Sri Krishna Chitra Mandir vs The Entertainment Tax Officer

Krishna Saran Shrivastav, J.—Heard the learned Counsel for the petitioner and learned Special Government Pleader for Commercial Taxes.

The petitioner is an exhibitor of films in Uppal. He was paying entertainment taxes u/s 5 of the Andhra Pradesh Entertainments Tax Act, 1938 (sic. 1939) (in short APET Act). After obtaining permit in Form No. IV, the prescribed authority has granted permission for making weekly payment of Rs. 4883/- for the financial year 1987-88. The Government of Andhra Pradesh vide G.O.Ms. No. 233, dated 19-2-1987, upgraded the Uppal Gram Panchayat into a second grade Municipality. The entertainment tax can be varied u/s 5(6) of the APET Act, inter alia when the local area in respect of which permission is granted, is upgraded.

On 2-11-1987, the Entertainment Tax Officer (in short ETO) has issued a notice calling upon the petitioner to file objections for enhancement in rate of tax for the period from 1-2-1987 to 6-11-1987 because the concerned area was upgraded as a second grade municipality. On 24-11-1987, the ETO varied the tax in proceedings Rc. No. APET/87-88 and assessed the entertainment tax at Rs. 96,802/-. The final order dated 24-11-1987 was served on the petitioner by affixing it on the premises on the same day. The petitioner of late obtained a copy of the final order on 16-5-1991 and preferred an appeal before the Appellate Deputy Commissioner (ET), Secunderabad Division, Hyderabad. The appeal bearing No. 56/91-92 was partly allowed on 28-3-1995. The appellate authority found that the petitioner was not liable to pay tax amounting to Rs. 23,888/- for the period from 1-2-1987 to 31-3-1987. But, he was liable to pay the difference of tax for the period from 1-4-1987 to 5-11-1987 amounting to Rs. 72,914/-, because notice issued on 2-11-1987 was served on the appellant on 8-11-1987 i.e. during the period of option which was from 1-4-1987 to 31-3-1988.

Feeling aggrieved by the impugned order, the petitioner has preferred this revision petition mainly on the ground that the final order was not served in accordance with Rule 52 of the APET Rules, because final order cannot be directly served by affixture without the satisfaction of the ETO, that service of notice was not possible as per the procedure of service contemplated by clauses (a) to (c) of the relavent Rules vide Sri Venkateswara Talkies Vs. Entertainment Tax Appellate Deputy Commissioner, Kakinada and Another, . The final order should be deemed to have been served on 16-5-1991, i.e. after a period of three years and five months. Therefore, in the absence of explanation for the delay, it should be presumed that the final order was passed after the period of option, and therefore, it is illegal.

In the case of Swamy Theatre v. Deputy Commercial Tax Officer 1992 (2) An.W.R. 567 : 1992 (2) ALT 29 : (1992) 15 APSTJ 63. a Division Bench of this Court held, that the power to vary the amount of tax under sub- section (6) of Section 5 of the APET Act, is restricted to the period of option, i.e. the period during which the power to vary the amount of tax is the period of option. Sub-section (5) of Section 5 of the APET Act, enjoins that the period (sic. option) permitted under the Section shall continue to be in force till the end of the financial year in which such option is permitted. This means that the period of the option in the case on hand was from 1-4-1987 to 31-3-1988. In Swamy Theatre v. Deputy Commercial Tax Officer 3, a notice by the Deputy Commercial Tax Officer was issued on 7-5-1988, i.e. during the period of option which was from 1-4-1988 to 31-3-1989, and therefore, the amount of tax varied for that period of option i.e. from 1-4-1988 to 31-3-1989 was found to be legal and recoverable.

There appears to be no provision for noticing the assessee before varying the amount of tax. However, a notice was issued for the proposed tax on 2-11-1987 and it was served on the petitioner on 8-11-1987. But, the petitioner neither appeared nor submitted any objections to the proposed tax. Therefore, it cannot be said that without affording him an opportunity of being heard, the tax was levied by the ETO.

True that without resorting to the procedure of service of notice as contemplated by clauses (a) to (c) of the APET Rules, the notice cannot be served by affixture under clause (d). But as noted above, it is not a requirement of law to serve even the final order on the petitioner, yet it cannot be said that because the final order was not validly served as required by Rule 52 of the APET Rules, the order of final assessment is bad. The reason is that the proposed provisional order was served on the petitioner on 8-11-1987 but he preferred to remain absent. There is no material on record that the order dated 24-11-1987 was passed subsequently and was ante-dated particularly because it is not alleged that the officer who has passed the order on 24-11- 1987 was continuing as ETO as on 16-5-1991 and for the whole year 1991 also. The effect of irregular service of notice is that it would only give a right to the petitioner to prefer an appeal when he obtained or he was served with the copy of the final order though technically it may be barred by limitation. But, it cannot be presumed in the aforementioned circumstances of the case, that the order was ante-dated, and therefore, void. In the case of M/s. Sri Venkateswara Talkies v. Appellate Deputy Commissioner (1 supra), the effect of improper service of notice was only to give a right of audience to the proprietor of that petitioner talkies before the appellate Court which was directed to hear the appeal afresh on merits.

In the case of State of Andhra Pradesh v. Khetmal Parekh (1994) 93 STC 406 (SC). the Deputy Commissioner was empowered to pass an order suo motu revision within the period of four years of the order of the assessment. The impugned order passed on 6-1-1973, and notice was served on the assessee only on 21-11-1983, i.e precisely after ten and half months (years) later. That is to say, beyond the period of four years prescribed for revising the impugned order of assessment. There was no explanation from the Deputy Commissioner as to why the delay was caused. There was a mandatory provision for service of the Order of Assessment on the assessee. Such is not the case here because there appears to be no provision for service of the final order on the assessee. In that case, the assessee had alleged that the orders were actually passed after four years, but it was antedated and therefore, it was bad. The apex Court in the absence of any explanation presumed that the order was not passed on the date it purports to have been made. It is further observed that it could have been made after the expiry of the prescribed period of four years. Therefore, the impugned order was found bad.

In the case on hand, there is no allegation that the impugned order dated 24-11-1987 was passed after the period of option, i.e. after 31-3-1988 and it was ante-dated. There is no allegation that the same ETO who has passed the impugned order and who was posted as on 24-11-1987 had continued in the same capacity upto 16-5-1991.

In these circumstances, the case of State of Andhra Pradesh v. Khetmal Parekh3 is of no help to the petitioner.

For the foregoing reasons, there appears to be no substance in the revision petition, and therefore, it is dismissed at the admission stage. No costs.