LIBERTY TALKIES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) A short question of considerable importance relating to the construction of the Bombay Entertainments Duty Act 1923 arises in the present petitions. The petitions are twelve in number and facts giving rise to the petitions are for all practical purposes identical barring only the difference in the amounts of entertainments duty demanded by the Collector and the periods for which they are so demanded. It will therefore be sufficient to state the facts of Petition No. 595 of 1962 in so far as they bear upon the question in controversy in the present petitions. The petitioners are proprietors of a Cinema Theatre in the town of Junagadh and they carry on business of exhibiting motion pictures at the said theatre. Prior to 30th April 1960 the entertainments duty was charged by applying the statutory percentage to the total amount received by the petitioners from the cinema-goers both in respect of admission to the cinema theatre as also on account of entertainments duty. As a result of a circular issued by the Collector on 19th March 1960 the entertainments duty was levied from and after 30th April 1960 by applying the statutory percentage only to the amount received by the petitioners from the cinema-goers for admission to the cinema theatre without taking into account the amount collected on account of entertainments duty. This state of affairs continued until 11th January 1962 when the Government of Gujarat issued a Memorandum pointing out that the method that was being followed by the Collector was wrong and that the entertainments duty was leviable on the total amount received by the petitioners from the cinema-goers inclusive of the amount collected on account of entertainments duty. The result was that from 31st January 1462 the Mamlatdar insisted that the entertainments duty was leviable on the total amount received by the petitioners from the cinema-goers and since then the petitioners have been paying entertainments duty on the basis that it is leviable on the total amount received from the cinema-goers. The Mamlatdar also in pursuance of the memorandum of the Government demanded from the petitioners a sum of Rs. 18 215.59 ps. being the difference in the amount of entertainments duty actually paid by the petitioners and the amount of entertainments duty leviable on the basis of the vies set out in the Government Memorandum The petitioners thereupon preferred the present petition challenging the correctness of the view taken in the Government Memorandum as also the validity of the notice issued by the Mamlatdar demanding payment of the sum of Rs. 18 215.59 ps. from the petitioners. Similar petitions were also filed by the proprietors of other cinema-theatres. These petitions raise a common question of law relating to the interpretation of the provisions of the Bombay Entertainments Duty Act 1923 and the question is whether on a true construction of the said provisions the entertainments duty is leviable only on the amount charged by the petitioners specifically for admission to the cinema-theatre or it is leviable also on the amount collected by the petitioners on account of entertainments duty.

(2.) In order to arrive at a proper determination of this question it is necessary to understand the scheme of the Bombay Entertainments Duty Act 1923 The Act as the preamble shows was enacted to provide for the levy of a duty in respect of admission to entertainments. Sec. 2 clause (a) defines entertainment to include any exhibition performance amusement game or sport to which persons are admitted for payment and the exhibition of motion pictures in the cinema theatre of the petitioners was admittedly an entertainment within the meaning of this definition. Sec. 2 clause (b) gives an inclusive definition of payment for admission in the following terms :

(3.) It will be seen that sec. 3 which is the charging section provides for the levy of entertainments duty on all payments for admission to an entertainment. The word all preceding the words payments for admission is an all embracing word intended to bring within the scope and ambit of the words it governs all that can possibly be included in them. This word is intended to remove any limitative or restrictive inhibition which might otherwise affect the full and natural content of the words it governs and it is therefore clear that the Legislature meant to include within the subject matter of the charge all payments for admission and did not intend that any payment for admission should be left out from the charge of the duty. But that raises the question : what is included within the connotation of the expression payment for admission ? Payment for admission is defined in sec. 2(b) but that is an inclusive definition and what is set out in the inclusive clause cannot prevent the expression receiving its ordinary popular and natural sense wherever that would be properly applicable. The inclusive definition is given for the purpose of enlarging and not restricting the meaning of payment for admission and that which independently of the inclusive definition in ordinary language would properly be regarded as payment for admission does not cease to be so because it does not fall within the inclusive clause. It is therefore necessary to understand what the expression payment for admission means according to the plain natural connotation of its words. Does it include an amount realised from the purchaser on account of the entertainments duty ? Now there is no doubt that where the proprietor charges to the purchaser an amount on account of the entertainments duty the purchaser is required to pay such amount to the proprietor for the purpose of gaining admission to the entertainment and it is therefore as much a payment for admission to the entertainment as the amount charged by the proprietor specifically for admission to the entertainment. The amount charged by the proprietor on account of the entertainments duty is an amount which has to be paid by the purchaser for securing admission to the entertainment and it is therefore a payment for admission within the plain natural connotation of the expression. Taking the illustration given in the course of the argument where the proprietor charges one rupee 20 paise to the purchaser out of which rupee one is specifically for admission to the entertainment and 20 paise is on account of the entertainments duty not only is rupee one a payment for admission but 20 paise is also a payment for admission for without payment of 20 paise the proprietor would not admit the purchaser to the entertainment and the payment of 20 paise is made by the purchaser for securing admission to the entertainment. Both the payments one of rupee one and the other of 20 paise are therefore payments for admission and under sec. 3 entertainments duty would be liable on both the payments. It is also possible to regard payment on account of the entertainments duty as a payment falling within sec. 2(b)(iv). Sec. 2(b)(iv) refers to a payment for any purpose whatsoever connected with an entertainment which a person is required to make as a part of attending or continuing to attend the entertainment in addition to the payment if any for admission to the entertainment. Now entertainments duty is certainly connected with the entertainment and a payment made by the purchaser on account of the entertainments duty would therefore be a payment for a purpose connected with the entertainment and since the purchaser is required to make such payment as a condition of attending the entertainment it would be a payment for admission within the meaning of sec. 2(b)(iv). Moreover it may be noticed that if the amount charged on account of entertainments duty is not shown separately but is merged in the price of admission and the price of admission is fixed as one single composite amount the whole of it would admittedly be a payment for admission : then on principle why should it make any difference if the price of admission is split up and the amount charged on account of entertainments duty is separately shown. The character of the payment cannot change according as it included as part of the price of admission or is shown as a separate item. If it is payment for admission in the one case it must be payment for admission in the other.