KAMLA PALACE Vs. STATE OF U P

JUDGEMENT

(1.) R. A. Sharma, J. In order to encourage the construction of new cinema houses in small towns having a population of not more than one lac, the Government of U. P. issued incentive scheme, vide order, dated September 17, 1983 providing for grant-in-aid in the form of partial exemption from payment of entertainment tax for a period of three to four years depending on the population of the towns, to newly constructed permanent cinema houses. The above G. O. was amended, vide G. O. , dated July 21, 1986. The latter G. O. was substituted by another G. O. , dated July 18, 1989, according to which the permanent cinema houses constructed within the specified period will be entitled to grant-in-aid in the form of exemption from payment of the entertainment tax for a period of three years on certain conditions, one of which is that such cinema houses will not keep their admission rate (inclusive of tax) more than Rs. 5. Para 2 of the last G. O. has been substituted by G. O. , dated May 14, 1992, according to which grant-in-aid to the newly constructed cinema houses under the incentive scheme will be for a period of three years to the extent of 75% of the amount of entertainment tax pay able in relation to the film exhibited in the cinema house in question. All other conditions contained in G. O. , dated July 18, 1989, including the condi tion of keeping admission rate (inclusive of tax) not more than Rs. 5, have been retained and are still operative. Therefore, such cinema houses which are getting grant-in-aid under the incentive scheme, cannot charge admission rate more than Rs, 5 (inclusive of the tax ).

(2.) PETITIONERS have constructed permanent cinema houses in small towns under the incentive scheme. They obtained licences under the U. P. Cinemas (Regulation) Act, 1955 and Rules framed thereunder, for carrying on their business.

(3.) THE Government has filed counter-affidavit and the petitioners have filed rejoinder-affidavits in reply thereto. We have heard learned counsel for the parties.