AI Structured Summary
Not yet generated for this judgment
Judgment
J.N. Bhatt, J.—In this petition, the challenge is against the order passed by respondent-authority directing the petitioner to pay Entertainment Tax wrongly recovered from the Cinema owners.
The petitioner is a Manager of a cinema house in city of Ahmedabad known as Natraj Cinema. The petitioner was served with a show cause notice dated 7th January 1982 by the concerned Mamlatdar, Entertainment Tax for the District of Ahmedabad calling upon the petitioner to show cause as to why the action should not be taken u/s 30 of "The Gujarat Entertainment Tax Act ,1977" (Act) for the recovery of an amount of Rs. 1,01,467-68 ps. on the ground that there was a violation of the condition of the Government Notification dt. 1st November 1980 while giving an exemption from payment of Entertainment Tax to Hindi Film "Bin Maa Ke Bachchey". The reply dated 10th February 1982 was filed by the petitioner alongwith the copy of memorandum of the Exhibitors Association submitted to the Government on 2nd February 1982. Thereafter the Mamlatdar passed an order u/s 30 of the Act directing the petitioner to pay an amount of Rs. 1,01,467-68 ps. within 10 days from the date of the order which was passed on 5th March 1982.
The petitioner challenged the said order of Mamlatdar by filing an appeal under the Act. The appeal was heard and decided by the Appeallate Authority, i.e., Collector of Ahmedabad District on 23rd August 1982. The appeal was partly allowed. The impugned order passed by the Mamlatdar was modified. The petitioner was directed to pay within 10 days an amount of Entertainment Tax being difference between the rates of Entertainment Tax on admission fees collected by the petitioner and rates which were leviable under the aforesaid Government Notification, instead the direction to pay an amount of Rs. 1,01,467-68 ps.
Being aggrieved by the order of the Collector passed in Appeal No. 78 of 1982, the petitioner has come before this Court challenging its legality and validity by invoking provisions of Article 226 of the Constitution of India.
Learned Advocate Mr. Desai for the petitioner has contended that the impugned order passed by the Collector is illegal, unjust and unauthorised. This submission is countenanced by the learned Assistant Government Pleader appearing for respondent-authority.
The petitioner had exhibited or screened Hindi Film "Bin Maa Ke Bachchey" at Natraj Cinema between the period from January 23, 1981 to March 26, 1981, availing the benefit arising out of the Goverment Notification dt. 1st November 1980. The said notification was issued by the Government of Gujarat in exercise of powers conferred by Clause (2) of Sub-section (i) of Section 29 of the Act exempting Hindi Film "Bin Maa Ke Bachchey" from payment of Entertainment Tax for a period of six months on and with effect from 5th December, 1980 subject to the conditions specified in the Schedule. The petitioner, inter alia, contended that he did not know about the said notification till Hindi film "Bin Maa Ke Bachchey" was exhibited in Natraj Theatre and exhibition was completed. The said film was exhibited in Natraj Theatre by the petitioner from January 23, 1981 to March 26, 1981.
