9911796707
Advanced Search 
TMI Blog2009 (7) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... and that the duty paid by the petitioner is correct amount of duty and the petitioner's liability to pay duty as per their claim specified in para F(c) should be held to be correct and forms the correct basis for calculating entertainment duty payable by the petitioner along with other ancillary reliefs. The petitioner is, inter alia, engaged in the business of operating a multiplex theatre named as Fame Adlabs in the city of Mumbai at Andheri. It is the petitioner's contention that on the basis of the Statements and Objects of the Ordinance and on the basis of section 3(13)(a) of the Bombay Entertainment (Amendment) Act, 2001 (Mah. 2 of 2002), the petitioner applied for exemption and setting up the multiplex for which the petitioner invested huge capital, time and efforts. On the assurance of respondent No. 1, the petitioner went ahead and set up the multiplex on the clear understanding that the nature of exemption was retention benefit whereby the petitioner was entitled to collect the entertainment duty from the patrons and not to pay the same to the State during the exemption period and, therefore, according to the petitioner, respondent No. 4 by virtue of the aforesaid ince ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the rate of entertainment duty on payment for admission which is fixed by the proprietor. On perusal of the table under section 3(1)(c), it is important to point out that the amount paid for admission to the multiplex theatre is to be fixed by the proprietor of the multiplex. For the sake of convenience table below section 3(1)(c) is reproduced which is as under: Serial No. Area Rate of entertainment duty on payment for admission by the proprietor 1 Within the limits of Brihan Mumbai Municipal Corporation 45 per cent 2 Within the limits of all other Municipal Corporations and Cantonments As such, the rate of entertainment duty must be on the payment for admission fixed by the proprietor. Therefore, it is clear that the rate of entertainment duty can only be on net price after which the gross is arrived at. Further, section 4 sets out the manner in which the entertainment duty payable is to be levied. There is a clear break-up between the entertainment duty which is calculated on the net price, and the gross. 40 per cent On plain reading of sub-section (2)(a), it is clear that the gross comprises the payment for admission to the entertainment and payment on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cilities, and multi-entertainment activities and other facilities as specified by Government in this behalf, by notification in the Official Gazette.' Bombay Entertainment Duty (Amendment) Act, 2001 (Mah. 2 of 2002), which is the statute on the basis of which entertainment duty is levied on the petitioner's multiplex complex known as Fame Adlabs (multiplex) which levy and assessment is the subject-matter of this petition. (i) The principle statute that governs entertainment duty in the State of Maharashtra is the Bombay Entertainment Duty Act, 1923 (BED Act). Section 3 of the said BED Act, inter alia, stipulates the rate of entertainment duty on payment for admission fixed by the proprietor. The prescribed rate of entertainment duty on the payment for admission fixed by the proprietor within the city limits of Brihan Mumbai Municipal Corporation is 45 per cent and for other municipal corporations and cantonments the rate of entertainment duty is 40 per cent and the other areas have a rate as prescribed under the aforesaid section. (ii) The growth of multiplex theatres can be traced in an Ordinance dated August 17, 2001 promulgated by the Government of Maharashtra being Ordinance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement of the multiplex theatre complex, no duty. (ii) For the subsequent two years, at the rate of twenty-five per cent of the rate of duty leviable under clause (b) and clause (c) of sub- section (1) or, as the case may be, for sub-section (3). (iii) From the sixth year, full amount of duty leviable at the rate specified in clause (b) and clause (c) of sub-section (1) or, as the case may be, sub-section (3): Provided that, the duty leviable shall also be subject to the provisions of sub-section (2), wherever applicable. (iv) Explanation.-For the purposes of this sub-section,- (i) The date on which the multiplex theatre complex is opened to the public for admission shall be deemed to be the date of commencement of the multiplex theatre complex; (ii) The change in the management of multiplex theatre complex, or the change in the name of the complex shall not be construed as a fresh commencement of the multiplex theatre complex. (b) The concession in duty as provided under clause (a) shall be available to the proprietor of the multiplex theatre complex subject to following terms and conditions, namely:- (i) The proprietor shall not charge less payment for admission than the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitial years from the date of commencement of the complex, whereas he will be admissible for exemption from paying 75 per cent of the entertainment tax due for the further two years. The applicant must pay the entertainment tax at the prescribed rate from the sixth