9911796707
TMI Blog1991 (11) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... IV was granted, the area in which the theatres were situated, was a gram panchayat. By a notification published in A.P. Gazette dated September 7, 1987, the State Government declared under sub-section (3) of section 3 of the A.P. Municipalities Act (6 of 1965) that the local area which was within the jurisdiction of Kamareddy gram panchayat shall be Kamareddy municipality with effect from September 7, 1987. Thus, the gram panchayat, Kamareddy, became Kamareddy municipality with effect from September 7, 1987. Subsection (22) of section 2 of the A.P. Municipalities Act provides as under: " 'Municipality' means any of the following grades of municipalities declared as such by the Government from time to time by notification in the Andhra Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable in respect of a theatre situated in second grade municipality. As we have already mentioned, at the time when permit in form IV was granted in favour of the petitioners, the tax was at 15 per cent of gross collection capacity multiplied by 14. Questioning the validity of the demand notices, these writ petitions are filed. It is submitted by Sri. M.R.K. Chowdary, the learned counsel for the petitioners, that Kamareddy municipality was declared as second grade municipality only by notification published in the A.P. Gazette dated April 11, 1988 and therefore the Entertainments Tax Officer is not justified in issuing the demand notices asking the petitioners to pay the tax with effect from September 7, 1987, at a higher rate leviabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was published in the A.P. Gazette dated September 7, 1987. From subsection (22) of section 2 of the A.P. Municipalities Act, it is evident that municipalities can be classified into different grades such as third grade, second grade, first grade, special grade and selection grade, depending upon the annual income of the municipality. It provides that the grade of a municipality shall be declared by notification published in the A.P. Gazette. The grade of a municipality has relevance with reference to some of the provisions of the A.P. Municipalities Act. So far as the A.P. Entertainments Tax Act, 1939, is concerned, the rate of tax payable by the proprietor of a theatre depends upon the location of the theatre. Sections 4 and 5 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipality and the petitioners were asked to pay at the higher rate of tax with effect from September 7, 1987. Sub-section (5) of section 5 of the A.P. Entertainments Tax Act provides that the option permitted under section 5 of the A.P. Entertainments Tax Act shall continue to be in force till the end of the financial year in which such option is granted. The option exercised by the petitioners in the instant case was due to expire by March 31, 1988. Sub-section (6) of section 5 of the A.P. Entertainments Tax Act provides that it shall be lawful for the prescribed authority to vary the amount of tax during the period of option, if the local area in which the theatre is located, has been upgraded. As we have already mentioned, there was no upg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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