The Licensee, Bhuvaneswari Talkies, Gudiyatham vs The Appellate Authority and Joint Commissioner-I, Land Administration Department Madras.5 and others

P.D. Dinakaran, J.—The petitioner seeks writ of certiorari or any other appropriate writ, order or direction in the nature of writ of certiorari

calling for the records of the first respondent made in D.Dis.(L) C.A. 177/88, dated 19.12.1991 and of the second respondent made in

RC.No.E4/72173/88 dated 16.11.1988 and quash the same.

In brief, the second respondent initiated proceedings against the petitioner theatre with regard to one alleged violation, namely, over

accommodation said to have taken place on 20.5.1988. Taking into account that the petitioner had compounded the offence punishable u/s 14(1)

of the Tamil Nadu Entertainment Tax Act the second respondent by a proceeding dated 16.11.1988 suspended C Form licence of the petitioner

for seven days by exercising his power u/s 9(1) of the Tamil Nadu Cinemas (Regulation) Act. Against the said order of the second respondent-

Collector, the petitioner has preferred an appeal u/s 9(A) of the said Act before the first respondent which was dismissed as not maintainable in

law. Hence, the above writ petition.

It is not in dispute that the facts of the case, the grievance of the petitioner and the prayer sought for by the above writ petitioner are identical to

that in W.P.No.3576 of 1992, wherein this Court by an order dated 30.10.1998 interpreting Section 9 and 9A of the Tamil Nadu Cinemas

(Regulations) Act and Section 15 of the Tamil Nadu Entertainment Tax Act, has held as follows:

No doubt, the prescribed authority is empowered to compound the offence u/s 15 of the Tamil Nadu Entertainments Tax Act, 1939, and to

accept from any person, who has committed or is reasonably suspected for having committed an offence under the Tamil Nadu Entertainments Tax

Act, 1939, or the Rules made thereunder, by way of compensation of such offences which enables the licensing authority, namely, the third

respondent, by exercising his powers u/s 9(1) of the Tamil Nadu Cinemas (Regulation) Act, 1955, to revoke or suspend the licence by an order in

writing, where the holder of such licence had been permitted to compound such offence u/s 15 of the Tamil Nadu Entertainments Tax Act, 1939,

but, no licence shall be revoked or suspended u/s 9(1) of the Tamil Nadu Cinemas (Regulation) Act, 1955, even on the ground that the licensee

had been permitted to compound the offence u/s 15 of the Tamil Nadu Entertainments Tax Act, 1939, unless the licensee had been given a

reasonable opportunity of showing cause against such revocation or suspension, as per Section 9(2)(a) of the Tamil Nadu Cinemas (Regulation)

Act, 1955.

Of course, the licensing authority has to give reasons in writing for such revocation or suspension of licence, as contemplated u/s 9(3) of the Tamil

Nadu Cinemas (Regulation) Act, 1955. Therefore, it is clear that the prescribed authority is conferred with powers u/s 15 of the Tamil Nadu

Entertainments Tax Act, 1939 to compound the offence, where the licensee had committed, or is reasonably suspected of having committed an

offence under the Tamil Nadu Entertainments Tax Act, 1939, whereas, the powers conferred on the licensing authority viz., the third respondent

u/s 9 of the Tamil Nadu Cinemas (Regulation) Act, 1955, contemplates the licensing authority has to give reasonable opportunity of showing cause

to the proposed revocation and suspension and to give reasons in writing for such revocation and suspension, which, otherwise, necessitates to

consider the explanation offered by the licensee to hold an enquiry in that regard, and then pass final orders with reasons before revoking or

cancelling the licence with definite findings on the explanation offered by the licensee to the show-cause notice. Hence, the powers conferred on

the prescribed authority u/s 15 of the Tamil Nadu Entertainments Tax Act, 1939, is not similar to that of the powers conferred on the licensing

authority u/s 9 of the Tamil Nadu Cinemas (Regulation) Act, 1955. Section 15 of the Tamil Nadu Entertainments Tax Act, 1939, authorises the

prescribed authority to compound the offence even on the basis of reasonable suspicion. But, u/s 9(1) of the Tamil Nadu Cinemas (Regulation)

Act, 1939, the licensing authority is not authorised to revoke or suspend the licence, merely on the basis of such reasonable suspicion; on the other

hand, the licensing authority is under a statutory obligation to give a reasonable opportunity to the licensee to show cause against the revocation

and suspension; hold an enquiry; consider the explanation and pass orders, after giving a finding based on reasons for such revocation and

suspension, if so required. In other words, the mere compounding of the offence by the prescribed authority u/s 15 of the Tamil Nadu

Entertainments Tax Act, 1939, cannot, by itself, be a ground for the licensing authority to revoke or suspend the licence, while exercising the

power u/s 9(1) of the Tamil Nadu Cinemas (Regulation) Act, 1955, particularly when the licensee had offered his explanation.

Admittedly, even in the present case the petitioner has submitted his explanation on 20.6.1988 to the show-cause notice issued by the Collector

for the said violation. But, however, without considering the above explanation of the petitioner, the Collector, while taking note of the fact that the

petitioner has compounded the offence with Section 15 of the Tamil Nadu Entertainments Tax Act, suspended the licence by proceedings dated

26.11.1988, therefore, is arbitrary and unreasonable and vitiates for violation of authority of law and for non-application of mind. Hence, I am

obliged to set aside the order of the Collector made in D.Dis.(L) C.A. No.177 of 1988, dated 19.12.1991 and the writ petition is allowed. No

order as to costs.