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Issues:
Challenge to notifications imposing show tax, Compliance with mandatory provisions of Punjab Municipal Act, Viability of notifications and bye-laws, Assessment of tax liability, Machinery for adjudication of disputes. Analysis: The judgment addressed the challenge raised by a cinema firm against notifications imposing show tax, specifically focusing on compliance with the mandatory provisions of the Punjab Municipal Act. The petitioner contested that the notifications did not define the class of persons liable for tax payment or specify the assessment system, violating the Act's provisions. The respondents argued that the person operating the cinema is responsible for paying the show tax per cinema show, clarifying the assessment method. The court referred to a previous judgment by I. S. Tiwana J., emphasizing the necessity of adhering to the law's mandate in tax collection. Regarding the vires of the notifications and bye-laws, the petitioner highlighted the absence of provisions designating an assessing authority or machinery for resolving disputes between the assessee and the municipal committee. The court examined the bye-laws provided in the notifications, noting the lack of clarity on assessment authority and dispute resolution mechanisms. It referenced a Division Bench decision emphasizing the importance of clearly defining the assessing authority and establishing a dispute resolution process, which the bye-laws failed to address adequately. Consequently, the court ruled in favor of the petitioner, quashing the notifications and directing the refund of show tax paid by the petitioner. The judgment also required the petitioner to deposit the entertainment tax collected within a specified period for fair distribution to entitled parties. Notably, the court emphasized the necessity of complying with statutory requirements in tax imposition and collection, ensuring clarity on assessment procedures and dispute resolution mechanisms. The judgment underscored the significance of providing a legal framework that defines tax liability, assessment methods, and mechanisms for resolving disputes in accordance with the law.
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