2017 (8) TMI 675 - HC - VAT and Sales Tax

Entertainment tax - Section 14 (1) (d) of the Tamil Nadu Cinemas (Regulation Act 1955) - exemption from Entertainment Tax - Held that - Collection of un-issued tickets by the Tahsildar, the Investigating Officer and the report submitted are acts done in exercise of official acts and no malafide has been attributed to the Inspecting Officer. Though the writ petitioner has denied collection of excess amount and also contended that the statements of consumers, were furnished and therefore, there is a violation of principles of natural justice, this Court is not inclined to accept the same. Theatre has been given an opportunity to explain. But, there is no fruitful answer, in the explanation, dated 30/12/2016, as to the tickets found in the office of the theatre. Writ Court has properly adverted to the grounds urged and while setting aside the penalty portion, has rightly directed the theatre to pay the excess amount. Appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to order declining to quash excess collection demand and penalty under Tamil Nadu Cinemas (Regulation) Act 1955.

Analysis:
The case involved a challenge to an order directing payment of excess collection and penalty under the Tamil Nadu Cinemas (Regulation) Act 1955. The inspection revealed that the theatre had collected more than the admitted rates for tickets, leading to a demand for payment of ?8,92,862 along with a penalty. The theatre denied selling tickets at higher rates, citing exemption from Entertainment Tax for the screened movie. However, the Assistant Commissioner ordered payment based on the excess collection. The writ petitioner contended that the order was based on a best judgment method without proper consideration of their reply. They also argued against the estimation method used and the lack of natural justice principles in the proceedings.

The writ court considered the petitioner's reply and found discrepancies in the calculation of ticket sale proceeds, leading to the cash found in the theatre premises. The court noted the inability of the petitioner to explain the variations in the calculations provided by the Assistant Commissioner. The court set aside the penalty but upheld the order to pay the excess amount due to the presence of un-issued tickets at higher rates in the theatre office. The court emphasized that the inspection was official and not malicious, and the existence of un-issued tickets supported the best judgment decision.

Despite the petitioner's denial of excess collection and complaints about natural justice violations, the court found no substantial explanation for the un-issued tickets found during inspection. The court upheld the direction to pay the excess amount while setting aside the penalty. The appeal was dismissed, with no costs imposed, and the request for leave to file an appeal against the Assistant Commissioner's order was denied. The court affirmed the writ court's decision, concluding the legal proceedings.

In summary, the judgment upheld the order to pay the excess collection amount due to discrepancies in ticket sale calculations and the presence of un-issued tickets at higher rates in the theatre office. The court found no merit in the petitioner's arguments against the order and dismissed the appeal while denying further appeal requests.