PALACE THEATRE Vs. STATE OF HARYANA

JUDGEMENT

(1.) Petitioner is a Private Limited Company and runs a Cinema under the name and style of M/s. Palace Theatre Rohtak. Checking of the Cinema of the petitioner took place on March 20, 1978 at 7.30 p.m. and during the course of the said checking the officer incharge detected that number of fixed counter foils did not tally with the number of counter foils shown in the list and on further enquiry and checking, it was revealed that the management was indulging in evasion of entertainment duty by employing the method of either not affixing the same on the tickets or to cut one entertainment duty stamp into many pieces and use such pieces in place of complete duty stamp. In yet another checking by Smt. Vidya Sangwan, Excise and Taxation Officer, Rohtak on March 24, 1978 same irregularity and evasion of entertainment duty was detected. The petitioner received a notice in order to arrive at correct figure of amount evaded by it and after hearing, the Excise and Taxation Officer-cum-Entertainment Officer, Rohtak passed the order by holding that the petitioner had evaded entertainment duty to the tune of Rs. 4,055/-. An additional demand of this amount was created and the petitioner was directed to pay the same within a month. After the amount that was evaded towards entertainment duty was fixed and paid by the management of the petitioner yet another notice was received by it to show cause to as to why penalty be not imposed upon it because of evasion of entertainment duty so found by the Excise & Taxation Officer vide his order dated March 26, 1979. No one appeared in consequence of the notice aforesaid and by order dated June 5, 1980 Excise & Taxation Officer imposed a penalty of Rs. 30,000/- under Section 15 of the Act for evision of entertainment duty of Rs. 4,055/-. Being aggrieved, the petitioner carried an appeal against the order dated June 5, 1980 which came up for adjudication before the Joint Excise and Taxation Commissioner who vide his order dated March 23, 1981 by upholding the grounds for imposing penalty only modified the order by reducing the quantum of penalty from Rs. 30,000/- to Rs. 20,000/-. Still aggrieved, a revision was filed by the petitioner before the Excise and Taxation Commissioner but the same did not find favour with him and was as such rejected. However, while rejecting the revision under the provisions of Section 12 of the Punjab Entertainment Duty Act, 1955 (hereinafter to be referred as the Act of 1955) the authority concerned suo motu issued notice to show cause as to why the penalty reduced from Rs. 30,000/- to Rs. 20,000/- by the Joint Excise & Taxation Commissioner be not increased to the one originally passed by the Excise & Taxation Officer Rohtak. The petitioner appeared in consequence of the suo motu notice aforesaid and raised various pleas but vide impugned order Rs. 30,000/-. The petitioner challenges the orders of either originally imposing the penalty or even the one vide which it was reduced from Rs. 30,000/- to 20,000/- as also the one vide which the same was again restored to the original penalty of Rs. 30,000/-.

(2.) Mr. J.K. Sibal, Sr. Advocate appearing on behalf of the petitioner mainly contends that the authorities while imposing penalty have held first provision to Section 15 of the Act of 1955 applicable to the facts of the present case whereas the case was squarely covered under Section 15 (a or c) of the Act of 1955. In the first instance the contention of learned counsel is that it is only sub-clause (a) of Section 15 which is applicable and not first proviso to Section 15 of the Act of 1955 and in any case even if the facts of the present case are covered both under clause (a) of Section 15 as also the first proviso, the matter that might relate to taxes, forfeiture, penalty and alike shall have to be very strictly construed and if the facts constituting imposition of penalty fall under the two sections, the one which is more stringent shall have to be avoided. It may be mentioned here that if the case is covered under clause (a) of Section 15 of the Act of 1955, admittedly the penalty cannot exceed Rs. 2,000/- whereas if the facts constituting evasion of tax fall within first proviso to Section 15, the penalty can be to the extent of 25 times to duty found to have been evaded. In order to appreciate the controversy between the parties as also the contentions of learned counsel, it shall be useful to reproduce Section 15 which runs as follows :-

(3.) A perusal of section quoted above would manifest that it is fraudulent evasion of duty that is covered under sub-clause (a) of Section 15 whereas the first proviso to Section 15 covers the case of free, surreptitious, unauthorised or concessional entry whether with or without the knowledge of the proprietor.