year.' Exhibit 'C' to the petition is a copy of the Government resolution dated January 4, 2003 being Resolution No. ENT-1099/ Pra.Kra.76/T-1. It is important to mention that in order for an applicant to be eligible for exemption from payment of entertainment duty on the basis of the Act read with the said GR, all applicants were required to submit applications to respondent No. 3 from August 17, 2001 to August 16, 2002 to be considered for such exemption. In the light of section 3(13)(a) of the said BED Act, read with para 5(E)(i) of the said GR, the nature of exemption/ concession granted to an applicant is from payment of entertainment duty to the Government, while the petitioner is permitted to collect entertainment duty from the patrons and exempted from payment of the same. As such, for the first three years an applicant is exempted from paying the entire entertainment tax and for the next two years from paying 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtainment duty leviable from June 7, 2005. The entertainment duty is payable at the rate of 25 per cent of the rate of duty leviable, (i.e., 25 per cent of 45 per cent) as per the provisions of section 3(13)(a)(ii) of the said BED Act. The rate of entertainment duty payable under the Act can be determined on the basis of 'payment for admission' fixed by the proprietor. It is the case of the petitioner that from June 7, 2005, the petitioner has duly made payment of the entire entertainment duty to respondent No. 3 in accordance with the Act read with the G.R.s issued pursuant thereto. On June 1, 2005, the petitioner addressed a letter to the Principal Secretary, Revenue Department of respondent No. 1. In the aforesaid letter, the petitioner informed the Principal Secretary of respondent No. 1 that the multiplex became eligible for exemption from payment of entertainment duty from June 7, 2002. Further, the petitioner submitted that they were in the fourth year from the date of commencement and were by virtue of section 3(13)(a)(ii) of the said BED Act read with paragraph 5(E)(i) of the said GR, eligible to pay 25 per cent of the amount of entertainment duty with effect from June 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and exhibit 'G-1' to the petition is the copy of the said letter. On December 5, 2005, the petitioner received a notice No. 1 from respondent No. 4 calling upon the petitioner to make a payment of Rs. 1,16,95,846 being exhibit 'A-1' to the petition. In response to the aforesaid notice of respondent No. 4, the petitioner addressed a letter dated December 10, 2005 to respondent No. 4 in which the petitioner contended the following: (i) First, the petitioner was unclear as to how respondent No. 4 had arrived at the duty of Rs. 1,16,95,846. It was also unclear how the 24 per cent interest was being levied. (ii) Secondly, the petitioner contended that respondent No. 4, in arriving at the aforesaid duty, had levied the full entertainment duty at the rate of 45 per cent without considering the exemption available to the petitioner from paying 75 per cent of the entertainment duty; (iii) The petitioner further stated that the actual number of tickets for Screen I was 49,139 and not 65,245 and the actual number of tickets in Screen 5 was 56,005 and not 58,005. As such, the petitioner indicated to respondent No. 4 that (even on that count) there was an error in calculation. Furthermore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Multiplex theatres are not to show the tax amount in their tickets for the first three years from the date of eligibility and in subsequent two years they will show only 25 per cent of the rate of duty as the tax amount and not more than that. It has been stated that these instructions must be passed on to the owners of multiplex theatre complexes. It is pertinent to point out that this clarification has been issued for the first time and the same is inconsistent with the said BED Act and the said GR. (exhibit 'L' is a copy of the said circular) The petitioner also craves leave to refer to and rely upon the Ordinance dated November 29, 2005 which is converted into an Act on December 27, 2005. On January 21, 2006, respondent No. 4 issued another impugned notice/ impugned order of demand (notice No. 3) calling upon the petitioner to make a payment of Rs. 70,39,529 on the basis of a statement attached. (exhibit 'M' is a copy of the said notice dated January 21, 2006). The petitioner submits that this notice has, once again, been issued without taking into account the exemption available to the petitioner by virtue of the eligibility certificate issued by respondent No. 3 in effect f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Correct method of computation of entertainment duty as per G.R. (A) Net rate of tickets 93.05 93.05 (B) Entertainment duty 41.95 10.46 (C) Service charges Nil Nil (D) Gross rate of ticket tainment duty from the patrons, a xerox copy of the ticket of multiplex theatre 135 103.51 'Fame Adlabs' of the petitioner has been annexed as exhibit '1'. It is the case of the respondents that a meeting was convened by the Government on August 23, 2005 to discuss the issue of computation of entertainment duty, when the representatives of multiplex theatre com- plexes were also present. According to the