1996 (12) TMI 422 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutionality of Section 6-A of the Gujarat Entertainment Tax Act, 1977.
2. Constitutionality of Rules 13(1) and 19(ii) of the Gujarat Cinema (Regulation & Exhibition by Video) Rules, 1984.
3. Levy and collection of entertainment tax on Video Cassette Recorder or Player.
4. Presumption of entertainment provision under Section 6-A.
5. Validity of Rule 13(2) and Rule 19(ii).

Detailed Analysis:

1. Constitutionality of Section 6-A of the Gujarat Entertainment Tax Act, 1977:
The Supreme Court examined the constitutionality of Section 6-A, which provides for the levy and collection of tax on entertainment by Video Cassette Recorder or Player on Television or Video scope. The Court referenced its earlier decision in Venkateshwara Theater v. State of A.P. and Ors., AIR 1993 SC 1947, which upheld the Legislature's power to levy entertainment tax based on gross collections. The Court concluded that the tax on entertainment by video cassette recorder or player is valid and does not violate Article 14 of the Constitution.

2. Constitutionality of Rules 13(1) and 19(ii) of the Gujarat Cinema (Regulation & Exhibition by Video) Rules, 1984:
The respondents challenged Rules 13(1) and 19(ii) as being ultra vires. Rule 13(1) grants the licensing authority absolute discretion to refuse a license if the video cinema is likely to cause obstruction, inconvenience, annoyance, risk, danger, or damage to residents or passersby. Rule 19(ii) allows any police officer to have free access to the video cinema for inspection. The Court upheld the validity of these rules, stating that they are necessary for maintaining public order and safety.

3. Levy and Collection of Entertainment Tax on Video Cassette Recorder or Player:
The Court addressed the respondents' contention that the tax on video recorders or players does not qualify as an entertainment tax since it is not based on admission fees. The Court found no merit in this argument, stating that the entertainment provided by video recorders or players in places of entertainment or omnibuses constitutes entertainment on admission, thereby justifying the tax.

4. Presumption of Entertainment Provision under Section 6-A:
Section 6-A(2) presumes that a proprietor provides at least three entertainments daily in places of entertainment and at least one entertainment daily in omnibuses, unless otherwise informed by the proprietor. The Court held that this presumption is valid as it provides a basis for tax calculation in the absence of specific information from the proprietor. The proprietor has the option to inform the prescribed officer about the actual number of entertainments to avoid the presumptive tax.

5. Validity of Rule 13(2) and Rule 19(ii):
The Court declared Rule 13(2), which mandates a minimum distance of 150 meters between existing cinemas and video cinemas, as ultra vires. It found that this rule was not reasonable and did not serve a legitimate purpose. Rule 19(ii), which allows police officers to inspect video cinemas, was upheld as it is necessary for ensuring compliance with the Act and maintaining public order.

Conclusion:
The Supreme Court upheld the constitutionality of Section 6-A and the relevant rules under the Gujarat Entertainment Tax Act, 1977, and the Gujarat Cinema (Regulation & Exhibition by Video) Rules, 1984, except for Rule 13(2), which was declared ultra vires. The appeals were allowed, and the writ petitions were dismissed.