MUNICIPAL COUNCIL KOTTAYAM Vs. K MAHADEVA IYER

JUDGEMENT

(1.) THE question in these cases is whether the issue by the local authority of a stamp of the kind described in Clause (a) of subsection (1) of Section 5 of the kerala Local Authorities Entertainments Tax Act. 1961, namely, a stamp indicating the proper tax payable in respect of the ticket issued for admission to an entertainment, is a condition precedent to the recovery of the tax by the local authority from the proprietor of an entertainment. In Ismail v. Commr. Mattancherry Municipal Council, 1963 Ker LT 1080 = (AIR 1964 Ker 79) a Full bench of three Judges of this Court held (on the like provisions of the Traancore-Cochin Local Authorities Entertainments Tax Act, 1951) that it was except in a case covered by Section 4 of the Act--it is because that decision is doubted that these cases are before us--and, although the complaint there was the well-founded complaint that the local authority was collecting in advance the tax payable in respect of tickets to be issued to persons attending the entertainments without issuing stamps of the kind described, in other words, was collecting the prices of the stamps without issuing them, the relief granted in the following terms was much wider:

(2.) IT is necessary to read the following provisions of the Act -- we are ignoring the amendments introduced by Act 33 of 1969 which are not material. Section 3. General provisions regarding the levy of the tax and the rate of tax -Any local authority may levy a tax (hereinafter referred to as the entertainments tax) at a rate not less than ten per cent and not more than twenty-five per cent on each payment for admission to any entertainment. Section 4. Composition and consolidated payment of tax--On the application of the proprietor of any entertainment in respect of which the entertainments tax is payable under Section 3, the local authority may. subject to such rules as may be made by the Government in this behalf, compound the tax payable in respect of such entertainment for a consolidated payment. Section 5. Admission of persons to entertainments subject to tax-- (1) Save in the cases referred to in Section 4, no person shall be admitted for payment to any entertainment where the payment is subject to entertainments tax, except -

(3.) IT seems to us clear from a reading of these provisions --and we say this with great respect to the contrary view expressed in 1963 Ker LT 1080 = (AIR 1964 ker 79) that the tax is squarely imposed on the proprietor, or the entertainer, and in no wise on [the entertaince, if we might use that expression. Section 5 only provides the machinery for ensuring that the tax is paid on each payment for admission as required by Section 3, and compliance with its provisions is in no sense a condition precedent to the collection of the tax from the proprietor. The legislative entry, Entry 62 of List II. "taxes on luxuries, including taxes on entertainments, amusements, betting and gambling" permits of the imposition of the tax either on the proprietor or on the entertainee or on both -- see Western india Theatres v. Cantonment Board, Poona, AIR 1959 SC 582--and when, as in this case, the statute imposing the tax makes it recoverable from a person on whom it can properly be imposed, one would require very clear provision to that effect to hold that the tax is really imposed not on him but on some other person and that he is only an instrument or agency for collection, a statutory agent as he is sometimes called, paying the tax in the first instance and passing it on to the other person. (It is said that even for making the tax recoverable from him in the first instance he must be a person on whom it can be lawfully imposed and that therefore that is no ground for holding that the tax is not to be passed on. That might well be so but what we are saying is that there must be clear provision to the effect that the tax is really imposed on some other person and is to be passed on to him) Far from there being such provision in the Act, we are unable to find the least indication that the tax is really payable by the entertainee and not by the proprietor from whom it is undisputedly recoverable,