representatives, the proprietor is not entitled to collect entertainment duty on net rate of ticket as applicable and is also entitled to retain 100 per cent of the entertainment duty for the first three years. It was pointed out to the representatives of the multiplex theatre complexes that the 'retention benefits' as is interpreted by the representatives of the multiplex theatre complexes was incorrect and the method of computation of entertainment duty was also explained. Therefore, according to the respondents, the contention of the petitioners to allow them to charge entertainm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the statement of the respondents and that the errors if any, can be verified and corrected accordingly and in any event, further notice has been issued to the petitioner demanding a sum of Rs. 70,39,529 and the errors if any, have been adjusted. Therefore, according to the respondents, petitioners are liable to pay to the Government a sum of Rs. 1,98,10,806 (1,16,95,846 + 70,39,529 + 10,75,431) till date and the petitioner be directed to pay the said amount along with further interest to the Government and the petition be dismissed with costs. The petitioner has tried to explain their case in rejoinder by pointing out that the petitioner has not increased the gross ticket price; hence the patrons are not burdened with any extra amount by way of entertainment duty or otherwise as wrongly portrayed by the respondents, in their affidavit-in-reply. While the exemption from payment of entertainment duty to the multiplex theatre complexes was introduced, under the Bombay Entertainments Duty (Amendment) Act, 2001 (Mah. 2 of 2002) on the terms and conditions specified therein, (i.e., 100 per cent exemption from paying the entertainment duty for first three years and 75 per cent exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s eligible to enjoy exemption from entertainment duty, i.e., from June 7, 2005 to January 19, 2006 to the extent of 75 per cent, i.e., concessional rate being 25 per cent of 45 per cent. Mr. Tulzapurkar, learned Senior Advocate appearing for the petitioner, submitted that the impugned notices and orders have been issued by respondent No. 4 without taking into account the exemption available to the petitioner from paying 75 per cent of the entertainment duty by virtue of its eligibility certificate received on June 7, 2002 and section 3(13)(a)(ii) of the said BED Act of 1923. It is submitted that respondent No. 4 has arrived at the illegal demand of Rs. 1,16,95,846 by levying the full entertainment duty at the rate of 45 per cent under section 3(c) of the Act notwithstanding the exemption available to the petitioner by virtue of eligibility certificate received on June 7, 2002. As such, the figure of Rs. 1,09,15,148 towards entertainment duty under notice No. 1 is on the basis of full entertainment duty at the rate of 45 per cent. He further submitted that the levy of entertainment duty at the rate of 24 per cent as sought to be imposed under section 9B of the said BED Act contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the entertainment duty from the patrons/ consumers. According to Mr. Tulzapurkar, the learned Senior Counsel for the petitioner, section 3(13)(b)(iii) stipulates that for the period of exemption the multiplex proprietor/operator is not entitled to levy service charge. As such, where the legislation wants to preclude the proprietor/operator from levying any charge, the same has been explicitly mentioned and in respect of payment of entertainment duty, there is no stipulation under the Act like in the case of service charge under the aforesaid sub-section from not levying the same on the patrons. It is further submitted that sub-section (c) of section 13 provides that in case of violation of condition (i) or (v) of clause (b), the concession shall be withdrawn and the proprietor/operator would become liable to pay duty from the date of commencement of the multiplex complex. From this, it is very clear that the proprietor/operator would become liable to pay duty collected from the patron/consumer during the concession period. Therefore, according to Mr. Tulzapurkar, it is abundantly clear that the nature of exemption is a retention benefit and not a benefit for the patrons as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates of admission in the multiplex theatre complex were conferred on the Collector but there was no cap on the admission fee and, therefore, the contention of the respondents that it was not admissible for the multiplex theatre complex to recover the entertainment duty from spectators at a prescribed rate and retain the same with them during the concessional period of five years from the date of issuance of eligibility certificate cannot be interpreted in a way to fasten the liability on the petitioner who were only liable to pay entertainment duty at the prevailing rate of 25 per cent out of the total leviable duty, i.e., 45 per cent on admission ticket and therefore, the petition deserves to be allowed. Mr. Nair, the learned Special Counsel for the State, submitted that this is a clear cut case of unjust enrichment and the State was justified in claiming that the amount of entertainment duty collected by the petitioner from the patrons as shown in the admission ticket to be paid to the Government with interest. Mr. Nair, the learned counsel for the State, has pointed out that the petitioner having disputed that in the admission ticket of the notice period, entertainment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that if that was the intention of the Constitution makers, then why did they not say so in so many words? 