LIBERTY TALKIES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Under the Bombay Entertainments Duty Act 1 of 1923 entertainment duty is chargeable on the total collections from the visitors to a theatre. On March 18, 1960 the Collector, Junagarh issued instructions to his subordinate officers directing them to levy entertainment duty at the prescribed rate only on the net price receivable by the proprietor of the theatre and not on the total amount including entertainment duty collected from the visitOrs. Entertainment duty so computed was paid till January 1962 by the appellants who own a theatre at Junagadh.

(2.) On January 11, 1962 the Government of Gujarat issued a memorandum that "the duty (entertainment duty) is a percentage of the payment for admission i.e. the amount which a person pays for being admitted to witness the entertainment, inclusive of the various items mentioned in Clause (b) of Section 2 of the Bombay Entertainment Duty Act, 1923. The amount which a person pays includes both sums-(i) what the Manager has to pay by way of. duty; and (ii) what the Manager can retain as Net receipts' and hence the duty has to be charged on the total amount payable by the person buying the ticket, including any sum charged separately by way of duty." Pursuant to that notification entertainment duty was levied on the gross sum levied and paid by the visitors for admission to the theatre.

(3.) By a petition moved in the High Court of Gujarat the appellants challenged the validity of the memorandum dated January 11, 1962 and the notice of demand issued pursuant thereto and urged that the primary liability for payment of entertainment duty is by the Act imposed upon the visitor to the theatre, and that the proprietor of the theatre is merely an agent of the Government for collecting the duty : and that the proprietor has under the Act to pay the duty which he collects from the visitors; and that he cannot be required to pay an amount which he does not collect from the visitOrs. The High Court rejected the petitions and against the order of the High Court this appeal has been preferred.