Srinivasa Picture Palace vs Entertainment Tax Officer, Avanigadda, Krishna District

Yogeshwar Dayal, C.J. and Lakshmana Rao, J.—This writ petition is directed against the "urgent notice" dated 26th May, 1987, whereby the Entertainment Tax Officer, Avanigadda, the respondent herein, called upon the writ petitioner to pay a sum of Rs. 13,620 otherwise a case will be launched in the court of the First Munsif - Magistrate, Avanigadda, and that further statutory steps will be taken. The petitioner is an exhibitor of films at Mopidevi village. For the period from 4th October, 1982 to 3rd October, 1983, the petitioner entered into an agreement with the Commercial Tax Officer to pay a fixed amount of entertainment tax under the then section 5 of the Andhra Pradesh Entertainments Tax Act, 1939. It appears that the petitioner paid the entertainment tax as per the agreement u/s 5. For the first time, the petitioner received the impugned demand in a sum of Rs. 13,620.

In the demand it is stated that the petitioner had entered into the agreement as per the 1971 population census and paid tax at Rs. 396 per week. It is further stated that in the course of the audit by the Accountant - General, it has been noticed that the rate of entertainment tax in the agreement with the petitioner was fixed incorrectly. It is stated that for the period 4th October, 1981 to 3rd October, 1982, the petitioner had screened 530 shows and accordingly for the period 4th October, 1982 to 28th November, 1983, the agreement must be entered for 730 shows under rule 33(2) of the Andhra Pradesh Entertainments Tax Rules. It was further stated that as per this, the weekly tax to be paid comes to Rs. 623 per week, that there is a difference of Rs. 227 per week for the period in question and therefore a further demand for Rs. 13,620 was made.

It may be noticed that every licensee is liable to pay entertainment tax u/s 4 of the Andhra Pradesh Entertainments Tax Act or at his option enter into an agreement to pay a particular amount of entertainment tax in lieu of the tax payable u/s 4. Where the tax payable is so fixed, it is revisable only as per the provisions of the then existing sub-section (3)(b) of section 5. It is not sought to be revised on the grounds mentioned in section 5(3)(b). Merely because an audit report later on found that the agreement was incorrectly entered into, it confers no power on the Entertainment Tax Officer to make any demand whatsoever. There are provisions in the various taxing statutes or the relevant rules which make provision for revising the assessments in certain contingencies. But in the present case the only contingency provided is as mentioned in section 5(3)(b). That contingency has not arisen. In this connection a reference may be made to the observations of a Division Bench of this Court in W.P. No. 3089 of 1978. Therefore, for the relevant year the present demand is totally without jurisdiction.

The learned Government Pleader contends that under general law, every party has a power to resile from the agreement where the agreement was entered into under a mistake or by fraud. It may be mentioned that so far as statutory authorities are concerned, they have only such powers which are expressly conferred on them under the Act. If the powers are not conferred on them, they cannot unilateraly create a demand and try to enforce the same by way of collection of the amount demanded. If the authorities concerned are having any such rights or cause of action, they are free to approach the ordinary courts of the country.

In the circumstances, we have no option but to quash the impugned demand. It is hereby quashed. The writ petition is accordingly allowed. No costs. Advocate''s fee Rs. 150.

Writ petition allowed.