JABALPUR Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE petitioners have, by this petition under Article 226 of the Constitution, challenged the levy of entertainment duty, and the recovery proceedings initiated by the District Excise Authorities, Jabalpur, for two performances named as "Mahinder Kapoor Nite" organised by petitioner No. 2 on behalf of petitioner No. 1 Company, on the 7th and 8th July, 1974.

(2.) THE petitioner No. 1 is a limited Company registered and incorporated under the Companies Act, 1956, in the name of Home Decorators and Finance Private Limited, Jabalpur. The petitioner No. 2 is the Managing Director of the said Company. The petitioner Company has organised a scheme for groups of members with a view to encourage saving and to give other benefits to the members. A new Group has been formed by the said Company, known as "Nav -Nirman Group". According to the rules and regulations of the said Group, a member is admitted to this Group on payment of Rs. 2/ - as admission fee (not refundable) and Rs. 10/ - as membership sub -scription (refundable after ten years). The scheme provides for distribution of prizes by drawing lucky numbers, periodically.

(3.) THE performances were originally scheduled to be held on 25th and 26th May, 1974 for which publicity was given by the petitioner Company. It is alleged that at that time the respondent No. 2 had informed petitioner No. 2 on telephone that the petitioner Company will have to pay entertainment duty for the performances in question under the Act. The petitioner No. 2 made his submissions to the authorities concerned, that no entertainment duty was payable on the said performances, but he was informed by respondent No. 2, vide memo dated 9 -5 -1974 (Annexure -H) that section 3 of the Act being clear, the assessment of the duty shall be made according to the provisions contained in that section. It is further alleged that on the 7th and 8th July 1974, when the performances were held, the District Excise Authorities attended the shows under the pretext of counting the attendance and by arbitrary and untrue counting, assessed the duty and surcharge to the tune of Rs 36,289.56 paise, out of which Rs. 5000 / - were recovered from the petitioner No. 2 on 8th July 1974 before the commencement of the performance under coerclon and duress. After that, in order to recover the balance valuable movable property of the petitioner Company was unlawfully attached. It is also alleged that the respondents, with a view to harass the petitioners are threatening to launch prosecution and other proceedings for the alleged breach of the Act.