the basis that the proposed tax is nothing, but a tax on business and profession and cannot be levied beyond the prescribed limit of Rs. 250/
per year as envisaged by Article 276 of the Constitution of India. It is also pointed out that the demands made by way of the Demand Notices
under challenge can also not be made, because the SRO under which the demands are made stands superseded by the subsequent SRO No. 111
of 1986.
The petitions are contested by the respondent's la their objections filed against the entertainability of the writ petitions, it has been contended that
the writ petitions as a whole are misconceived and are liable to be dismissed. It is not disputed that the earlier writ petitions challenging SRO 526
of 1983 were withdrawn with liberty as pointed out, but not on any impression given as demonstrated in the writ petitions. In fact it is submitted
that to challenge the constitutionality of the 1962 Act and the Amendment of 1983, which was open to the petitioners in the earlier writ petitions
cannot now be agitated in the present writ petitions, as the earlier writ petitions stood dismissed as withdrawn It is also contended that the amounts
sought to be recovered under SR.O 526 of 1983 till the SRO No. 111 of 1986 came into force are constitutional and valid, as the said SRO
keeps the claim alive till the SRO of 1986 came into force in accordance with the rates specified in SRO 526. It is also pointed out that the
provisions of Article 276 of the Constitution of India are in no way violated the levy and impose of show tax on profession as envisaged by Article
276 of the Constitution of India.
On hearing the learned counsel for the respective parties at length and examining the provisions of the Act of 1952 and the Amendment made
therein 1983 in the light of which SRO II1 of 1986 has been issued, I am of the opinion that the petitioners are not entitled to get any relief in the
present petitions. The petitions are mostly based on the assumption challenging the constitutionality of the Act and the SRO that the show tax so
imposed under the Act falls within the category of tax on profession and calling. Argument though attractive is devoid of any substance, because
nothing substantial could be placed before me to show that the provisions of the Act are in any manner violative of any provision of the State
Constitution or Article 276 of the Constitution of India. Great stress is laid by learned counsel for the petitioners on Article 276 of the Constitution
of India on the plea that the show tax is a direct tax on the Proprietor of the Cinema, which is nothing, but a tax on profession and therefore, such
an imposition, which falls in that category cannot exceed Rs. 2501 per year on any person. It is also contended that the petitioners are paying taxes
imposed on Entertainments Duty Act, 1959, under the Income Tax Act and other taxation laws in presence of which the imposition of such a tax
on performance of Cinema shows is confiscatory in nature and thus liable to be held to the provisions of the Constitution. In support of their
contention, learned counsel placed reliance on A I.R. 1959 Himachal Pradesh 17 (Romesh Chandra, Petitioner Vs. Union of India and another.
Respondent) and A.I.R. 1952 Madras 395 (S. Ananthakrishnan, Petitioner Vs. The State of Madras).
In the second limb of their arguments, counsel for the petitioners submitted that the earlier writ petitions were withdrawn on the undertaking
given by the respondents that by the subsequent SRO 111 of 1986, the rates specified in 1986. SRO will only prevail even for the period during
which SRO 526 remain in force and, therefore, the demand made on the basis of SRO 526 of 1983 cannot be sustained and is barred by
selfimposed injunction on the respondents on the basis of their impression given as well as from the words of SRO of 1986, once the previous
SRO stands superseded, nothing survives therein to realise tax on the basis of the said SRO.
Learned Advocate General and the counsel appearing for the respondents submitted that the provisions of Article 276 of the Constitution of
India are not attracted for the imposition of show tax and, therefore, the provisions of 1962 Act cannot be said to be unconstitutional or in any
manner violative of the provisions of the State Constitution It is submit by learned Advocate General that in view of the pronouncement of their
Lordships of the Supreme Court in A.I.R. 1959 S.C. 582 (Western India Theatres Ltd., Appellant Vs. Cantonement Board, Poona,
Cantonement, Respondent), it is no more resintegra that the tax on entertainments like the one under challenge is not hit by the provisions of Article
276 (2) and Schedule VII, Entries 60 and 62) of the Constitution of India. It is, therefore, now well settled that the show tax is not a tax imposed
for the privilege of any trade or calling, but it is a tax on the act of entertainment resulting in a show and not based on a privilege of having the right
to exercise the profession. Their Lordships of the Apex Court were dealing with a case of the like nature where under the Bombay Municipal
Boroughs Act and Cantonement Act (1924), Cantonement Board, Poona, levied tax on entertainments whereby tax on Cinema shows and other
entertainments were imposed dealing with the scope of Article 276 (2) of the Constitution of India held in paragraph 7 of their Judgment:
Nor is the impugned tax a tax imposed for the privilege of carrying on any trade or calling. It is a tax imposed on every show, that is to say, on
every instance of the exercise of the particular trade, calling or employment. If there is no show, there is no tax A lawyer has to pay a tax or fee to
take out a licence irrespective of whether or not he actually practices. That tax is a tax for the privilege of having the right to exercise the profession
if and when the person taking out the licence chooses to do so. The impugned tax is a tax on the act of entertainment resulting in a show"".
