NATRAJ CHHABIGRIH SIGRA Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) A Divisional Bench has referred for reconsideration, a decision' of earlier Division Bench in Civil Misc. Writ Petition No. 1190 of 1994 (Kamla Palace v. State of U. P.) decided on 10/07/1995, in view of the decision of the Supreme Court in (1995) 3 SCC 86 : (AIR 1995 SC 885) (State of Bihar v. Sachidanand Kumar Prasad Sinha). In Kamla Palace (supra) this Court held proviso to sub-section (1) of Section 3-A of the Uttar Pradesh Entertainment and Betting Tax Act, 1979 (hereinafter referred to as `the Act') and the Government Orders issued thereunder as ultra vices.

(2.) Short facts are, Uttar Pradesh Legislature by way of Uttar Pradesh Entertainment and Betting Tax (Amendment) Act, 1992 (U. P. Act No. 14 of 1992), published on 11/04/1992, introduced amendment in Section 3-A of the Act, which authorised the proprietor of a Cinema to realise an extra charge of twenty-five paise per ticket for admission to be utilised for maintenance of the cinema premises. But by proviso excluded the proprietor of such cinema receiving any incentive scheme from the State Government. Earlier by the Government Order dated 21/07/1986 grant-in aid was provided to the newly constructed cinemas in a town not having a population of more than one lac. Under this such cirama-exhibitors were entitled for cent per cent tax exemption for the first year, seventy-five percent. in the second year and fifty per cent in the third year and for an area having population less than 20,000, cent per cent. tax exemption for two years, seventy-five percent. For the third year and fifty percent. For the forth and fifth years, subject to condition that admission rate shall not be more than rupees five. This was substituted by another Government Order dated 18/07/1989, also as an incentive to the newly constricted cinemas granting total exemption from payment of entertainment tax for the first two years, seventy-five per cent. for the third year. Thereafter another Government Order dated 14/05/1992, granted incentive to the newly constructed cinema-houses for a period of three years, granting exemption to the extent of seventy-five per cent of the amount of entertainment tax payable by it. The condition of not charging admission fee at more than rupees five was maintained.

(3.) Then came another Government Order on 15/11/1994, giving incentives to an other, class of cinema-owners, whose cinema exhibition was closed before 1/01/1992, and continued to be closed till 15/11/1994. Under this proprietors were entitled to incentive equal to thirty percent of the entertainment tax payable for a period of three years provided they enter into agreement that they would continue to run the cinema-hall even after the lapse of incentive period for a further period of five years and, if they fail, the entire amount of incentive received viz. exemption from tax would be recovered as arrears of land revenue. Section 3 A (1) (a) introduced through U. P. Act No. 14 of 1992, entitled to the cinema-owners to charge 0.25 paise per ticket as maintenance charge being exempt from tax provided it is only utilised for the maintenance of cinema premises: By earlier amendment, facility to centrally air-cooled and centrally air-conditioned cinemas by permitting additional charge of ten paise and twenty paise respectively was granted. Subsequently, by Government Order dated 17/10/1994, collection of maintenance charge, aforesaid, was further enhanced to rupee one per ticket. The petitioner has challenged the proviso of Section 3-A (1), which excludes proprietors of cinema receiving grant-in-aid from the State Government under any incentive scheme from realising this extra charge under clause (a) to be discriminatory and violative of Article 14 of the Constitution.