SHRIRANG TOURING TALKIES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) By order dated 18th November 1986 passed by this Court (Coram : P. R. Gokulakrishnan, C. J. and G. T. Nanavati, J.) Rule was issued in both the aforesaid matters on 18-11-1986. However, no stay as regards the orders impugned in the aforesaid petitions was granted and the petitioners were given two months' time to pay up the amount decided by the authorities as per Annexures A, B and C to the respective petition.

(2.) Having heard Mr. S. R. Shah, learned Advocate for the petitioners and Mr. K. T. Dave, Asstt. Government Pleader for the respondents in depth and detail and upon persual of the material on record, we fail to appreciate as to how the petitioners should be insisted upon for making the payment of the entertainment tax for the period/periods, they were prohibited from running the show. The word 'entertainment' has been defined in Sec. 2 (e) of the Gujarat Entertainments Tax Act, 1977 (hereinafter referred to as 'the Act') and provides that 'entertainment' includes any exhibition, performance, amusement, game or sport to which persons are admitted for payment. It has been specifically stated in the petition that due to monsoon, the petitioners under the orders of the Mamlatdar could not run the shows and were required to close down their cinema during different periods as detailed in the petition. The petitioners, therefore, asked for remission for payment of entertainment tax for the respective periods when admittedly the petitioners were not allowed to run the cinema shows. The Mamlatdar himself has been made a party. Both, the appellate authority and the revisional authority have not appreciated the matter in a proper perspective and by referring to the provisions of Sec. 6(6) of the Act, held inter alia, that a proprietor of a cinema who opted for payment of tax under sub-section (2) may at any time but not before the expiry of a period of twelve months by a notice in such form as may be prescribed, addressed to the prescribed officer, revoke his option from the commencement of any month following that in which the notice is given. Such a provision, according to us is obviously redundant in the facts and circumstances of the present case. In view of the material on record we are convinced that the authorities concerned have erroneously insisted for the payment of the entertainment tax for the periods when admittedly there were no entertainment shows at the instance of the authority concerned. Considering the submissions made by the learned Advocates for the parties and the material on record, we find that the impugned orders suffer from inherent infirmity and are illegal and cannot be sustained in law. The impugned orders in both the aforesaid petitions are liable to be quashed and set aside and are accordingly quashed and set aside. The respondent authority at the first stage will however, be entitled to reconsider the matter once again after giving the respective petitioner full opportunity of hearing in the light of the aforesaid observations. The respondents will, not however, levy any entertainment tax for the period for which the petitioners were not allowed to run the cinema shows. It is clarified that at the time of passing the fresh order the concerned officer will take into consideration the instructions/orders issued by the Government in this behalf from time to time. DIVECHA, J. (Concurring): I had an occasion to listen to the judgment of my learned Brother in this matter speaking for the Division Bench. I fully agree with the ultimate conclusion reached by us and he reasoning given by my learned Brother in supprot thereof. I, however, think it necessary to add a few words of my own. 2. The question arising in both these petitions is identical. It is to the effect whether or not a cinema owner should be saddled with the liability of 'Entertainment Tax' when he is prevented or prohibited from providing entertainment by means of his cinema. Since this basic question is common in both these petitions, we have thought it fit to dispose of both these petitions by these common judgments of ours.

(3.) The factual backdrop giving rise to these two petitions may be briefly summarised. In Special Civil Application No. 3125 of 1986 (the First Petition for convenience), the petitioner is a touring talkies or a so-called cinema theatre. It obtained a touring talkies licence under the Bombay Cinema Regulations Act, 1954 ('the Bombay Act' for brief). It also incurred liability to pay entertainment tax under the Gujarat Entertainments Tax Act, 1977 ('the Gujarat Act' for brief). Under Sec. 6(2) thereof, an application was made for payment of lumpsum tax fixed according to law. It appears that the lumpsum amount of tax fixed for the petitioner was at the rate of Rs. 516.53 paise per week. It appears that respondent No. 2 required the petitioner to keep its touring talkies closed from 9th July 1982 to 30th October 1982 in the year 1982 and from 17th June 1983 to 14th November 1983 in the year 1983 and from 6th July 1984 to 16th October 1984 in the year 1984. It appears that initially no entertainment tax was levied for the closed period. However, by an order passed by respondent No. 2 on 12th September 1984, the petitioner was saddled with the liability of entertainment tax to the tune of Rs. 27,154.72 paise for the aforesaid periods during which the petitioner's touring talkies was required to be kept closed. A copy of the aforesaid order is at Annexure-A to the First Petition. The aggrieved petitioner carried the matter in appeal before respondent No. 3. By the order passed by respondent No. 3 on 13th February 1986, the appeal came to be dismissed. Its copy is at Annexure-B to the First Petition. The petitioner's attempt to seek revision of the aforesaid orders at Annexures-A and B to the First Petition by respondent No. 4 proved to be an exercise in futility. His revisional application came to be rejected by the order passed by respondent No. 4 on 31st May 1986. Its copy is at Annexure-C to the First Petition. The aggrieved petitioner has thereupon moved this Court by means of this petition under Arts. 226 and 227 of the Constitution of India for questioning the correctness of the impugned order at Annexure-A to the First Petition as affirmed in appeal by the appellate order at Annexure-B thereto and in revision by the revisional order at Annexure-C thereto.