2011 (4) TMI 1031 - HC - Indian Laws

writ - consolidated tax - refund the excess recovery - petitioner-cinema had availed of benefit of Janta Cinema under notification dated December 11, 1979 for the first year from August 22, 1986 to August 21, 1987 - on completion of one year the petitioner opted for payment of entertainment tax as provided under section 6(2) of the Act vide application dated August 22, 1987, which was scrutinized and vide order dated August 31, 1987 the competent authority under the entertainment tax allowed the said application and quantified the consolidated tax payable by the petitioner under section 6(2) of the Act - petition is allowed - respondents are directed to charge consolidated tax as per orders passed under section 6 of the Act - respondents are further directed to refund the excess amount recovered from the petitioners, after undertaking the exercise of calculation

Issues Involved:
1. Legality of the impugned order dated November 18, 1991.
2. Entitlement to dual benefits under sections 6 and 29 of the Gujarat Entertainments Tax Act, 1977.
3. Retrospective differential demand and reassessment without hearing.
4. Refund of excess recovery made by the respondent.

Detailed Analysis:

1. Legality of the Impugned Order Dated November 18, 1991:
The petitioners challenged the impugned order on the grounds that it was passed without affording an opportunity of hearing, amounting to reassessment. The court found that the order was mechanically passed based on general instructions without considering the specific circumstances of the petitioners' case. The court emphasized that the order under section 6(2) of the Act was neither revoked nor canceled, making the impugned order legally unsustainable.

2. Entitlement to Dual Benefits Under Sections 6 and 29 of the Gujarat Entertainments Tax Act, 1977:
The court examined whether the petitioners were entitled to avail benefits under both sections 6 and 29 of the Act simultaneously. It was established that the petitioners had availed of the exemption under section 29 for the first year and then opted for the consolidated tax under section 6. The court clarified that sections 6 and 29 provide two separate modes of tax payment, and the Act does not prohibit an assessee from selecting either option, provided both benefits are not availed simultaneously. The court found that the petitioners had not availed of dual benefits and had validly opted for consolidated tax under section 6 after the first year.

3. Retrospective Differential Demand and Reassessment Without Hearing:
The court addressed the issue of retrospective differential demand raised on the belief that the petitioners availed of dual benefits. The court found that the respondent-authorities had wrongly presumed the cancellation of the order under section 6 based on administrative instructions without proper application of mind and without giving the petitioners an opportunity to be heard. The court held that such actions amounted to reassessment, which was not justified without following due process.

4. Refund of Excess Recovery Made by the Respondent:
The petitioners sought a refund of the excess amount recovered over and above the consolidated tax. The court directed the respondents to charge consolidated tax as per the orders under section 6 and to refund the excess amount recovered. The court ordered the respondents to undertake the calculation of the excess amount and complete the refund process within one month from the receipt of the court's order.

Conclusion:
The court allowed the petition, quashing the impugned order dated November 18, 1991. It directed the respondents to charge consolidated tax as per section 6 orders and refund the excess amount recovered from the petitioners. The court emphasized that the benefits under sections 6 and 29 are distinct and cannot be availed simultaneously, but the petitioners had not done so. The court found the impugned order to be mechanically passed without proper consideration and due process, warranting its quashing and the refund of the excess amount.

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