MADANLAL BANSAL Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE petitioners, under due licences, carry on the business of exhibition of films on television through recorded cassettes. They challenge the demand of duty levied on such exhibition of films through Video Cassette Recorders, chargeable per show in terms of the provisions of the M. P. Entertainments Duty and Advertisements Tax Act, 1936, as amended by M. P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983. The contention is that the levy being on entertainment should only be per person to whom entertainment is provided and not per show.

(2.) THE M. P. Entertainments Duty and Advertisements Tax Act, 1936, provides for levy of a duty in respect of admission to theatres, cinemas and other places of public entertainment. According to Section 2 (a), the expression "admission to an entertainment" includes admission to any place in which the entertainment is held. Section 3, requires every proprietor of an entertainment to pay to the State Government a duty in respect of every payment for admission to the entertainment. The duty payable was initially 33 per cent. This was enhanced to 33 1/3 per cent by M. P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1965. When the new technique of exhibition of films by Video Cassette Recorder developed and exhibition became frequent in this State also, the State Government, in exercise of power under Section 5 of the M. P. Cinema (Regulation) Act, 1952, made M. P. Cinemas (Exhibition of Films by Video Cassette Recorder) Licensing Rules, 1983. Simultaneously, the M. P. Entertainments Duty and Advertisements Tax Act, 1936, was also amended by M. P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983. The validity of these Licensing Rules of 1983 was upheld by a Division Bench of this Court in Central Circuit Cine Association v. State of M. P. , 1986 MPLJ 641.

(3.) BY the M. P. Entertainments Duty and Advertisements Tax (Amendment) Act, 1983, every proprietor had to pay to the State Government entertainment duty on cinema shows on exhibition of films through V. C. R. on television screen at the rates specified. At the same time, in respect of every payment for admission to the entertainment, other than entertainment by V. C. R. , a proprietor of such entertainment is required to pay to the State Government duty at the rate of 50. per centum thereon. The argument is that both these types of exhibition being cinema and the incident of tax being entertainment, the two different modes of taxation are discriminatory. The exhibition of films through V. C. R. being in no way different than exhibition of cinema in a big hall through a projector, the classification for the purpose of taxation, besides being discriminatory, is also unreasonable. This argument does not appeal to us at all. In the statement of objects and reasons for imposition of duty on exhibition of films through V. C. R. on television set, it is stated that the existing provision of the M. P Entertainments Duty and Advertisements Tax Act, 1936, does not provide a suitable mode for collection of duty on exhibition of films through V. C. R. on television screen. Experiencing difficulty in collection of duty for every admission to the show, the Act provides a more convenient mode of collection of duty by imposition of duty per show. To us, this appears quite reasonable. The attack to the validity of this Amendment Act, based on Article 14 of the Constitution was rejected by this Court in Central Circuit Cine Association's case (supra ). In that case also, the argument was that the two exhibitions being equal, are entitled to equal treatment. While rejecting such argument, the Court observed that there is a radical difference between the two types of exhibitions. A reference to Rule 14 of the Rules would show that the licence fee prescribed is in proportion to the number of seats provided in the hall where the exhibition takes place. Where the seats do not exceed 50, the licence fee prescribed is Rs. 100/ -. But where the seats exceed 50, but do not exceed 200, the licence fee fixed is Rs. 200/ -. Interpreting this rule, the Court held that the maximum fee charged is Rs. 200/- and that the seating capacity is also not to exceed 200. From the terms of that rule, the Court inferred that not more than 200 seats can be provided in such a cinema. From this it is clear that the sitting capacity of such cinema, where film is exhibited through V. C. R. on television screen, cannot be permitted to exceed 200. The Court observed that in big cinema halls, capable of accommodating large number of viewers, usually the sitting arrangement is by dividing the entire seats in different categories, such as second class, first class, special class, balcony, box, etc. and admission fee varies from class to class, depending upon the distance from the screen and the available comforts. Necessarily, therefore, the entertainment duty has to differ being proportionate to the fee charged. Exhibition of films on television set through V. C. R. is in a comparatively small room, usually with one entrance, providing for 50 to 100 seats and in no case exceeding 200. The sitting arrangement is not classwise. Every viewer has to pay the same admission fee. Thus a fixed amount per show would be very just and convenient mode of payment of entertainment duty. Referring to the table annexed to Section 3, as amended by the Amendment Act, the Court held that due care has been taken to prescribe different rates of duty, depending upon the population of the town concerned and the availability of cinemas in those towns. It was consequently held that difference in the levy of such entertainment duty in the two cases is on a sound footing. The mode of recovery of duty per show was held to be quite convenient and just. Section 3-B of the M. P. Entertainments Duty and Advertisements Tax Act, 1936, as introduced by the Amendment Act of 1983, was held to be valid. Learned counsel for the petitioner could not point out any fault in the reasoning adopted by this Court in Central Circuit Cine Association's case (supra ). We affirm that view and hold the provision valid.