STATE OF ORISSA Vs. RAVI TALKIES

JUDGEMENT

(1.) These appeals by special leave raise a common question regarding the validity of the Orissa Entertainment Tax Act, 1946 (hereinafter referred to as 'The Act'). The question is whether in the absence of a machinery regarding assessment being provided either in the Act or in the Orissa Entertainment Tax Rules, 1947 (hereinafter referred to as 'the Rules') a demand for payment of excess entertainment tax could be validly made under the provisions of the Act.

(2.) Civil Appeals Nos. 312-315 of 1974 filed by Ravi Talkies relate to demand for excess entertainment taxes for periods 1-9-1965 to 30-9-1968; Civil Appeal No. 316 of 1974 filed by Balasore Talkies (P) Ltd., relates to demand for the period from March 1961 to June 1962; and Civil Appeal No. 317 of 1974 filed by Shri Vithoba Talkies relate to demand for the period from November 14, 1958 to December 31, 1959. The said demands have been quashed by the Orissa High Court by the impugned judgments.

(3.) The Act was enacted to provide for the levy of a tax on amusements and other entertainments. In Section 4 provision was made for levy and payment to the State Government of a tax on all payments for admission to any entertainment at such rates as are prescribed by notification by the State Government. It enables the State Government to fix the said rates on the basis of the price of the ticket issued for admission to the place of entertainment. Section 5 made provision for composition and payment of a fixed sum as tax on the application of the proprietor of any entertainment in respect of which tax was payable under Section 4. By Section 6 it was prescribed that save in the cases referred to in Section 5 no person shall be admitted for payment to any entertainment where the payment is subject to tax except with a ticket stamped with an impressed, embossed, engraved or adhesive stamp issued by the State Government. In the said Section provision was also made for furnishing the returns of the payment for admissions to any entertainment. In sub-section (1) of Section 7 it was prescribed that the tax shall be levied in respect of each person admitted for payment and in the case of admission by stamped ticket the tax shall be paid by means of the stamp on the ticket and in the case of admission otherwise than by stamped ticket the tax shall be calculated and paid on the number of admissions. In sub-section (2) of Section 7 it was provided that the tax in the case of admission otherwise than by stamped ticket shall be recoverable from the proprietor. Section 8 empowers the State Government to grant exemption to entertainments from payment of tax. Section 10 lays down that any amount due on account of tax or penalty can be recovered by the State Government as if it were an arrear of land revenue. Section 11 provided that any officer authorised by the State Government in that behalf may enter any place of entertainment while the entertainment is proceeding and any place ordinarily used as a place of entertainment at any reasonable time for the purpose of seeing whether the provisions of the Act or any rules made thereunder are being complied with. Section 14 made provision for imposition of penalty by the Commercial Tax Officer if the proprietor of any entertainment admits any person for payment to any place of entertainment in contravention of the provisions of Section 6, or falls, without sufficient cause, to pay the tax due from him within the time prescribed, or fraudulently avades the payment of arrear tax due under the Act, or contravenes any of the provisions of the Act. The amount of penalty that could be imposed was Rs. 250/- or double the amount of tax, if any evaded, whichever is greater. In the proviso to sub-section (2) of Section 14 it was prescribed that before imposing a penalty the proprietor shall, in every case, be given a reasonable opportunity of adducing evidence in answer to the allegations made against him and of being heard. Sub-section (3) of Section 14 made provision for filing of an appeal to the Assistant Commissioner of Sales Tax against an order imposing penalty passed by the Commercial Tax Officer under sub-section (2) of Section 14. A revisional power was conferred on the Commissioner under sub-section (5) of Section 14 to revise, on his own motion or on an application by any person aggrieved by an order made under sub-section (4) of Section 14.