1990 (8) TMI 379 - HC - VAT and Sales Tax

Issues Involved:

1. Mode of computation of the benefit conferred on exhibitors under Section 19A of the Andhra Pradesh Entertainments Tax Act, 1939.
2. Validity and authority of the Commissioner's circular dated January 30, 1989.
3. Interpretation of G.O. Ms. No. 349 dated May 12, 1988, regarding tax concessions for second run and repeatedly run Telugu pictures.
4. Method of calculating weekly tax under Section 5(1) of the Act.
5. Reassessment of previously made assessments based on the new computation method.

Detailed Analysis:

1. Mode of Computation of Benefit:
The central issue revolves around the correct method of computing the tax concession granted to exhibitors under various government orders issued under Section 19A of the Andhra Pradesh Entertainments Tax Act, 1939. The petitioners, who are theatre proprietors, were granted tax concessions for screening second run and repeatedly run Telugu feature films. The contention was about the proper method to calculate this concession, as different officers employed varying methods, leading to inconsistencies.

2. Validity and Authority of the Commissioner's Circular:
The petitioners challenged the authority of the Commissioner of Commercial Taxes to issue the circular dated January 30, 1989, which prescribed a particular method of computation that was favorable to the Revenue. The petitioners argued that the Commissioner did not have the authority to issue such a circular. However, this contention was not pursued further during the proceedings.

3. Interpretation of G.O. Ms. No. 349:
The government order G.O. Ms. No. 349, dated May 12, 1988, provided a 30% tax concession for films with censor certificates aged between five and ten years and a 50% concession for films older than ten years. The petitioners argued that the concession should apply to the "actual number" of second run shows, whereas the Commissioner's circular limited the concession to a certain number of shows, which led to disputes.

4. Method of Calculating Weekly Tax:
The court clarified that the multiplier mentioned in Section 5(1) of the Act (e.g., 22 for municipal corporations) is not a reference to the number of shows but a notional multiplier for calculating the weekly tax. The tax payable is a weekly tax covering all shows within the week. The court proposed a proportional method of computation where the tax is calculated based on the proportion of normal and concessional shows to the total number of shows actually exhibited during the week. For example, if 16 out of 28 shows are normal and 12 are concessional, the tax is calculated proportionately for both categories.

5. Reassessment of Previously Made Assessments:
The court did not delve into the issue of reassessment of already made assessments. It left the matter open for the petitioners to pursue remedies under the Act if they were aggrieved by any further action taken by the respondents. The court emphasized that both parties must adhere to the method of computation specified in the judgment.

Conclusion:
The court concluded that the Commissioner's circular prescribing a different method of computation was incorrect. The proper method involves calculating the weekly tax proportionately based on the actual number of normal and concessional shows. The writ petitions were partly allowed to the extent of invalidating the impugned circular and prescribing the correct method of computation. There was no order as to costs, and the advocate's fee was set at Rs. 250 for each petition.

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