PVR LIMITED Vs. STATE OF TELANGANA

JUDGEMENT

(1.) M/S. PVR Limited, Hyderabad, the petitioner in these cases, assails the assessment orders passed against it by the Entertainment Tax Officer, Somajiguda Circle, Hyderabad, the third respondent in both cases, under the provisions of the Telangana Entertainment Tax Act, 1939 (for brevity, 'the Act of 1939') and the Rules framed thereunder. W.P.No.1008 of 2019 was filed by it against the assessment order dated 16.03.2016 along with the reiteration thereof, vide order dated 20.03.2017, and the notice dated 08.01.2019, while W.P.No.2331 of 2019 pertains to the assessment order dated 20.03.2017 and the reiteration thereof, vide notice dated 08.01.2019.

(2.) The case of the petitioner company is as follows: It is in the business of maintaining and running cinema theatres for exhibition of movies. It is a registered dealer under the Act of 1939 and an assessee on the rolls of the third respondent. While so, the erstwhile Government of Andhra Pradesh notified G.O.Ms.No.604, Revenue (CT.IV) Department, dated 22.04.2008, granting exemption from entertainment tax leviable under Sections 4(1) and 4(1A) of the Act of 1939 in relation to feature films/low budget films produced in the then State of Andhra Pradesh. According to the petitioner company, as and when such movies were exhibited in its theatres, it availed the benefit of G.O.Ms.No.604 dated 22.04.2008. While so, the third respondent issued show-cause notice dated 15.12.2015 calling upon it to explain as to how it had claimed exemption under the aforestated G.O. when it did not comply with the conditions mentioned therein during the tax periods 2011-12 to 2014-15. According to the third respondent, the petitioner company was liable to pay Rs.99,46,735/- in this regard. The petitioner company sought four weeks time on 21.12.2015 so as to obtain documents and submit detailed objections to the show-cause notice. Thereafter, it submitted its reply on 11.01.2016, furnishing year-wise details in respect of the differential amount of Rs.86,30,675/- out of the demanded sum of Rs.99,46,735/-. It also attached the relevant A.P. State Film Development Corporation Tax Certificates in support of this differential tax amount of Rs.86,30,675/-. It sought four weeks more time to arrange for and submit tax certificates in relation to the balance tax differential amount of Rs.13,16,059/-. However, the third respondent issued an assessment order on 16.03.2016 stating that the petitioner company was not entitled to claim exemption under G.O.Ms.No.604 dated 22.04.2008 as it had not furnished details of the low budget films screened by it in its theatres in writing in advance, as required under the said G.O. The petitioner company was called upon to pay the sum of Rs.23,81,928/- towards the evaded entertainment tax amount for the years 2012-13 to 2014-15. Thereafter, the third respondent issued reminder notice dated 30.08.2016 calling upon the petitioner company to file its objections to the show-cause notice dated 15.12.2015, failing which the demand therein would be confirmed. The petitioner company submitted representation dated 01.09.2016 informing the third respondent that it had already submitted tax certificates for the differential tax amount of Rs.86,30,675/- under its letter dated 11.01.2016 and that representations had been made by it to the Commissioner of Commercial Taxes on 31.01.2016 and 04.07.2016 to make necessary corrections in the guidelines stipulated under G.O.Ms.No.604 dated 22.04.2008. The third respondent however passed assessment order dated 20.03.2017 for the tax periods 2012-13 to 2014-15 citing reasons similar to those mentioned in the assessment order dated 16.03.2016 and called upon the petitioner company to pay Rs.75,64,807/- as tax arrears. Nearly two years later, notice dated 08.01.2019 was issued to the petitioner company requiring it to pay Rs.99,46,735/- as per the orders dated 16.03.2016 and 20.03.2017. According to the petitioner company, it had substantially complied with the requirements stipulated in G.O.Ms.No.604 dated 22.04.2008. It pointed out that it was not possible for it to submit certificates from the Andhra Pradesh Film, Television and Theatres Development Corporation (APFTTDC) in advance, as the APFTTDC issued such certificates only after the release of the movie. The petitioner company therefore assailed the action of the third respondent in passing the assessment orders solely on the ground that such certificates were not furnished in advance. According to the petitioner company, the authorities had at all times taken note of the fact that certificates would be issued by APFTTDC only after release of the movies and permitted submission of such certificates not in advance but after the release. According to it, a hyper-technical approach was being adopted by the third respondent and that too, only in its case as it had alone been singled out for denial of exemption though the same was extended and granted to all other similarly situated assessees.

(3.) The third respondent filed a counter stating as follows: The petitioner company responded to the show-cause notice dated 15.12.2015 issued for the tax periods 2011-12 to 2014-15, by filing copies of the certificates in relation to the sum of Rs.86,30,675/- on 11.01.2016 but such certificates were not produced in advance, as required. As the assessment for the year 2011-12 was getting time barred, the assessment order dated 16.03.2016 was passed quantifying the differential tax amount payable by the petitioner company at Rs.23,81,928/-. This order was passed by disallowing the exemption claimed by the petitioner company as it had failed to comply with the condition of producing the certificates in advance. Assessment for the tax periods 2012-13 to 2014-15 was effected under the order dated 20.03.2017 raising a demand for Rs.75,64,807/-. The third respondent pointed out that the assessment orders in question were passed on 16.03.2016 and 20.03.2017 but the petitioner company chose to keep quiet till January, 2019 when it filed the present writ petitions. The writ petitions were therefore hit by delay and laches, as the petitioner company did not offer any explanation for its lassitude. The third respondent further pointed out that remedy of appeal was available to the petitioner company under Section 9(B) of the Act of 1939, but the petitioner company did not choose to avail the same within time. The third respondent asserted that once the assessee failed to comply with the conditions prescribed in the exemption G.O., it would not be entitled to qualify for or claim benefit thereunder. On these grounds, the third respondent sought dismissal of the writ petitions.