One of the conditions specified in the Schedule to the said notification provided that the rates of admission prevailing as on 1st April 1980 excluding the amount of the tax shall not be increased and that the rates of admission shall be reduced by the amount of the exemption given. The petitioner was charging rates for admission higher than the rates prevalent on 1st April 1980 in terms of first condition in the Schedule of the said notification. During that period, the said movie has already been exhibited. The rates for admission charged by the petitioner and the rates leviable pursuant to the Condition No. 1 in the Schedule of the said notification and the rates of Entertainment Tax, at the relevant time could be highlighted in following Tabular Form. The petitioner exhibited said Hindi movie "Bin Maa Ke Bachchey" which was exempted from payment of Entertainment Tax during the period from January 23, 1981 to March 26, 1981:
-------------------------------------------------------------- Class Rate for Entertainment Rate of Rate of ticket for Tax ticket as ticket admission per condition charged No. 1 by the Petitioner 1 2 3 4 5 -------------------------------------------------------------- Balcony 4-50 + 10-00 2-68 1-92 2-10 Upper 3-50 + 10-00 2-03 1-57 1-75 Lower 2-00 + 10-00 1-95 1-05 1-40 --------------------------------------------------------------
The respondent-authority found that there was a breach of Condition No. 1 in the Schedule of said notification and therefore, the show cause notice was given. The trial authority under the Act, namely, Mamlatdar for Entertainment Tax at Ahmedabad, directed the petitioner to pay an amount Rs. 1,01,467-68 ps. by passing an order in inquiry on 5-3-1982. The petitioner preferred an appeal u/s 12 of the Act before the Collector, Entertainment Tax at Ahmedabad against the order of Mamlatdar passed u/s 9 of the Act in reassessment inquiry proceedings. The appeal was partly allowed. The impugned order, therefore, came to be modified. The appellate authority set aside the order of Mamlatdar directing the petitioner to pay an amount of Rs. 1,01,467-68 ps. towards Entertainment Tax and instead, directed the petitioner to pay difference of amount between rates of tickets charged and the rates of tickets leviable under the notification within 10 days and to deposit the said amount towards the Entertainment Tax by passing an order on 23-8-1982. Hence this petition under Article 226 of Constitution of India.
It has been contended on behalf of the petitioner that the impugned order is invalid and illegal. This submission is seriously countenanced on behalf of the respondent-State.
The impugned order is challenged mainly on the following grounds:
(i) That the respondent-authority should not have imposed Condition No. 1 wherein while giving exemption from payment of Entertainment Tax in case of Hindi movie "Bin Maa Ke Bachchey" to charge the rate in respect of admission to the Entertainment Tax prevalent on 1st April 1980;
(ii) That there was no authority or power for reassessment of Entertainment Tax as the petitioner had submitted Returns and thereafter no objection was raised for a period of one year by respondent-authority and
(iii) That the petitioner has not charged Entertainment Tax at all from cine-goers.
The impugned notification dt. 1st November 1980 was issued by the State of Gujarat in exercise of the powers conferred by Clause (a) of Sub-section (1) of Section 29 of the Act. By virtue of the said notification, the Government of Gujarat exempted Hindi movie "Bin Maa Ke Bachchey" produced by Ratan Mohan, K.S. Enterprise, at Bombay, from payment of tax for a period of six months subject to the conditions specified in the Schedule. The impugned order is passed by the respondent-authority on the ground that there is violation of one of the conditions, namely, condition No. 1 in the Schedule. Condition No. 1 in the Schedule clearly provides that rate of admission prevailing as on 1st April 1980 excluding the amount of tax shall not be increased and that the rates of admission shall be reduced by amount of exemption given. It is very clear from the record of the present case that the petitioner has charged higher rates than the rates prevalent on 1st April 1980 excluding the amount of tax. In view of the facts narrated in the table as aforesaid, the petitioner charged higher rate of admission to the entertainment than the rates prevalent on 1st April 1980. Thus, there was a breach of Condition No. 1 out of four conditions prescribed in the Schedule in the said notification of Government of Gujarat. The Collector, partly reversing the order of the Mamlatdar, Entertainment Tax, has directed the petitioner to pay the difference of amount charged in respect of admission to the said entertainment and the amount chargeable like that which was prevalent on 1st April 1980 excluding Entertainment Tax by exercising powers u/s 30 of the Act.
The impugned notification was issued under the provision of Section 29 of the Act. Section 29 of the Act reads as under:
Exemption - (1) The State Government may, by notification in the Official Gazette, exempt either wholly or partly, any entertainment or class of entertainments from payment of tax, subject to such conditions as may be specified therein-
(a) Where such entertainment is provided for any educational, medical, charitable, philanthropic or such other purpose; or
(b) Where the State Government considers it necessary so to do in the public interest.
(2) Every notification issued under Sub-section (1) shall be laid for not less than thirty days before the State Legislature as soon as possible after it is issued and shall be subject to rescission by the State Legislature or to such modification as the State Legislature may make during the session in which it is so laid or the session immediately following.
