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TMI Blog1990 (8) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners were thus paying the tax, the Government issued G.O. Ms. No. 349 Revenue (CT.-III) Department dated May 12, 1988, stating that a concession is being given in the tax payable under section 5(1) in respect of "second run and repeatedly run Telugu pictures (feature films)". The concession is to be 30 per cent of the tax in the case of feature films whose censor certificate is aged above five years and below ten years and 50 per cent in cases where the said certificate is beyond ten years. The concession is subject to the condition that the person claiming the concession is to furnish adequate proof of having run such feature films. The person has to make an application in the form mentioned in the G.O. and within the period limited there. After the above G.O. came into force, the Commissioner of Commercial Taxes (who is also the Commissioner for Entertainment Tax) issued a circular AA2/1855/88 dated January 30, 1989 and it is this circular that is impugned in the present batch of writ petitions. The Commissioner, after referring to the provisions of G.O. Ms. No. 349 dated May 12, 1988 abovementioned, observed that in the matter of computation of the concession granted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion can be easily understood by extracting the relevant provisions of the Table in so far as they are applicable to municipal corporations. The Table ------------------------------------------------------------------------ Local authority Theatre Amount of tax (1) (2) (3) ------------------------------------------------------------------------ (a) Municipal corpora(i) Air-conditioned 23% of the gross collections and the tion capacity per show Secunderabad canmultiplied by 22. tonment area. (ii) Air-cooled 22% of the gross collection capacity per show multiplied by 22. (iii) Ordinary (other 19% of the gross collecthan air-condition capacity per show tioned and airmultiplied by 22. cooled) (b) to (g) ....................... ------------------------------------------------------------------------ The explanation to section 5(1) reads as follows: "Explanation.-For the purposes of computing the gross collection capacity per show in respect of any place of entertainment the maximum seating capacity or accommodation and the maximum rate of payment for admission determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1955 (President's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October, 1987 and published at pages 1-4 of the Andhra Pradesh Gazette, Part I, Extraordinary dated the 12th October, 1987, hereby directs that the amount of the entertainment tax payable under section 4 or 5 of the Act on the actual number of shows held with the second run and repeated run Telugu pictures (feature films) be reduced, with effect from the 1st April, 1988, by- (a) 30 per cent after the expiry of 5 years and before the completion of 10 years from the date of issue of censor certificate; and (b) 50 per cent after the completion of 10 years from the date of issue of censor certificate subject to the following conditions and restrictions namely: (1) The theatre shall screen 'second run and repeated run Telugu pictures (feature films)' for the show; Note.-For this purpose the term 'second run and repeated run Telugu pictures (feature films)' means 'any Telugu picture (feature film) after the expiry of 5 years from the date of issue of censor certificate'. (2) The burden of proof shall be on the proprietor claiming the 30 per cent or 50 per cent (as the case may be) reduction in the amount of the entertainment tax payable that the theatre screened the 'second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having mentioned the various methods for computation that were being adopted by the officers as stated above, the Commissioner finally observed as follows: "The concession envisaged under G.O. Ms. No. 349 dated May 12, 1988, is only to off-set any possible loss to the exhibitor on account of running old Telugu pictures from out of the slab rate prescribed under section 5(1). Therefore, in determining the weekly slab rate, the concerned officers should confine the concession only to the extent of the difference between the number of shows on the basis of which the slab rate is to be calculated under section 5(1) and the number of normal shows run by the exhibitor during the relevant week. The above G.O. has been given retrospective effect from April 11, 1986, and hence officers may scrutinise carefully the claims for any relief with reference to these instructions. All the Deputy Commissioners (C.T.) are requested to ensure that these instructions are implemented immediately and if any refunds have already been given, steps may be taken to revise the orders of the Entertainment Tax Officers suitably." In other words, the Commissioner approved the following method: Where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12, 1988. We have already set out the relevant provisions earlier. It will be noted that there is no reference to any particular number of shows in the Table in section 5(1). All that is mentioned in the Table in section 5(1) is that the amount of tax is to be at a certain percentage of gross collection capacity per show multiplied by certain factor. For example, in respect of municipal corporation and the Secunderabad cantonment area, the Table states that so far as air-conditioned theatres are concerned, the amount of tax is to be calculated as follows: "23 per cent of the gross collection capacity per show multiplied by 22." It is, therefore, to be noticed that the figure 22 [for that matter any other factor mentioned in column (3) of the Table] cannot and should not be understood as making a reference to any particular number of shows in a week. It should also be noted that under section 5(1), the tax payable is a weekly tax. In other words, while an exhibitor could screen 28 shows in a week as per the approval given by the Government, the Legislature thought it fit to fix a particular multiplier for various local authorities for the purpose of arriving at the "weekly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire week for all the shows that could be held within a week. In our view, the proper method of computation is to find out the proportion each category of shows (i.e., normal shows and concessional shows), bear to the total number of shows actually exhibited during the week. In other words, if the total number of actual run shows is 28 and 16 shows are normal shows and 12 shows are concessional or second run shows, the tax payable is to be arrived at proportionately as follows: Let us assume that 23 per cent of the gross collection capacity of the theatre multiplied by 22 is Rs. 6,000. That will be the weekly tax payable if all the 28 shows are normal shows. In a case where 16 are normal shows and 12 shows are concessional or second run shows the tax payable for the 16 shows will be: 16 -x 6000 = 3428.60 28 In respect of the 12 second run shows, the tax will be: 12 70 -X 6000 X -= 1800.00 28 100 (assuming 30 per cent is the tax concession given in such cases). The total tax payable would be Rs. 5,228.60. It is possible that in certain cases the proprietor has not run all the 28 shows in a week. In such an event the tax has to be worked out on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was as mentioned in the counter is not correct. In fact the petitioners want higher relief by claiming concessional rate to be applied for all the second run pictures (within 22) even at the expense of excluding some of the normal shows from the tax net, as has been done by some of the Entertainment Tax Officers initially. Why we are referring to this part of the counter is to make it clear that though example (B) is not the method suggested by most of the petitioners, that method is the method which has appealed to us as being accurate. Therefore, we hold that the Commissioner's circular in so far as it prescribes a different method of computation than what we have specified above is incorrect. The impugned circular will not, therefore, be given effect to. Instead, the procedure mentioned above shall be adopted while making assessments/reassessments or in demanding the tax for the periods governed by G.O. Ms. No. 349 Revenue (CT.-II) dated May 12, 1988 or similar G.Os. preceding the same. It has been argued for the petitioners that no reassessment should be made in respect of assessments which have already been made on the petitioners. We do not propose to go into the abovesai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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