'Taxation' has been defined in article 366(28) to include the imposition of any tax or impost, whether general or local or special, and 'tax', shall be construed accordingly. Therefore, the word 'tax' will include any tax general, local or special. That means every kind of tax direct or indirect will come within the ambit of article 265. He has further relied upon Entry Tax Officer, Bangalore v. Chandanmal Champalal and Co. [1994] 95 STC 5 (SC); [1994] 4 SCC 463 wherein it was held as under: 'It is true that Burmah Shell [1963] Supp 2 SCR 216; AIR 1963 SC 906, Hiralal Thakorlal AIR 1976 SC 1446 and Parekh Automobiles [1990] 1 SCC 367, were concerned with State enactments which empowered the municipalities to levy the impost, all the same a close reading of the said decisions does indicate that they have read the words "sale therein" occurring in entry 52 of List II as meaning "a sale of goods within a local area for consumption or use therein",- though as a matter of fact, in a given case, the goods may be taken out and consumed there. The decisions clearly say that where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts.' Mr. Tulzapurkar, the learned Senior Counsel for the petitioner, submit- ted that the submission on behalf of the respondents and the authorities on which reliance is placed relate to the case of unjust enrichment which is not the issue in the present case. He submitted that identical issue had come before the Supreme Court in the case of R. Abdul Quader & Co. v. Sales Tax Officer, 2nd Circle, Hyderabad [1964] 15 STC 403 (SC); AIR 1964 SC 922 wherein it was held as under: (page 408 of STC) '... It is remarkable that this provision makes the person punishable for his failure to pay the amount which is not authorised as a tax at all under the law, to Government. It does not provide for a penalty for collecting the amount wrongly by way of tax from purchasers which may have been justified as a penalty for the purpose of carrying out the objects of the taxing legislation. If a dealer has collected anything from a purchaser which is not authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the dealer. But unless the money so collected is due as a tax, the State cannot by law make it recoverable si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a complex with minimum total seating capacity of 1000, and such other incidental and connected matters and facilities, and multi-entertainment activities and other facilities as specified by Government in this behalf, by notification in the Official Gazette. Thereafter, in section 3 of the principal Act, after sub-section (12), the following sub-section came to be added, i.e., (13)(a) and to that extent the Bombay Entertainments Duty (Amendment) Ordinance, 2001 came to be repealed. The Statement of Objects and Reasons which was given at thetime the Bill was introduced by the then Minister for Revenue in the House is reproduced hereunder: '(1) As a result of the onslaught of cable television and advancement in the field of information technology, the average occupancy in cinema theatres has fallen considerably and hardly any new theatres have been started in the recent past. Public at large these days prefers to see movies at home. Keeping in view this scenario, a concept of complete family entertainment center, more popularly known as "multiplex theatre complex" has emerged. These multiplex theatre complexes offer various entertainment facilities for the entire family under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uirement for setting up of a complex. 6.. As both Houses of the State Legislature were not in session and the Governor of Maharashtra was satisfied that circumstances existed which render it necessary for him to take immediate action further to amend the Bombay Entertainment Duty Act, 1923, for the purposes aforesaid, the Bombay Entertainments Duty (Amendment) Ordinance, 2001 (Mah. Ord. 24 of 2001), was promulgated by the Governor of Maharashtra on the August 17, 2001. 7.. The Bill is intended to replace the said Ordinance by an Act of the State Legislature.' Therefore, it is quite clear that the State wanted to promote and encourage multiplex theatre complexes and, therefore, it decided to offer special concessions as an incentive for a period of five years in the entertainment duty subject to certain conditions which have been incorporated by the amending Act which introduces sub-section (13) in section 3 of the principal Act after sub-section (12) and sub-section (13)(a)(i) provided for the first three years from the date of commencement of the multiplex theatre complex, no duty, i.e., there will be no entertainment duty levied and collected by the State from the proprietor o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 135, i.e., the admission fee shown as Rs. 93.05, entertainment tax Rs. 41.95 and gross total is Rs. 135. The specimen of computerised tickets in all