2019 (3) TMI 1739 - HC - VAT and Sales Tax

Reimbursement of entertainment tax - Goa Entertainment Tax based Subsidy for Cinema Houses (Theatres) Scheme, 2004 - doctrine of contemporanea expositio - whether the multiplex theatres operated by the Respondents are covered under the said Scheme or not? HELD THAT - The existing cinema halls/theatres, on account of their ticket rates and other factors were unable to make significant investment at upgradation. Such upgradation was necessary on account of IFFI. Therefore, the Government, by formulating the said Scheme offered incentives and concessions to such old cinema halls/theatres which were in a bad shape. The position of brand new multiplexes set up or operated by the Respondents was entirely different. They not only had upgraded infrastructure and facilities, but further, they were charging proportionately higher fees to their consumers. The said Scheme was obviously not formulated to extend any assistance to such brand new multiplexes. The position of ILL, is quite peculiar. The multiplex theatre was being operated by them under a leave and licence agreement dated 17th November, 2006 with the Entertainment Society of Goa, which Mr. Faldessai says was an agency and instrumentality of the State Government. This multiplex theatre was constructed by this agency on Government land. To extend benefit of the said Scheme to ILL, would amount to award of bonanza in favour of ILL and unjustly enrich the ILL at the cost of public exchequer. The Respondents have not made out any case that all these theatres were brand new theatres or multiplexes already having upgraded facilities. In fact, there does not appear to be any serious dispute that all these theatres were old theatres which were in bad shape and which required upgradation on account of IFFI. It is precisely these theatres which were intended to be covered under the said Scheme. Therefore, there is no really case of discrimination as such made out by the Respondents. The principle of equality has to be adopted amongst equals. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Applicability of the Goa Entertainment Tax based Subsidy for Cinema Houses (Theatres) Scheme, 2004 (the Scheme) to new multiplexes.
2. Interpretation of the Scheme's clauses, particularly clauses 2, 3, and 4.
3. Allegations of unjust enrichment and discrimination.
4. The effect of clause 11 of the Scheme regarding inherent rights.
5. The doctrine of promissory estoppel and contemporanea expositio.

Detailed Analysis:

1. Applicability of the Scheme to New Multiplexes:
The primary issue was whether the multiplex theatres operated by the Respondents were covered under the Scheme. The Scheme was designed to incentivize existing theatres in bad shape to upgrade their facilities in preparation for the International Film Festival of India (IFFI). The Appellants argued that the Scheme was not intended for new multiplexes already equipped with upgraded facilities. The court agreed, noting that the Scheme aimed to support old theatres needing upgradation, not to provide a bonanza to new, well-equipped multiplexes.

2. Interpretation of the Scheme's Clauses:
The court emphasized the need to read and construe the Scheme in its entirety, harmonizing clauses 2, 3, and 4. Clause 2 outlined the Scheme's background and purpose, stating it was designed to support the struggling entertainment industry and upgrade public theatres for IFFI. Clause 3 detailed the objectives, focusing on financial support for existing theatres. Clause 4, styled as "Eligibility," was interpreted in the context of the entire Scheme, indicating that merely being covered under the Goa Entertainment Tax Act, 1964, did not automatically entitle a theatre to the subsidy.

3. Allegations of Unjust Enrichment and Discrimination:
The Appellants contended that awarding the subsidy to the Respondents would result in unjust enrichment, as their multiplexes were already upgraded and charging higher fees. The court agreed, noting that the Scheme was not intended to benefit new multiplexes. The Respondents' claim of discrimination was also dismissed, as the theatres they compared themselves to were old theatres in bad shape, which were the intended beneficiaries of the Scheme.

4. Effect of Clause 11 - No Inherent Rights:
Clause 11 of the Scheme stated that no inherent right would arise in favor of any person. The court noted that while promissory estoppel could potentially enforce the Scheme, the Respondents neither pleaded nor justified its invocation. Thus, the Respondents had no inherent right to claim the subsidy under the Scheme.

5. Doctrine of Promissory Estoppel and Contemporanea Expositio:
The Respondents argued for the application of the doctrine of contemporanea expositio, citing endorsements by the Chief Minister indicating the Scheme's applicability to new multiplexes. The court held that such notings could not override the clear objectives and purpose of the Scheme. The court emphasized that the Scheme's interpretation must align with its intended purpose of supporting existing theatres needing upgradation, not new multiplexes.

Conclusion:
The court allowed the appeals, set aside the impugned judgments and decrees, and dismissed the civil suits. The Respondents were directed to return the withdrawn decretal amount with interest, failing which the Appellants could invoke the bank guarantees. The court reiterated that the Scheme was intended to support old theatres in bad shape, not to provide benefits to new, well-equipped multiplexes, thereby preventing unjust enrichment and ensuring the Scheme's objectives were met.

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