K BABJIRAO Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) 1. The question in both the Writ Petitions is the same. It is sufficient if I refer to the facts in WP 2186/1974. The petitioner is the proprietor of a temporary cinema house known as Sri Venkateswara Touring Talkies. He was granted a permit In Form IV as prescribed by Rule 20 read with Sec. 6 of the Andhra Pradesh Entertainments Tax Act 1939. Pursuant to the terms and conditions of the permit he was collecting the Enter talnments Tax, remitting the same into the Treasury and submitting weekly returns to the Entertainments Tax Officer. While so, on 19-3-1974 there was an inspection by the Deputy Commercial Tax Officer. Bobblli. In the course of the Inspection two account books were seized. The account books repealed that during the period 7-12-1972 to 8-8-1973 the groti recepts on admission to the cinema Was Rs. 89,376 88 whereas the gross receipts for that period according to the returns filed by the proprietor was Rs. 32.334-60. Thereupon the Assistant Commercial Tax Officer (The Entertainments Tax Officer under the Act) Issued a notice to the petitioner to show cause why he should not pay additional Entertainments Tax of Rs. 14,904-48 and R.R. Tax of Rs. 6,971-40 (R.R Tax it may be mentioned Is Refugee Relief Tax collected on the same lines as the Entertainment Tax). Thereafter on 6-4-1974 the Assistant Commercial Tax Officer, passed final orders directing the petitioner to pay the additional Entertainments Tax and R.R. Tax within one week from that date. The petitioner questions this demand on various grounds.

(2.) Sri S.Parvatha Rao, learnedcounsel for the petitioner contended that the Act and the Rules contained no provision for reopening escaped assessments and It was therefore, not open to the Entertainments Tax Officer to demand additional tax for the period from 7-2-1972 to 8-8-1973 when the weekly returns submitted during the period has already been accepted and the tax paid in accordance with the weekly returns On the other hand, Sri D. Venkatappaiah Sastry, learned Government Pleader contended that there was no question of reopening any assessment since no assessment was ever made and that the very conditions of the permit provided for the demand of tax which had not been paid.

(3.) Section 4 of the Andhra Pradeih Entertainments Tax Act provides that, on each payment for admission to any entertainment, there shall be levied and paid to the State Government a tax calculated at the rates mentioned in the Section Section 6 (I) prescribes that no person shall be admitted for payment to any entertainment where the payment Is subject to the Entertainments Tax unless the proprietor has made arrangements for furnishing returns of the payments for admission to the entertainment and has given security for the payment of the Entertainments Tax. Part III of the Entertainments Tax Rules 1939 prescribes the mode of arrangement. I shall refer to the same presently. Section 7 prescribes that the Entertainments Tax shall be levied in respect of each perion admitted for payment and shall be calculated and paid on the number of such tdmisslons and that the En ertalnmentt Tax shall be recoverable from ihe proprietor. Sections 8 and 9, as they originally stood, provided for entertainments exempted from payment of tax' and 'refunds in certain cases'. By the Amending Act No. 3 of 1974 which came into force subsequent to the period with which we are concerned new Sections 8 and 9 were introduced. New Seccion 9 which may be relevant for our discussion provides that every proprietor of an entertainment shall submit such returns relating to payments for admission to such authority, In such manner and within such time as may be prescribed. Section 9(2) provides that If the prescribed authoi ity is satisfied that any return submitted under sub-section (I) is correct and complete it shall assess the amount of tax payable by the proprietor on the basis thereof. Section 9(3) provides that if no return is submitted before the prescribed date or if the return submitted appears to be Incorrect or Incomplete, the prescribed authority shall, after giving the proprietor an opportuity of proving the correctness and completeness of any return submitted by him or that no return was due Irom him.and after making such enquiry as it considers necessary, assess, to the best of its judgment the amount of tax payable by the proprietor. Secticn II empowers authorised officers to inspect the place of entertainments for the purpose of seeing whether the provisions of the Act and the rules made thereunder are being complied with. Section 11 (2-A) enables the Inspecting officer to seize tickets, records, documents and registers if he has reason to suspect that there is evasion of the payment of any tax due under the Act.