SANGAM THEATRES PRIVATE LIMITED Vs. ENTERTAINMENT TAX OFFICER

JUDGEMENT

(1.) Challenge in this petition under Article 226 of the Constitution of India, 1950, (in short, the Constitution) is to the order dated 8.12.1999 passed- by the Entertain- ment Tax officer (in short, ETO); order dt. 23.3.2000 passed by the Deputy Commis- sioner Entertainment Tax-cum-Appellate Authority (in short the Appellate Authority) and order dt. 12/07/2000 passed by the Lt. Governor Delhi. The orders have been passed under the Delhi Entertainment and Betting Tax Act, 1996, (in short the Act).

(2.) Background in which the orders came to be passed is essentially as follows :- Petitioner is an exhibitor of cinematographic films. A premiere show of a movie titled Sangharsh was organised by M/s. Abalone Network. Petitioner had been appreached by the said organisation for having the show on 2/09/1999 at 6.15 pm. Organisers had entered into an arrangement with the petitioner to sell 312 tickets at the rate of Rs. 500.00 each, and the rest of the tickets were to be complimentary at normal rates and total tax was to be paid by them to the petitioner so that the same was deposited with the Department. They also agreed to give normal theater rent. After receipt of the said offer, petitioner wrote to the ETO requesting him to grant permission to hold the premiere show on the arrangement referred to above, and 'a sum of Rs. 70706.42 was deposited towards tax on the basis of the said arrangement referred to above. An undertaking was also given before the ETO as regards the ar- rangement. Permission was granted by the ETO to hold the show on payment of enter- tainment tax on regular houseful capacity plus tax on special tickets for the said show. Petitioner's case is that it had only permitted the organisers to sell 312 tickets of Rs. 500.00 each and rest was permitted to be on complimentary basis and normal tickets were issued. Officials, of the concerned Department conducted an inspection. Petitioner came to know that the organisers had issued cards to various persons. Petitioner did not permit it and all the cards were destroyed and entry was allowed on .the basis of regular cinema tickets, except 312 persons, who were permitted on the tickets of Rs. 500.00 each, as permitted by the ETO. There was delay in preparing the DE II/Form 7 which could be prepared only at about 8.30 p.m. A show cause notice was issued by the Additional ETO on 14.9.1999 alleging that though only 312 tickets of Rs. 500.00 each were to be sold and the rest of the tickets were to be sold at normal .rate, the entire tickets pertaining to the show were sold at the rate of Rs. 500.00. Petitioner was required to show cause as to why additional levy of tax was not to be imposed. Petitioner submitted its reply stating that there was no discrepancy, as al- leged. The ETO did not accept the contention, and levied extra demand of Rs. 1,34,419.00 by treating that all the tickets were sold for Rs. 500.00 each. Petitioner filed an appeal before the Appellate Authority, who vide order dated 23.3.2000 granted relief for 50 seats. An appeal before the Lt. Governor under Section 42 of the Act did not bring any relief to the petitioner.

(3.) According to the petitioner the entire demand raised is based on surmises and conjectures. It is submitted that there was no material to establish that the petitioner had sold any ticket beyond the authorised rates. That being so, there was no scope for making a best judgment assessment raising extra demand. Further, the orders do not contain reasons or basis for the conclusion. Shri V.K. Shall, on the other hand, stated that inspection was made by an inspector and one person was found holding a ticket for Rs. 500.00 which was not one of the 312 tickets authorised to be sold and that being so, considering the scope of manipulations, extra demand was raised and maintained substantially by the first Appellate Authority and the Lt. Governor. According to him there is total prohibition against sale of tickets from a place other than the enclosure set apart by the proprietor of the cinema.