SESH MAHAL Vs. GOVERNMENT OF ANDHRA PRADESH

JUDGEMENT

(1.) In this batch of writ petitions the question for consideration is regarding the mode of computation of the benefit conferred on the exhibitors by the various orders of the Government issued under Sec.- 19-A of the Andhra Pradesh Entertainments Tax Act, 1939 (hereinafter referred to as the Act)

(2.) For the purpose of understanding the point arising in the case, it will be sufficient to refer to the facts in W.P. No. 18126/89. Each petitioner is either proprietor of the theatre or the partner of thc firms running the theatres. Each of the petitioners has been paying entertainment tax in accordance with the provisions of Sec. 5 (1) of the Act. All the threatres in the writ petition are situated in Vijayawada which is now a municipal corporation. It is not in dispute that as provided in Sec. 5 (1) of the Act, the petitioners are liable to pay tax on the gross collection capacity per show multiplied by 22. While the petitioners were thus paying the tax, the Government issued G.O. Ms. No. 349 (Rev. CT III) Department dated 12-5-1988 stating that a concession is being given in the tax payable under Sec. 5(1) in respect of 'second run and repeatedly run telugu pictures (feature films)'. The concession is to be 30% of the tax in case of feature films whose censor certificate is aged above five years and below ten years and 50% in cases where the said certificate is beyond ten years. The concession is subject to the condition that the person claiming the concession is to furnish adequate proof of having run such feature films. The person has to make an application in the form mentioned in the G.O. and within the period limited there. After the above G.O. came into force, the Commissioner of Commercial Taxes (who is also the Commissioner for Entertainment tax) issued a circular AA2/1855/88 dated 30-1-1989 and it is this circular that is impugned in the presentbatch of writ petitions. The Commissioner, after referring to the provisions of G.O. Ms. No. 349 dt. 12-5-88 above mentioned observed that in the matter of computation of the concession granted by the said G.O. different officers are computing the relief by adopting different methods of calculation. After pointing out the said methods, the Commissioner commended one of the methods alone for computation and this method was obviously the one most favourable to the revenue. We shall refer to the details of this computation a little later. Suffice it to say at this stage that on the basis of the above said circular the concerned Entertainment Tax Officers proceeded to issue show cause notices to the petitioners proposing to make assessments or revised assessments and/ d emanding payment of further amounts. That is how the writ petitions have come to be filed.

(3.) Under Sec. 5(1) of the Act, an option is given for payment in lieu of tax otherwise payable under Sec. 4. Sub-clause (1) of Section 5 states that in lieu of tax payable under Sec.4, in the case of entertainments held in the theatres specified in column 2 of the Tab'e (mentioned in the section) and located in the local areas specified in the corresponding entries in cloumn 1 of the said Table, the proprietor thereof may exercise his option and, subject to such condition as may be prescribed, pay the amount of tax to the State Government every week, the tax specified in the corresponding entry in Col. 3 thereof. In the Table given in the said section, column 1 refers to the local authority in whose jurisdiction the theatres are situate, such as (a) Municipal Corporations, (b) Selection Grade Municipalities (c) Special Grade Municipalities, (d) First Grade Municipalities, (e) Second Grade Municipalities, (f) Third Grade Municipalities and (g) Gram Panchayats, Townships etc. Column 2 of the Table refers to various categories of theatres such as (i) Air Conditioned ; (ii) Air Cooled ; (iii) Ordinary. Column 3 mentions the method by which the amount of weekly tax is to be arrived at. In the case of Municipal Corporations such as Vijayawada, the amount of tax is 23% of the 'gross collection capacity' per show multiplied by 22, if the threatre is an Air Conditioned one. In the case of Air Cooled and Ordinary theatres, the rate of tax will be 22% and l9/t respectively. The multipliers vary from 22 to 7 depending upon the loca authority in which the theatre is located, the class of theatre, and the population of the said local authority. The above position can be easily understood by extracting the relevant provisions of the Table in so far as they are applicable to Municipal Corporations. <FRM>JUDGEMENT_60_ALT1_1991Html1.htm</FRM>