SIKENDER PICTURE PALACE Vs. ASSISTANT COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner is a cinema exhibiting films at Udayagiri, Nellore district. It had been paying tax under section 4(1) of the Andhra Pradesh Entertainments Tax Act, 1939 (hereinafter referred to as "the Act"). It is stated that the petitioner entered into an agreement with the Entertainment Tax Officer under the then section 5 of the Act agreeing to pay the tax under that provision for the period 27/08/1983 to Aug 26/08/1984. During that period, the State Government issued Ordinance No. 9 of 198 4/03/1984. amending section 5 of the act with the retrospective effect from 1/01/1984. Under the amended provisions of section 5, the exhibitor is given option to pay the entertainment tax specified thereunder in lieu of the tax payable under section 4 of the Act. It is stated in the counter-affidavit that the Entertainments Tax Officer visited the petitioner-theatre on 14/04/1984 and that the proprietor of the petitioner-theatre had given the following statement to him on that date :

(2.) It is submitted by the learned counsel for the petitioner that the Entertainments Tax Officer has not granted any permit in form IV to the petitioner as required under section 5 read with rule 27 of the A.P. Entertainment Tax Rules, 1939, determining the amount of tax payable under section 5 and, therefore, the petitioner is not liable to pay tax under section 5 of the Act. In other words, the contention of the learned counsel is that the petitioner is liable to pay tax only under section 4 of the Act.

(3.) We find force in the contention of the learned counsel for the petitioner. Section 5 provides that in lieu of tax payable under section 4, the proprietor of any theatre may, at his option and subject to such conditions as may be prescribed, pay the tax to the State Government every week as specified in the section. Rule 27 provides that the proprietor of the theatre, who opts to pay the tax under section 5, shall signify his intention to do so by applying to the Entertainment Tax Officer in form III furnishing all the information. The Entertainments Tax Officer is required to verify the particulars furnished and if he is satisfied that the proprietor is eligible, shall determine the amount and the nature of security to be furnished by the proprietor for the proper payment of the tax and the time within which such security should be furnished. After the security is furnished, the Entertainment Tax Officer shall grant the proprietor a permit in form IV. Then only the proprietor will be liable to pay the tax under section 5 of the Act. The procedure prescribed under rule 27 has not been followed by the Entertainment Tax Officer and there is no dispute that in the instant case, he has not issued any permit in form IV. Therefore, the petitioner is justified in stating that he is liable to pay tax only under section 4 of the Act.