the three phases, i.e., when the incentive was duty-free, duty was 25 per cent of the entertainment duty and when no incentive was available they were required to charge full entertainment tax, i.e., 45 per cent in the cinema theatres in Mumbai. During 100 per cent tax exemption, the ticket shows total Rs. 135 without any classification. During 75 per cent tax exemption, before circular dated January 5, 2006 was issued, the computerised ticket shows admission as Rs. 93.05, entertainment tax Rs. 41.95 and gross total Rs. 135. During 75 per cent exemption after circular was issued, it shows admission fee Rs. 121.30, entertainment tax Rs. 13.70 and gross total Rs. 135. Therefore, what is demonstrated by these three tickets is that gross ticket or admission fee which the exhibitor wanted to charge was Rs. 135 during the period of 100 per cent tax exemption and also during 75 per cent tax exemption. The disputed period is in relation to before and after circular dated January 5, 2006 came to be issued. There also the gross ticket or ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t tax duty and ought to have shown 25 per cent on their tickets as entertainment tax duty. Section 3(13)(a) of the said BED Act which clearly regulates the scheme is also charging section in so far as the liability to pay entertainment duty is concerned which clearly provides that entertainment duty shall be levied and collected by the State Government from the proprietor of multiplex theatre complex the per cent of duty in respect of any such complex is given in the Schedule and then specifies that for the first three years from the date of commencement of the multiplex theatre complex, no entertainment duty will be levied and collected by the State from the proprietor of a multiplex theatre complex and (ii) for the subsequent two years, at the rate of twenty-five per cent of the rate of duty leviable under clause (b) and clause (c) of sub-section (1) or, as the case may be, for sub-section (3) and (iii) from the sixth year, full amount of duty leviable at the rate specified in clause (b) and clause (c) of sub-section (1) or, as the case may be, sub- section (3). We are concerned with sub-clause (a)(ii) where the proprietor of multiplex theatre complex is liable to pay duty at 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plementing the G.R. issued under the Rules which govern the printing and publishing of admission tickets. The clauses in G.R. clearly provides for mentioning of various heads while publishing, printing admission tickets to the place of entertainment. In all probability, the proprietors of multiplex theatre complex till the circular dated January 5, 2006 came to be issued (which according to the respondent-State was clarificatory in nature), felt that they have to show entertainment tax on the admission ticket and can claim 75 per cent tax exemption of the same and for this reason they have shown entertainment ticket as per the rate prevailing in the prescribed municipal areas and this is how the petitioners have also filed their returns with Entertainment Department of the State and claimed 75 per cent tax exemption out of 45 per cent which is normally levied where no exemption is granted. It is not disputed that after the circular dated January 5, 2006 came to be issued, all the proprietors accordingly corrected the entertainment tax printed on the admission tickets. The contention of the learned A Panel Counsel for the State of Maharashtra that the circular dated January 5, 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is the core question involved herein. It arises out of a judgment and order dated October 21, 2008 passed by a Division Bench of the Bombay High Court in Writ Petition No. 22 of 2006. Background facts: The respondent is a company registered and incorporated under the Companies Act, 1956. It, inter alia, is engaged in the business of operating a multiplex theatre, commonly known as Fame Adlabs in the town of Mumbai for screening of films in the said theatre. Indisputably, the provisions of the Bombay Entertainments Duty Act, 1923 (for short, "the Act") are applicable to the said multiplex theatre. The State of Maharashtra, however, adopted a policy decision to provide certain exemptions in the matter of payment of entertainment duties. Entertainment duty is payable at the rate of 45 per cent on payment for admission by the proprietors so far as multiplex theatres constituted within the limits of the Brihan Mumbai Municipal Corporation are concerned. The respondent availed of the said exemption. It, however, even during the period for which it was not liable to pay any duty or duty at the rate of 25 per cent only realized the entire duty. The appellants issued a notice dated Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereof entertainment duties were to be levied and collected, the High Court committed a serious error in opining that the State had not granted any exemption to the owners of the multiplex theatre, but the same were by way of retention benefit. (ii) As admittedly from the tickets issued by the respondent, it would appear that they had realized full duties from the cinema-goers payable in terms of the Act for which they had no authority, the impugned judgment is wholly unsustainable. (iii) Any