AMRAPALI FILMSLTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) This writ application relates to an order under the Bihar Entertainments Tax Act, 1948, hereinafter to be referred to as "the Act" it seeks to quash an order dated 3.12.80, (Annexure 6) and annexure 'A' by which the respondent Commissioner of Commercial Taxes cancelled the composition of entertainment tax with respect to the Cinema Hall known as 'Mona' under Sec. 3(5) of the Act and directed pasting of adhesive stamp on all tickets on and from the 6th of December, 1980 (Annexure 7). The order cancelling the compounding arrangement was made effective from 17 -7 -1980.

(2.) One of the questions involved in this writ petition for the payment is what could be the duration of composition arrangement for the payment of tax under Sec. 3(5) (b) of the Act in view of Rule 18(4) of the Bihar Entertainments Tax Rules, 1949, hereinafter referred to as "the Rules".

(3.) On 27 -11 -79 an application through the Assistant Commissioner, Commercial Taxes, Patna, East, in the prescribed manner for compounding of its tax liability under the Act for the period up to 31 -3 -81 was made by the petitioner. The application was recommended by the Assistant Commissioner on 5 -12 -79 suggesting to compound the tax liability at a fixed rate of Rs. 14,00,000/ - per year as it is a new cinema house. The Joint Commissioner in his turn forwarded the said recommendation stating therein that in view of the guidelines of the Government, which are applicable only to old cinemas, composition cannot be done in the instant case but if the Government so desires the tax liability can be compounded at Rs. 3.75 lacs per month. On 24 -1 -80 Commissioner, Commercial Taxes, submitted the matter to the Minister of Finance through the State Minister. In view of the cinema house being new, he proposed certain basis for composition and suggested that the Government can compound the tax liability of the petitioner at the rate of fifty percent of the tax payable on full seating capacity of four shows from the date of commencement of the show till 31 -3 -81. This was approved by the State Minister of Finance on 30 -1 -1980 and then by the Minister of Finance on 10 -2 -1980. On 18 -2 -1980 (Annexure 9) the Deputy Commissioner wrote to the Joint Commissioner (Administration) that the State Government had directed to arrive at a compounding agreement from 15 -2 -1980 to 31 -3 -1981 on the condition that the tax liability be compounded at the rate of fifty percent of the tax payable on full capacity of four shows. If there were more shows than four it would be calculated on the basis of twenty -five percent of the capacity. The cinema proprietor shall not be entitled to increase the number of seat during the period of composition and if he does so he must notify the same to the department and consequent increase of the tax liability would be made. The tax must be paid regularly and in advance . In case of violation of the terms aforesaid the composition arrangement will be revoked. In the meantime on 17 -2 -80 the Assembly was dissolved and the President's rule was proclaimed in the State and directions were issued that before implementing the order of the previous Government, the matters may again be referred to Government for the approval. Accordingly the composition arrangement, which was directed by the State Government, was referred to the Finance Commissioner for reconsideration. The Finance Commissioner by his order dated 5 -3 -80 after having reconsidered the matter approved its implementation without any modification.