2016 (11) TMI 673 - HC - VAT and Sales Tax

Entertainment tax - exemption from payment - date of release of film i.e.13.05.2016 - whether the grant of exemption should be from the date of issuing of the Government Order, i.e., from 21.07.2016, or from the date of release of the feature film? - Held that - if the Government Order dated 21.07.2016 is not given effect to from the date of release of the film i.e.13.05.2016, it would result in anomalous position, since the entertainment tax could not have been collected from the viewers either by the petitioner or the Cinema Theater owners, and therefore, at this distance point of time, the question of denying the grant of exemption from payment of entertainment tax from the date of release of the movie cannot be countenanced and is required to be considered - the respondents to grant the benefit of exemption, as granted by the Government, w.e.f. from the date on which the Film was released, i.e.13.05.2016 - petition disposed off - decided in favor of petitioner.

Summary

Issues:
Request for exemption from entertainment tax; Grant of exemption from a specific date; Consideration of exemption from the date of release of the film.

Analysis:
The petitioner filed a Writ Petition seeking to quash an order deferring the request for exemption from payment of entertainment tax for a feature movie. The impugned order cited the model code of conduct in force due to directives from the Election Commission of India. The petitioner challenged this decision, and an interim stay was granted, allowing the film's release. Subsequently, the government granted exemption from entertainment tax from a specific date, leading the petitioner to file another petition seeking exemption from the date of the film's release. The main issue revolved around whether the exemption should be granted from the date of the government order or the film's release.

The court noted that the government initially did not grant the exemption due to the model code of conduct but did not outright reject the petitioner's claim. An interim stay was granted, leading to the film's release. The court emphasized that denying exemption from the date of the film's release would lead to an anomalous situation where entertainment tax could not have been collected from viewers. Therefore, the court directed the respondents to grant exemption from the date of the film's release, aligning with the principle of equity and fairness. As a result, the Writ Petition and related petitions were disposed of, with costs not imposed on any party.