amount of tax illegally realized by the assessee from the cinema-goers would be hit by section 72 of the Indian Contract Act, 1872 and, thus, the State would have right to recover the same in exercise of its power conferred on it under article 296 of the Constitution of India. Mr. H.N. Salve, learned senior counsel appearing on behalf of the respondent, on the other hand, would contend: (i) Under section 3(13) of the Act read with rule 15 of the Rules which is applicable in this case, the respondent was entitled to exemption from payment of the entire duty for a period of three years and duty at the rate of 25 per cent for the next two years, inter alia, in the event it charged the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges or both are or are not provided to him against such payment; (vi) any payment made by a person by way of contribution or subscription or installation connection charges or any other charges collected in any manner whatsoever for television exhibition with the aid of any type of antenna with a cable network attached to it or cable television; (vii) any payment made by a person to the proprietor of a Directto-Home (DTH) Broadcasting Service by way of contribution, subscription, installation or connection charges, or any other charges collected in any manner whatsoever for Direct-to-Home (DTH) Broadcasting Service with the aid of any type of set top box or any other instrument of like nature which connects television set at a residential or non-residential place of connection-holder directly to the satellite; and (viii) any payment made by way of sponsorship amount for a programme which is organised only for invitees, without selling tickets." Section 2(d) defines "admission to an entertainment" to include admission to any place in which the entertainment is held. Section 2(f) defines "entertainment duty" in respect of any entertainment to mean the entertainment duty levied un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission shall not be less than the prevailing highest rate, excluding the rates of the highest priced fifty seats, in any of the cinemas theatres in the district in which multiplex is situated and accordingly such minimum rates of admission may be different for morning, matinee and other shows; ..." Section 4 of the Act reads as under: "4. Method of levy.-(1) Save as otherwise provided by this Act, no person other than a person who has to perform some duty in connection with an entertainment or a duty imposed upon him by any law, shall be admitted to any entertainment except with a valid printed ticket or complimentary ticket. (2) Every proprietor of any entertainment in respect of which the entertainment duty is payable under section 3, shall apply to the prescribed officer by the fifteenth days of January of every calendar year, to allow him to pay the entertainment duty due and payable, and the prescribed officer may, on receipt of such application, allow the proprietor, on such conditions as the State Government may specify by general or special order issued in that behalf, to pay the amount of entertainment duty due. (a) by a consolidated payment of percentage, to be fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etor from the operation of this rule or any part thereof. ... 15.. Unstamped tickets issued under section 4(2)(a) and (b).-(1) Every ticket, not being a complimentary ticket, issued by a proprietor who has been allowed to pay the duty under the provisions of clause (a) or clause (b) of sub-section (2) of section 4, shall consist of three parts. One part shall remain on the ticket book and the remaining two parts shall be detached therefrom and issued to the purchaser; and shall bear on each part of such ticket the price of admission, the book number and the serial number (being such series and numbers in respect of the ticket book and tickets as may be previously approved by the prescribed officer) and the date on which, and the show for which it is issued. (2) On admission of the purchaser, the proprietor shall cause to be collected one of the two parts sold to the purchaser and the other to be returned to him. (3) The purchaser shall retain his part of the ticket till he leaves the place of entertainment, and the part retained by the proprietor shall be retained by him till the entertainment is over: Provided that the prescribed officer may, upon such conditions and for such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be printed in the format shown below: Alphabet of series Code No. of theatre Sale Centre Show time Show date/day Seat group Row No. Seat No. Roll No. Name of theatre Address A/D/P counter Six digit ticket number Entrance fee Entertainment tax Service charges Total entrance fee Rs." Clause 3 of the resolution dated January 4, 2003 reads as under: "3. It was declared by the Government resolution dated the Sep- tember 20, 2000 that the concessions to be granted in the entertainment tax to the multi purpose cinema theatres complexes would be implemented during the period from the August 17, 2001 to August 16, 2002. There was very good response to the said scheme in the State. Total 221 applications were received by Government in the State for grant of availing concession in the entertainment tax available to the multi purpose cinema theatres