ARMAN CINEMA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) All these petitions based on identical facts involve common question of law and, therefore, they are heard together and disposed of by this common judgment. The petitioners in these Special Civil Applications are owners of cinema theatres. The petitioners allege that their cinema theatres are situated in village area having total population of less than ten thousand and these theatres are licensed under the Bombay Cinema (Regulations) Act, 1953 and Janta Cinema Licence is given to each of these theatres. The Gujarat Entertainments Tax Act, 1977 ("Act" for short) is applicable to these cinema theatres. Under Sec. 3 of the Act, the petitioners are liable to pay entertainment tax. Under Sec. 6 of the Act, the proprietor of the cinema theatre is given the benefit of consolidation of tax subject to the procedure laid down therein provided cinema theatre is in the designated area or specified area. As per Sec. 6 of the Act the proprietor of a cinema has an option to pay consolidated entertainment tax at the rates specified in sub-sec. (5) of Sec. 6 of the Act. The proprietor of the cinema theatre shall make an application in the prescribed form within 90 days from the date of commencement of the Gujarat Entertainments Tax (Amendment) Act, 1982 and any person who becomes proprietor thereafter shall submit an application within 60 days from the date of starting the theatre. The proprietor is permitted to pay tax weekly at the rates prescribed under sub-sec. (5) of Sec. 6 of the Act. Some conditions have also been prescribed therein. The proprietor shall be deemed to have held more than seven shows in a week. The amount of tax shall be paid irrespective of the fact that actual number of shows in a week held are less than the declaration made in this behalf. It is also specified that even if film exempted from payment of entertainment tax has been shown, no concession shall be granted on that count. The proprietor shall intimate to the prescribed officer in advance at least before seven days of every proposed change or variation in the gross tax collection capacity of the cinema by virtue of any modification or revision of the rates of admission or any change in the accommodation or classes of accommodation.

(2.) The petitioners in these cases had exercised their option under Sec. 6 of the Act and agreed to pay entertainment tax in the consolidation form. Thereby they are paying tax at lesser rate. In the case of cinema in designated area other than touring cinema, proprietor need only pay 15% of the gross collection of show multiplied by 12 irrespective of the number of shows held in a week. Section 29 of the Act empowers the State Government to exempt either wholly or partly an entertainment or class of entertainments from any payment of tax subject to such condition as may be specified. Section 29 reads as follows :-

(3.) The petitioners in this Special Civil Applications are given separate exemption order by the Government. In Special Civil Application No. 2764 of 1987 Annexure- C order was passed on 25-3-1984 and granted exemption to the petitioners therein. The petitioners' theatre being Janta Cinema Theatre, exemption is granted from payment of entertainment tax. As per Annexure-C order, for the 1st year there is total exemption, for the 2nd year there is 75% exemption, for the 3rd year there is 50% exemption and for the 4th year there is 25% exemption and from 5th year, there will not be any exemption from payment of entertainment tax. In the case of petitioners in Special Civil Application No. 2764 of 1987, Annexure-A permission was granted for payment of entertainment tax by way of consolidated tax, and weekly amount payable by them was Rs. 1,522.00. Similar permission for the consolidation has been granted to other petitioners in various Special Civil Applications. The contention raised by the petitioners' Counsel is that these petitioners have opted to pay consolidated amount of tax and they are also entitled to get the benefit of exemption granted under Sec. 29(1)(b) of the Act. Therefore, according to these petitioners, they are not liable to pay the full consolidated amount of tax, but they are liable to pay that amount subject to exemption granted under Sec. 29 of the Act. These petitioners allege that they have paid consolidated amount of tax payable by them subject to the exemption. They received a communication from the Entertainment Tax Commissioner of the Gujarat State, wherein it is clarified that Janta Cinema Theatre cannot be granted benefits under Sec. 29 as well as Sec. 6 of the Act. It was further directed that if it was found that Janta Cinema Theatre situated in various districts had been paying entertainment tax at the rate of 15% or 16% in the alternative of Sec. 6, the recovery proceedings shall be started immediately under Sec. 3 of the Act and if the notification dated 11-12-1979 was applicable, the amount shall accordingly be recovered from such persons. It was stated that the owners of Janta Cinema Theatres are not entitled to get two benefits.