RAJESWARI THEATRE Vs. ENTERTAINMENT TAX OFFICER I TANUKU

JUDGEMENT

(1.) This writ petition has been filed questioning the demand made by the 1st respondent herein calling upon the petitioner to pay Rs. 47,530 towards differential entertainment tax payable for the year 1984-85 and from April 1, 198 5/02/1986. The demand was made on 31/05/1991.

(2.) The case of the petitioner is that on 25/03/1984, the theatre was inspected by the Executive Engineer, R & B. Through the communication dated 5/05/1984 addressed to the Collector, West Godavari District he intimated that the petitioner should be ordered to close the boxes class in the theatre permanently since the approaches were not in accordance with the Cinema Rules. As the petitioner also was simultaneously informed of the requirement to close the boxes class, it is stated that the petitioner had closed the boxes class with effect from 26/03/1984 reducing the seating capacity to 324 from 382.

(3.) It is also the case of the petitioner that he had entered into an agreement under section 5 of the A.P. Entertainments Tax Act, 1939, with the department for the year 1984-85 and part of the year 1985-86 showing that he was liable to pay entertainment tax on the basis of seating capacity of 324. The petitioner continued to pay entertainment tax every week pursuant to the agreement on the basis of the seating capacity of 324. The department received the tax and raised no objection at any time. While so, for the first time by the impugned demand notice dated 31/05/1991, the petitioner was asked to pay the differential tax of Rs. 47,530 on the ground that no order was passed by the licensing authority under the A.P. Cinemas (Regulation) Act, 1955, reducing the seating capacity from 382 to 324 and the B form licence also was to the effect that the seating capacity was 384. In the counter-affidavit filed on behalf of the respondent it is stated that the audit department had raised an objection against collecting entertainment tax on the basis of seating capacity of 324 instead of 382, as no order was passed reducing the seating capacity and the B form licence showed that the seating capacity was 382.