ALOK CHITRA MANDIR Vs. DY. COMMISSIONER

JUDGEMENT

(1.) PETITIONER , a proprietorship concern, owns a Cinema House situated at Churu, which is exhibiting feature films. In the year 1982, State Government in exercise of powers under Sec. 6(3)(a) of the Entertainment Tax Act 1957 (for short, 'Act') floated a scheme for composition of entertainment tax on 08.07.1982. The petitioner vide its letter dt. 28.12.1994 opted for the composition scheme w.e.f. 01.01.1995 but later on made endeavour to alter the date of composition as 01.02.1995. Acknowledging the same, the first respondent solicited requisite information from Commercial Taxes Officer, Circle Churu by its letter dt. 28.01.1995. Be that as it may, when the requisite order of the first respondent in this behalf under the composition scheme was awaited, the petitioner started paying tax on adhoc basis as per the composition scheme w.e.f. 01.02.1995. Thereafter, on 09.03.1995, the petitioner sent a reminder to first respondent for passing requisite orders under the composition scheme. In the interregnum, an amendment was made in the composition scheme vide Notification No. F -10(31)FD/GR. IV/87 dt. 23.02.1995 and the gist of which was circulated by the Commissioner, Commercial Taxes vide its letter dt. 14.03.1995. As no specific order for composition scheme was made uptill issuance of the amendment Notification dt. 23.02.1995, the petitioner harboured the impression that composition scheme as amended by Notification dt. 23.02.1995 would govern his case. However, to petitioner's dismay the first respondent passed an order subject to approval of the Commissioner, Commercial Taxes on 05.04.1995 ordering composition for the period 01.02.1995 to 31.01.1996 at a sum of Rs. 29,830 in accordance with the old unamended scheme and not in accordance with the Notification dt. 23.02.1995. In adherence of the order, the requisite amount was paid by the petitioner and subsequent thereto also in terms of the orders passed by the first respondent requisite amount was remitted by the petitioner. The petitioner submitted an application on 09.01.1997 seeking rectification under Rule 32 of the Rajasthan Entertainment & Advertisement Tax Rules 1957 (for short, 'Rules of 1957'). Rule 32 of the Rules of 1957 envisages a provision for rectification of mistakes. For the same prayer, petitioner also approached the Commissioner, Commercial Taxes, Jaipur seeking rectification of mistake. Taking cognizance of the application for rectification of mistake submitted by the petitioner, the Addl. Commissioner, Commercial Taxes issued a notice to the petitioner on 07.02.1997 for personal hearing with records. The petitioner attended the hearing and made his submissions. After conclusion of the hearing, nothing was heard by the petitioner thereafter, nor any order was passed in this behalf and according to petitioner the application for rectification of mistake remained pending and inconclusive. The petitioner has very specifically stated in the writ petition that although no order was passed on his application for rectification of mistake, but the clerical staff of the first respondent orally informed that the application has been rejected. The petitioner has specifically averred in the writ petition that respondents are bound to give effect to amendment Notification dt. 23.02.1995 and thus are under an obligation to recalculate the monthly amount of composition in accordance with the same which would give rise to substantial refund/credit in favour of the petitioner. In the petition, figure of difference of amount was also incorporated with a prayer for refund of the same with interest thereon as per Section 9A of the Act. Setting out a specific case in the petition that instead of refunding the amount and paying interest on the difference of amount, the CTO has imposed interest on the petitioner by its order dt. 11.09.1996 and has denied the similar relief to the petitioner on refund in accordance with the judgment of the Rajasthan Taxation Tribunal, Bench at Jodhpur dt 22.12.1998 by citing the reason that there is no provision under the Act for giving interest on the refund due under the Act. The petitioner has also placed on record the copy of the judgment of the Tribunal and submitted that petitioner became entitled for refund in a different context. In the writ petition, the petitioner has also made endeavour to challenge the validity of Section 9A of the Act by urging that State cannot be allowed to take interest and deny the same on the refund due to the assessee. Once again reiterating that the copy was not endorsed to the petitioner while rejecting the application for rectification of mistake, the petitioner has pleaded that its entitlement to consequential relief in the composition amount fixed in terms of Notification dt. 23.02.1995 wherein tax payable compounded for the first year money amount of composition was envisaged 25% but subsequently by amendment Notification it was altered as 10% over the average collection of past three years. With this submission, the petitioner has prayed for modification of orders Annex. 8 & 18 and for quashing order dt. 11.09.1996 (Annex. 13) and order dt. 22.12.1998 (Annex. 14) respectively. At the threshold, the petitioner approached the Rajasthan Taxation Tribunal by laying Original Application but after repealing of the Rajasthan Taxation Tribunal Act 1995, the file was transferred to this Court. The matter came up before the Division Bench as vires of Section 9A was under challenge. Ultimately, the vires of Section 9A was upheld by the Division Bench of this Court by its order dt. 10.03.2003 and therefore Division Bench ordered for listing this matter before the learned Single Judge for adjudication on the surviving issues on merits.

(2.) THE writ petition was contested by the respondents and reply to the same was submitted. In the return, the respondents have submitted that the order of composition of entertainment tax from 01.02.1995 to 31.01.1996 was passed by the Deputy Commissioner (Admn.) Commercial Taxes Department, Bikaner on 05.04.1995 wherein the order of composition was made w.e.f. 01.02.1995 and therefore the petitioner has been rightly assessed at the rate prescribed under the old Scheme of 1982. With this submission, the respondents have defended the orders Annex. 13 and Annex. 7 respectively and urged that both these orders are in consonance with the provisions of the Act and the composition scheme itself. While referring to application under Rule 32 of the Rules of 1957 submitted by the petitioner for rectification of mistake, the respondents have categorically averred in the reply that for deciding such an application it was not necessary to afford any opportunity of hearing to the petitioner. It is further submitted that despite the settled position, notices were issued and the petitioner was called upon and an authorized representative of the petitioner also appeared before the competent authority clearly goes to show that requisite opportunity was afforded to the petitioner. The respondents have also stated in the reply that after hearing the authorized representative of the petitioner, a detailed report was provided by the Deputy Commissioner (Administration) Bikaner dt. 22.08.1997 wherein it was clarified that the order of composition do not suffer from any defect. Once again reiterating that the order of composition dt. 05.04.1995 was passed for the period anterior to the amendment Notification i.e. From 01.02.1995 subject to approval of the Commissioner, Commercial Taxes, there was absolutely no infirmity in the assessment of the petitioner under the old composition scheme. As regards the rejection of the application of petitioner for rectification of mistake, it is averred in the reply that as the composition order was just and proper, the said application was rightly turned down without affording opportunity of hearing to the petitioner.

(3.) HIGHLIGHTING the basic principles of natural justice, the petitioner has averred with full emphasis in the rejoinder that, while passing the order of rejection of the application for rectification of mistake, the principles of natural justice were flagrantly violated by the respondents.