2015 (5) TMI 126 - HC - Indian Laws

Assessment/reassessment of entertainment tax under Section 9(3) of the Gujarat Entertainment Tax Act, 1977 - Compounding of offense - Held that - petitioner has not been served with any notice calling upon the petitioner to show cause as to why the order under Section 9(3) of the Act may not be passed. It appears that the department issued and served the show cause notice upon the petitioner calling upon the petitioner to show cause as to why the prosecution as provided under Section 18 of the Act may not be launched. In view of the above, the impugned order passed by the Mamlatdar and Appellate Authority / Revisional Authority confirming the order passed by the Mamlatdar passed under Section 9(3) of the cannot be sustained and same deserves to be quashed and set aside and the matter is to be remanded to the Mamlatdar - Decided in favour of appellant.

Summary

Issues:
Challenging the impugned order passed by the Mamlatdar on assessment/reassessment of entertainment tax under Section 9(3) of the Gujarat Entertainment Tax Act, 1977.

Analysis:
The petitioner requested to compound the offense instead of facing prosecution under Section 18 by paying double the tax amount. The petitioner had already deposited the required amount with the Mamlatdar. The petitioner agreed not to claim any refund if the matter is remanded for reassessment/assessment. The petitioner contended that the order passed by the Mamlatdar was without providing an opportunity as no show cause notice was issued, breaching natural justice principles and Section 9 of the Act.

Analysis Continued:
The respondent argued in support of the Mamlatdar's order, stating that the number of seats in the theater exceeded the prescribed limit based on video evidence. The respondent acknowledged the absence of a show cause notice before passing the order under Section 9(3) of the Act. The court noted that the petitioner was not served with a notice to show cause for the order under Section 9(3) but only for launching prosecution under Section 18.

Analysis Continued:
After hearing both parties, the court found that the impugned order passed by the Mamlatdar and confirmed by the Appellate/Revisional Authority could not be sustained as the petitioner was not given a proper opportunity. The court quashed the orders and remanded the matter to the Mamlatdar for a fresh decision after treating the previous order as a show cause notice. The petitioner was given two weeks to respond, and the Mamlatdar was directed to pass a new order after considering the reply.

Analysis Continued:
The court ruled in favor of the petitioner in part, quashing the previous orders and remanding the matter for a fresh decision by the Mamlatdar. The petitioner was required to respond to the treated show cause notice within two weeks. The court clarified that the prosecution matter ended as the petitioner was allowed to compound the offense by depositing the required amount. The rule was made absolute to this extent, and direct service was permitted.