2008 (10) TMI 704 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the impugned notices and orders.
2. Legality of the Circular Exhibit - L.
3. Correct calculation and payment of Entertainment Duty by the petitioner.
4. The nature of the exemption/concession granted under the Bombay Entertainment Duty Act, 1923.
5. Allegations of unjust enrichment against the petitioner.
6. Availability of alternate remedies for the petitioner.

Issue-wise Detailed Analysis:

1. Validity of the Impugned Notices and Orders:
The petitioner sought to set aside the impugned notices and orders, arguing they were issued without considering the exemption available to the petitioner from paying 75% of the Entertainment Duty. The court found that the petitioner was entitled to a 75% exemption for the fourth and fifth years, and the demand for the full 45% duty was incorrect. The impugned notices and orders were quashed.

2. Legality of the Circular Exhibit - L:
The petitioner challenged the Circular Exhibit - L, claiming it was ultra vires the Bombay Entertainment Duty Act, 1983. The court noted that the circular was issued to clarify the method of computing Entertainment Duty but did not have the authority to override the statutory provisions. The court found the circular inconsistent with the Act and set it aside.

3. Correct Calculation and Payment of Entertainment Duty by the Petitioner:
The petitioner argued that the correct method of calculating Entertainment Duty was based on the net price, not the gross price. The court agreed, stating that the petitioner was liable to pay only 25% of the 45% duty during the fourth and fifth years. The court emphasized that the calculation should be based on the net admission fee, and the petitioner had correctly paid the duty as per the provisions of the Act.

4. The Nature of the Exemption/Concession Granted Under the Bombay Entertainment Duty Act, 1923:
The court examined the legislative intent behind the exemption/concession granted to multiplex theatres. It was determined that the exemption was intended to benefit the proprietors/operators of multiplex theatres, not the patrons. The court held that the exemption allowed the petitioner to collect Entertainment Duty from patrons but only pay 25% of the collected duty to the government during the fourth and fifth years.

5. Allegations of Unjust Enrichment Against the Petitioner:
The respondents argued that the petitioner was unjustly enriched by retaining the collected Entertainment Duty. The court rejected this argument, stating that the petitioner was entitled to retain 75% of the collected duty as per the exemption. The court clarified that the petitioner was not liable to pay the full 45% duty and that the exemption was a retention benefit for the multiplex proprietors/operators.

6. Availability of Alternate Remedies for the Petitioner:
The respondents contended that the petitioner had an alternate remedy of appeal under Section 10A of the Bombay Entertainment Duty Act, 1923. The court, however, chose to entertain the writ petition, considering the broader implications and the need to clarify the legal position regarding the exemption and calculation of Entertainment Duty.

Conclusion:
The court concluded that the petitioner was entitled to the exemption from paying 75% of the Entertainment Duty during the fourth and fifth years. The impugned notices and orders demanding the full 45% duty were quashed. The Circular Exhibit - L was found to be inconsistent with the Act and set aside. The court emphasized that the exemption was a retention benefit for the multiplex proprietors/operators, and the petitioner had correctly paid the duty as per the statutory provisions.