(3) Any rescission or modification so made by the State Legislature shall be published in the Official Gazette and shall thereupon take effect.
Both the authorities, on appreciation of facts and circumstances of the case, concurrently found that there was a breach of Condition No. 1 in the Schedule of the said notification. The benefit of exemption from Entertainments Tax was availed of by the petitioner and there is no dispute with this aspect. There is also no dispute about the fact that the petitioner had not charged the leviable rates as per Condition No. 1 in the Schedule of the said notification while availing benefit thereof. Thus, the petitioner had charged higher rates than the levied pursuant to Condition No. 1 of the said notification. Thus, there was clear violation of Condition No. 1. In case of such violation, obviously the petitioner was not entitled to the benefit of the exemption. The exemption from the Entertainment Tax in respect of Hindi movie "Bin Maa Ke Bachchey" was granted on five conditions enumerated in the Schedule in the said notification. One of the conditions was not fulfilled by the petitioner. There was a violation of specified Condition No. 1 and the petitioner charged higher rates for admission to the said entertainment than what was prevailing. The exemption was based on certain conditions provided in the said notification and one of the conditions was not observed. The concurrent finding of fact recorded by the authorities below that there was a violation of Condition No. 1, is quite correct and justified. The impugned order came to be passed u/s 30 of the Act as there was violation of Condition No. 1 as aforesaid and resultant breach of the provision of Section 29 of the Act. The Condition No. 5 in the Schedule also provided further that in case of breach of any of the conditions of exemption the prescribed authority will be empowered or competent to take all actions u/s 30 of the Gujarat Entertainments Tax Act, 1977.
Section 30 of the Act provides liability to pay tax in the event of breach of condition of exemption. Section 30 of the Act reads as under:
(1) Where any entertainment is exempted u/s 29 from the whole or any part of the tax payable under this Act subject to any condition, then, in the event of a breach of any such condition, the proprietor shall, notwithstanding such exemption, be liable to pay tax in relaiton to such entertainment.
(2) Where the prescribed officer has reason to believe that any proprietor has incurred liability to pay tax under Sub-section (1), he shall serve on the proprietor, a notice requiring him on a date and a place specified therein, either to attend and produce or cause to be produced all evidence on which such proprietor relies in section or to produce such evidence as is specified in the notice.
(3) On the date specified in the notice, or as soon as may be thereafter, the prescribed officer, after considering all the evidence which may be produced, assess to the best of his judgment the tax due from the proprietor.
The State Government is also empowered to frame and make rules u/s 31 of the Act. The Gujarat Entertainments Tax Rules, 1979 (Rules) are framed by the State of Gujarat pursuant to the powers enshrined u/s 31 of the Act. The contention that reassessment of the tax was not permissible after a period of one year as the Returns filed by the petitioner were not objected by the respondent-authority, is not sustainable. Again the ground that the respondent-authority is not entitled to pass an order directing the petitioner to pay an amount of difference between the rates charged in respect to the admission of the said entertainment and the leviable charges pursuant to Condition No. 1 under the said notification, is also without any substance. It also cannot, be contended that the petitioner has not recovered entertainment tax from the cine-goers in view of the provisions of Sections 9, 29, 30 and 31 of the Act and Rule 15 of the Rules.
Section 9 of the Act gives power to the prescribed authority for making assessment of escaped payments for admission and re-assessment of payments for admission assessed at lower rate. The charge of entertainment duty is imposed by Section 3 and Section 4 merely provides for method of levy of entertainment duty. The Gujarat Entertainments Tax Act, 1977 is designed and devised to authorise and empower the prescribed authority of the State to impose tax on entertainments in in the State at the stage of admission to entertainments. Section 29 of the Act also authorises the State Government to grant exemption by notification in official Gazette either wholly or partly any entertainment or class of entertainments from payment of tax subject to the condition as may be prescribed therein.
