1988 (4) TMI 412 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of orders for adjustment of security deposit towards alleged arrears of tax.
2. Interpretation of relevant provisions of the Tamil Nadu Entertainments Tax Act, 1939.

Detailed Analysis:
1. The petitioner, a cinema theatre proprietor, filed a writ petition challenging the orders of the first respondent adjusting a sum from the security deposit towards alleged arrears of tax. The petitioner contended that the theatre did not function for specific weeks due to various reasons, and no tax was paid or demanded for those weeks. Despite this, the first respondent proposed to assess the petitioner for tax for those weeks. The Court noted that the petitioner's objections were overruled, and adjustment from the security deposit was ordered. The petitioner argued that the order was illegal and without jurisdiction. The Court examined the relevant provisions of the Act and found that the petitioner was not liable to pay tax for the weeks in question as there were no admissions for entertainment during those periods. The Court held the demand for tax as illegal and quashed the impugned order, directing the refund of the amount adjusted from the security deposit to the petitioner.

2. The Court analyzed Section 4 and Section 5-B of the Tamil Nadu Entertainments Tax Act, 1939. It noted that the absence of shows during specific weeks meant no admissions occurred, rendering the imposition of tax invalid. The Court emphasized that even if there was an agreement to pay tax under Section 5-B, without admissions, the liability to pay tax did not arise. The Deputy Commercial Tax Officer's certificate confirmed the absence of shows during the relevant weeks. The Court concluded that the petitioner was not obligated to pay any entertainments tax for the weeks in question. The order demanding tax was deemed illegal and was quashed by the Court, with a directive for the refund of the amount paid by the petitioner for those weeks. The Court allowed the writ petition, emphasizing that the tax demanded for weeks without shows must be refunded to the petitioner, with no costs imposed.