SHYAM TALKIES BUNIYADGANJ Vs. STATE OF BIHAR

JUDGEMENT

(1.) IN this writ appliction, the petitioner, M/s Shyam Talkies, Buniyadganj, Gaya, through its sole proprietor, Brijnandan Singh, has challenged the correctness and validity of the order, dated 27.5.1989, whereby the respondent District Magistrate, Gaya, has refused to renew the cinemas licence of the petitioner on the ground that the sales tax to the tune of Rs. 15,05,192/ - is still due against the petitioner and has further directed the petitioner not to exhibit the cinema show. A copy of the said order is made Annexure -15 to this writ application. Shortly stated, the case of the petitioner is that the petitioner, which is a proprietory firm, applied for grant of the cinema hall registered on 14.6.81 under the Bihar Entertainment Tax Rules, 1967. After having satisfied the requirements in terms of the provisions of the Bihar Cinemas (Regulation) Act, 1954 and the Rules made thereunder, a temporary cinema licence was issued from time to time and ultimately, the permanent licence was granted to the petitioner, after having fully satisfied the requirements as envisaged under the provisions of the Act, and the rules framed thereunder. There was some confusion regarding the sitting capacity of the petitioner cinema hall, which was subsequently resolved. Initially, the permanent licence was granted vide letter, dated 11.10.85 wherein the sitting capacity was mentioned as 905. On subsequent, verification report, it was found that the sitting capacity was only 725 and, accordingly, the petitioner has applied for the amendment in the certificate regarding the sitting capacity from 905 to 725 on the basis of the report submitted by the Chief Town Planner. Accordingly, the permanent licence granted to the petitionar was amended and the sitting capacity was amended from 905 to 725. The prayer for amendment was made in terms of section 7 of the Act. As stated above, after the cinema hall having been inspected by the Chief Town Planner, the amendment was allowed, accordingly, the sitting capacity was reduced to 725, as stated above.

(2.) IN this case, a counter -affidavit has been filed on behalf of the respondent District Magistrate wherein, inter alia, it is stated that in order to evade the payment of tax, the petitioner has filed a petition for reducing the sitting capacity. It is alleged that since the permanent licence was granted on the basis of the sitting .capacity of 905, the petitioner cannot take resort to the provisions of section 7 of the Act for reducing the sitting capacity. On the basis of the sitting capacity originally mentioned in the licence, the tax amount seems to have been assessed by the respondent authority, which is under challenge in this writ application. Although from the order, it does not appear as to what is the basis for issuing the demand of Rs. 15 lacs and odd, yet it appears from the stand taken in the counter -affidavit that the amount so assessed is on the basis of the original sitting capacity mentioned in the licence issued to the petitioner. As stated above, on the report of the Chief Town planner, who inspected the cinema hall and submitted a report, the respondent State Government itself accepted the prayer of the petitioner for reducing the sitting capacity from 905 to 725, as it appears from the order, dated 27.6.89 as contained in Annexure -23. In 'that view of the matter, the plea taken by the respondents in the counter -affidavit cannot be accepted.

(3.) LEARNED counsel for the petitioner has submitted that pursuant to the provisions of the aforesaid rule, the State Government has issued direction to all the District authorities not to close the cinema halls in the State of Bihar on account of non -payment of the entertainments tax. A copy of the order is made Annexure -16 to this writ application. The respondent authority without following the procedure, prescribed by the State Government in terms of rule 16 of the Rules has issued the impugned notice, which, in my view, is wholly arbitray, illegal and without jurisdiction. Accordingly, the demand notice, dated 26.5.1989, a copy of which is An -nexure -15 to this writ application is hereby quashed and this writ application is, accordingly, allowed. However, it is made clear that if the respondent authority so desires, may proceed in accordance with the provision of the Act and the Rules framed thereunder as well as after following the direction issued by the State Government under rule 16 of the Rules quoted above. However, the petitioner will be at liberty to file an application for renewal of the licence if not already renewed in accordance with law and the respondent authority will consider the prayer of the petitioner in accordance with law.