1966 (11) TMI 92 - HC - Indian Laws

Summary

Issues Involved:
1. Interpretation of the Bombay Entertainments Duty Act, 1923.
2. Levy of entertainments duty on amounts collected as duty.
3. Role of the proprietor in collecting entertainments duty.
4. Validity of the Government Memorandum dated 11th January 1962.
5. Plea of estoppel against the State's demand for additional duty.
6. Challenge to the vires of Section 3 of the Act.

Detailed Analysis:

1. Interpretation of the Bombay Entertainments Duty Act, 1923:

The primary issue in this case revolves around the interpretation of the Bombay Entertainments Duty Act, 1923. The court examined whether the entertainments duty should be levied only on the amount charged for admission to the cinema or also on the amount collected as entertainments duty. Section 2(b) of the Act defines "payment for admission" inclusively, indicating that it encompasses any payment connected with gaining admission to an entertainment. Section 3, which is the charging section, levies duty on "all payments for admission," suggesting that the duty should be imposed on the total amount received, including the entertainments duty.

2. Levy of Entertainments Duty on Amounts Collected as Duty:

The court held that the entertainments duty is leviable on the total amount received from cinema-goers, including the amount collected as entertainments duty. The term "all payments for admission" under Section 3 is comprehensive and includes the amount collected as entertainments duty. The court reasoned that the amount charged by the proprietor on account of the entertainments duty is a payment for admission within the natural connotation of the term, as it is required for securing admission to the entertainment.

3. Role of the Proprietor in Collecting Entertainments Duty:

The court rejected the petitioners' argument that the proprietor acts merely as an agent of the State in collecting the entertainments duty from the purchaser. The liability to pay the entertainments duty is that of the proprietor, not the purchaser. The proprietor recovers the amount from the purchaser not as an agent of the State but as part of the price for admission. The court emphasized that the liability to pay the duty falls on the proprietor, who may pass on the burden to the purchaser, but this does not change the nature of the payment.

4. Validity of the Government Memorandum Dated 11th January 1962:

The court upheld the validity of the Government Memorandum dated 11th January 1962, which stated that the entertainments duty should be levied on the total amount received, including the amount collected as duty. The court found that this interpretation was correct and justified the demand made by the Mamlatdar for the difference in duty.

5. Plea of Estoppel Against the State's Demand for Additional Duty:

The petitioners argued that the State should not be entitled to recover the difference in entertainments duty because the amount already paid was in accordance with a previous circular issued by the Collector. The court rejected this plea, stating that an estoppel cannot be pleaded against a statute. The court held that the State was entitled to demand the difference in duty based on a correct interpretation of the Act.

6. Challenge to the Vires of Section 3 of the Act:

Some petitioners also challenged the constitutionality (vires) of Section 3 of the Act. However, this contention was not pressed in light of the Supreme Court's decision in Western India Theatres Ltd. v. Cantonment Board Poona, AIR 1959 SC 582, which upheld the validity of similar provisions. Therefore, the court did not address this issue in detail.

Conclusion:

The petitions were dismissed, and the rules were discharged with costs. The court concluded that the entertainments duty is leviable on the total amount received from cinema-goers, including the amount collected as entertainments duty. The proprietor is liable to pay the duty, and the State is entitled to recover the difference in duty as per the correct interpretation of the Act. The plea of estoppel was rejected, and the challenge to the vires of Section 3 was not pressed.