In A.I.R. 1955 Saurashtra 90 (KantilalChatrabhuj Shah, Applicant vs. Palitana Municipality, and Opponents), the test for determination of a
particular tax whether the same is on calling or entertainments is laid down, it has been held:
''The true test for determining whether a particular tax is a tax on ""calling"" referred to in Art. 276 on the tax on 'entertainments"" under item 62 of the
State list is to ascertain the incidence of the tax. If the incidence falls on the person because he is engaged in the business of providing the
entertainment for profit, it is a tax on his calling, but if the incidence of the tax calls on the particular entertainment irrespective of whether the
person providing the entertainment follows that calling or not, then it is a tax on the entertainment and falls within item No. 62 of the State list and
as such will not be hit by Art. 276.
It is thus clear from the reading of above noted authorities that the tax in question levied and imposed under the provisions of 1962 Act as it stood
amended by 1983 Amendment Act cannot be regarded as a tax on profession, but a tax on entertainment and thus does not fall within the ambit of
Art. 276 of the Constitution of India so as to challenge its constitutionality.
A Division Bench of the Madhya Pradesh High Court in the case reported in A.I.R. 1966 Madhya Pradesh 298 (Delite Talkies, Petitioner Vs The
City of Jabalpur Corporation, Respondent) also took the same view on the imposition of cinema shows tax by Municipal Corporation of Jabalpur
relying on A.I.R 1959 S.C. 582 (Supra) held :
''That the impugned taxis a tax on the act of entertainment resulting in a show and not a tax on any profession or trade, and is not invalid merely
because it has been imposed on the giver of the entertainment"".
Viewed thus the argument of the learned counsel for the petitioners challenging the validity of the show tax imposed under the Act when tested
in the light of the provisions of Article 276 of the Constitution of India, I find that the enactment cannot be held to be ultra vires of the Constitution
or the imposition in any manner violative of the provisions of the said Article. The argument, therefore, fails and has no legs to stand.
Adverting to the last argument about the effect of suppression of SRO 526 in the light of which the impugned demand is made, it is to be seen
in context with the language of the SRO 111 of 1986, which supersedes the earlier SRO. At the out set on a bare reading of the SRO Illofl986.it
can safely be said the suppression of SRO 526 takes effect from the date, SRO 1 11 of 1986 is enforced. The following words in the said SRO of
1986 are of great significance :
This notification will take effect from 6.2.1986 "".
When read with the words,
In supersession of notification SRO 526 dated 10111983
The clear intention of the Government is made out by making this SRO effective from 621986 that the supersession will take effect from 621986
and no vacuum is left to make it clear that the SRO 526 of 1983 remained effective from November 10, 1983 till February 5, 1986. Nothing
specific was pointed out by the learned counsel for this petitioners to convince me that the supersession of SRO 526 of 1986 is retrospective in
operation or that the respondents by their conduct in any manner placed a selfimposed injunction over them while withdrawing the earlier writ
petitions that the taxes shall be realised even during the operative period of SRO 526 at the rates specified in SRO 111 of 1986. Thus the
argument on this count also fails and is held that the demand made under the Demand Notice for the period during which SRO 526 remained
operative cannot be questioned by a writ of certiorari.
Under the facts and circumstances mentioned hereinabove, all the writ petitions, therefore, fail, which are hereby dismissed. All the connected
C.M.P. Nos. 916, 1202, 1650, 1764, 1765, 1756, 1757 of 1986 and C M.P No. 1369 of 1987 are also disposed of and the interim orders
passed in the respective petitions on the CMPs. stand vacated.