complexes. Government had decided that all the applications should be properly scrutinized from the point of view of getting concessions in the entertainment tax only to the appropriate multi purpose cinema theatre and all the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, wherewith we are concerned, provides for an exemption. It contains a non obstante clause. Such exemption is granted wholly or partly and spread out over a period of five years. It is to be granted to the owner of the multiplex theatre complexes subject to the terms and conditions specified in clause (b) of section 3(13) of the Act. The crucial words are "there shall be levied and collected by the State Government". Such levy and collection is to be made from the proprietor of a multiplex theatre complex. By reason of the said provision, no duty is to be paid. If no duty is to be paid by the multiplex theatre complex, the question of the same being levied and collected would not arise for a period of three years. Similarly, for a subsequent period of two years, the levy and collection would be at the rate of 25 per cent of the rate of duty leviable under clauses (b) and (c) of sub-section (1) of section 3 of the Act. Indisputably, in terms of clause (c) of sub-section (1) of section 3 of the Act, as noted hereinbefore, the rate of entertainment duty on payment of admission fixed by the proprietor within the limits of Brihan Mumbai Municipal Corporation would be 45 per cent whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The respondent had indisputably been collecting 45 per cent of the amount of admission fee by way of entertainment duty, i.e., the full duty payable in terms of the provisions of the said Act and the Rules. The contention of Mr. Salve that the entire amount of Rs. 135 became chargeable from the cinema-goers as a price is fallacious. If the sum of Rs. 135 is the amount which the owner of a multiplex theatre complex becomes entitled to appropriate, the rate of admission would come down from the sixth year in so far as that, whereas for the first three years, the respondent would be entitled to keep a sum of Rs. 135 with it; for the next two years, it would become entitled to Rs. 124.54 only and Rs. 93.05 from the sixth year. Section 3(13)(a) of the Act uses two different terms, viz., duty and admission. They must be held to have different meanings. It is one thing to say that in terms of the Rules they were not liable to show the rate of tax collected from the cinema-goers but it is another thing to say that although they had collected the full rate of tax from the cinema-goers, they would be entitled to retain the benefit thereof. Whether a statute expressly confers power on an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t permits forfeiture plus prosecution. The word 'penalty' in its limited sense in section 37(1) and section 37(4) does not include forfeiture which is a different punitive category. Forfeiture is a penalty, in its generic sense, but not a penalty in the specific signification in section 37(1) and (4). After all, the functionary is exercising quasi-judicial powers and not insisting on maximum exactions. Every consideration which is just and relevant must enter his verdict lest the order itself be vitiated for being unreasonable or perverse exercise of discretion. The fulfilment of the undertaking must be ensured by necessary guarantees so that the dealer may not play a double game and the purchaser stand betrayed. We are not giving any hidebound prescriptions but stating guidelines for taxing authorities who exercise these quasi-judicial powers. There is a tendency for valiant tax executives clothed with judicial powers to remember their former capacity at the expense of the latter. In a welfare State and in appreciation of the nature of the judicial process, such an attitude, motivated by various reasons, cannot be commended. The penalty for deviance from these norms is the peril t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pliance with other provisions. The High Court, however, opined that had the State provided for an exemption, it could have invoked section 6 of the Act but before us Mr. Salve conceded that that part of the judgment is not correct as section 6 has no application in a case of this nature. In absence of any express statutory provision, allowing the proprietors of the multiplex theatre to retain the benefit, it is difficult for us to arrive at such an inference. The State has power to impose tax. The State has a power to grant exemption or concession in respect of payment of tax. It has no power in terms of the provisions of the Constitution or otherwise to allow an assessee to collect the tax and retain the same. We will assume that to that effect the provisions are not very clear but the superior courts will not interpret the statute in such a way which will confer an unjust benefit to any of the parties, i.e., either the tax-payer or tax collector or the State. The statute must be interpreted reasonably. It must be so interpreted so that it becomes workable. Interpretation of a statute must subserve a constitutional goal. A statute of this nature, in our considered opinion, can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutary do ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
