ENTERTAINMENT TAX OFFICER Vs. AMBAE PICTURE PALACE

JUDGEMENT

(1.) This is an appeal on behalf of the Entertainment Tax Officer-I, Khammam and the State of A. P. against the judgment and decree of the High court of A. P. dated 3/04/1986 whereby a division bench of the High court struck down Section 1 of Act No. 16 of 1985 [the A. P. Entertainments Tax (Amendment) Act, 1985] to the extent of its applicability retrospectively between 7/09/198 4/10/1984.

(2.) To appreciate the point it is necessary to deal with the history of the Entertainments Tax Acts in A. P.

(3.) The A. P. Entertainments Tax Act, 1939 (Act No. X of 1939 provided for levy of tax at the fixed rates on the basis of percentage of payment made by a person for admission to any entertainment. However, in 1976 by Act No. 58 of 1976, Section 4-C was introduced under which tax was levied on entertainment show on the basis of certain percentage of the gross collection capacity of the show within the jurisdiction of any local authority whose population does not exceed 25,000. 00. Under Section 5, as introduced by that Act, it was open to a proprietor of the cinema to enter into an agreement with the authority concerned to compound the tax payable under Section 4-C for a fixed sum in accordance with the formula prescribed under Section 5. This continued till 31/12/1983.