Pursuant to the powers conferred by Section 29 of the Act, Hindi movie "Bin Maa Ke Bachchey" was given exemption from Entertainment Tax by virtue of the notification dated 1st November, 1980. The exemption granted from payment of Entertainment Tax for a period of six months on and with effect from 5th December 1980 was subject to five conditions specified in the Schedule. It cannot be contended that the notification imposing such conditions is in any way without any authority or is improper. The State Government is empowered to grant the exemption subject to certain conditions that may be prescribed, and therefore, Condition No. 1 also cannot be said to be illegal or without any authority. It was quite within statutory authority for the State to prescribe the rates of admission prevalent on earlier date excluding amount of tax while granting exemption from payment of Entertainment Tax. Notification is dated 1st November 1980 and Condition No. 1 in the Schedule provides that rates of admission prevailing on 1st November 1980 excluding amount of tax shall not be increased and the rates of admission shall be reduced by amount of exemption granted. The contention that the rate of admission prevalent on 1st April 1980 by virtue of notification which was dated 1st November 1980 is unauthorised, impoper and illegal, is without any substance and merit. In view of the scheme and statutory provisions under Sections 3, 9, 30 and 31 of the Act read with Rule 15 of the Rules, this contention must fail. One cannot, be allowed to say that while availing of the benefit arising out of such statutory notification, that the exemption condition or the conditions, as the, case may be, are unauthorised or invalid.
The petitioner has admittedly availed of the benefits of the said notification and has challenged Condition No. 1. The contention challenging Condition No. 1 and availing of the benefit of the notification is not only not proper but is also inequitable. Condition No. 1, the violation of which is established and such conclusion is quite proper, legal and valid. The impugned order passed u/s 30 of the Act for violation of Condition No. 1 and provision of Section 29 of the Act, directing the petitioner to pay amount of the difference of the amount charged in respect of admission to the said entertainments and the amount leviable under Condition No. 1 of the notification, is also quite legal, valid and justified.
It cannot be contended even for a moment that the order of re-assessment passed u/s 30 of the Act is beyond the period of limitation.
Lastly, it was contended that impugned order came to be passed after the period of one year from the date of grant of exemption and exhibition of the Hindi movie "Bin Maa Ke Bachchey". Under what provision of law, such a condition can be entertained has not been pointed out by the learned Counsel for the petitioner. Apart from that, the powers and authority of the State Government for re-assessment of payments for admission assessments at lower rate is clearly given in Section 9 of the Act and the defaulter is liable to pay tax in the event of breach of condition of exemption u/s 30 of the Act. Rule 15 of the Rules framed u/s 30 of the Act to the assessment or re-assessment of tax u/s 9 could be made within the period of three years from the date on which the tax is leviable or the tax would have been payable. Therefore, it cannot be said that the impugned order is vulnerable as it is passed more than one year after the picture was exhibited and after returns or assessments of entertainment tax were filed and not objected for a period of one year. In fact, there is clear unambiguous statutory authority to the State Government for opening assessment or making re-assessment within the period of three years under the provisions of law and not one year as contended. Mere not raising objection against the assessment of tax or short payment of tax is of not any avail and therefore, this submission is also required to be rejected straightway.
In the light of the facts and circumstances narrated hereinabove and in the legal back-ground enumerated above, this Court has no hesitation in finding that the impugned order passed u/s 30 of the Act for committing breach of Condition No. 1 of the Schedule in the notification issued u/s 29 of the Act, is valid, legal and justified. Therefore, this petition is without any substance and is required to be rejected. Accordingly it is rejected. Rule is discharged, with no order as to costs. Ad-interim relief granted earlier shall obviously stand vacated forth-with.
It was contended on behalf of the petitioner that some time should be given for making payment of difference of amount cannot be accepted in the light of the facts and circumstances emerging from the record of the case. Therefore, this submission is rejected. The amount recoverable and payable pursuant to the impugned order passed by the Collector, Entertainments Tax, Ahmedabad shall be paid by the petitioner forthwith.
In view of the facts and circumstances and evidence on record and having regarding to the relevant provisions of law, this petition is without any substance and is required to be dismissed. It is accordingly dismissed, however with no order as to costs in the circumstances of the case. Rule is discharged.