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2010 (12) TMI 1086 - HC - VAT and Sales Tax
Issues:
1. Imposition of penalty and damages under the U.P. Entertainments and Betting Tax Act, 1979 for not holding any show in a cinema hall where a film was being shot. Detailed Analysis: The petitioner, a licensee under the U.P. Cinema Regulation Act, 1955, allowed a Bhojpuri film producer to shoot a film in his cinema hall, informing the District Magistrate about the same. Despite no response from the District Magistrate, the film was shot, and no shows were held on the specified date. Subsequently, the District Magistrate issued notices for recovery of entertainment tax and imposed damages and penalty. The petitioner challenged this in a writ petition. The petitioner argued that the shooting was permitted based on a policy decision and a letter from the Director of the film, which requested facilities for shooting films in U.P. The petitioner contended that the District Magistrate should not penalize for loss of entertainment tax as it was done at the State Government's request. However, the court opined that the writ petition should be allowed not based on these submissions but due to lack of jurisdiction to impose damages or penalties. The court examined Section 12 of the U.P. Entertainments and Betting Tax Act, 1979, which allows for assessment of tax and imposition of penalties if certain conditions are met, such as failure to provide information or evasion of tax. However, the court noted that this section applies only if an entertainment event was held and tax was being concealed. Since no shows were held on the specified date, the court concluded that no assessment or penalty could be imposed on the petitioner. The court further emphasized that penalties under Section 12 can only be imposed if an assessment is made, and in this case, since no entertainment event took place, no assessment could be conducted. The court also highlighted that there was no provision in the Act for imposing damages for loss of entertainment tax. Consequently, the court deemed the order imposing damages and penalty as illegal and quashed it, allowing the writ petition in favor of the petitioner.
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