R. SUNDARARAJULU NAIDU, REPRESENTED BY POWER AGENT J.D. FERNANDEZ Vs. ENTERTAINMENT TAX OFFICER, MADURAI VII

JUDGEMENT

(1.) This petition has been filed to quash the order dated 20th April, 1963, of the Entertainment Tax Officer, Madurai VII, calling upon the petitioner to pay a further sum of Rs. 21,539 -32 being the balance of tax due and payable by the petitioner in respect of the period from 30th April, 1961 to 24th September, 1962. The petitioner is the lessee of the Imperial Cinema, Madurai. He is the holder of a permit in Form IV, issued under R. 21 of the Madras Entertainment Tax Rules. He was filing returns as required by the provisions of the Madras Entertainment Act, 1939. The returns were accepted, taxes levied and also collected from him by the departmental authorities. While so, during a surprise inspection of the theatre at 10 -40 P.M. on 25th September, 1962, the departmental officers seized records such as pocket note -books, diary etc. from the theatre premises. The Officer found from these records that the petitioner had suppressed the true income by sale of tickets during the relevant period. Accordingly, the Officer concerned issued notice calling upon the petitioner to explain the various irregularities, as found in the records seized from him. The petitioner submitted his explanation. The Department accepted his explanation in regard to some of the items, and finally concluded that a sum of Rs. 21,529 -32 was still due from the petitioner, and accordingly issued the notice of assessment and demand dated 30th April, 1963, calling upon the petitioner to pay the said amount within 21 days from the date of service of the notice and also intimating the petitioner that failing which the amount would be recovered as provided in S. 14 of the Act. In these circumstances, the petitioner has rushed to this Court praying for the issue of a writ of certiorari to call for the records and quash the order dated 30th April, 1963.

(2.) In this writ petition, the petitioner has submitted that he is not to be assessed to entertainment tax on the basis of the whole gross collections, that the Rules do not provide for the normal safeguards for the protection of the record's seized by the Officers, and that the Department having accepted the returns submitted by him and levied tax and also collected them, there is no scope for proceedings to make the assessment on best judgment basis.

(3.) The contention of the Department is that the petitioner ought to have availed himself of the remedy by way of appeal as provided in the Act, that the petitioner did not keep true and proper accounts during the relevant period but was keeping secret accounts which were unearthed at the time of the inspection and that though returns were submitted they were neither correct nor complete and as such the provisions of R. 26 -A (best judgment assessment) are clearly attracted to the facts of the case.