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TMI Blog1998 (12) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... lar. 4.. The petitioner is an unemployed graduate. He took on lease a theatre for the purpose of video theatre. He purchased a projector, video cassette recorders, chairs, sound system and other required equipment for the purpose of projecting video films. The theatre has a capacity of 86 first class seats and 62 second class seats. The petitioner started exhibiting films through video cassettes from July 6, 1995. The petitioner is using 16mm video film cassettes and projecting through VCRs and video projector (Entel) sinclaire type. He is charging Rs. 7 per head for 1st class and Rs. 5 per head for 2nd class. The number of shows depends on variety of circumstances and if all the seats are filled up, he would be getting Rs. 912 per show. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred under section 7 of the Act of 1993 directed the licensing authorities to adopt the Rules/formats of applications/certificate and licence, etc., prescribed under the A.P. Cinemas (Regulation) Act, 1955 (for short Act of 1955 ) for regulating the video theatres as a stop gap arrangement pending issue of Rules under the new Act of 1993. Accordingly form K licence was issued to the writ petitioner as he had filed the required applications (J) and other certificate, etc., under the Act of 1955 read with A.P. Cinemas (Regulation) Rules, 1970 and Appendix IX to the said Rules. Since the petitioners obtained licence, they are liable to pay entertainment tax under the Act of 1939 and as the petitioners have not paid the tax, the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey are not liable to pay tax on the ground that they are governed by Act of 1993. If the Act of 1939 is not applicable, then they are not liable to pay any entertainment tax under the Act of 1939. Let us now examine whether Act of 1939 applies to the petitioners or not. 9.. Section 4 of the Act of 1939 is the charging section. It says that there shall be levied and paid to the State Government a tax on the gross collection capacity on every show (hereinafter referred to as the entertainments tax) in respect of entertainments held in the theatres specified in column (2) of the Table below and located in the local areas specified in the corresponding entry in column (1) of the said Table, calculated at the rates specified in the correspond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment. Cinematograph includes any apparatus for the representation of moving pictures or series of pictures and cinematograph film includes video films, the sound track and any work produced by any process analogous to cinematography. 12.. From a reading of the definition of entertainment read with cinematograph film, it appears that exhibition of video films amounts to entertainment within the meaning of Act of 1939. When once exhibition of video films amounts to entertainment, section 4 is applicable and the said entertainment is taxable. From a reading of section 4, it appears, that the said section is applicable to entertainments held in theatres specified in column (2) of the Table. The theatres specified are (i) air-conditioned ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As far as video films are concerned the seating capacity is determined under Appendix IX of the Rules under the Act of 1955. After the passing of Act of 1993, the Rules under the Act of 1955 are not applicable. However by virtue of G.O. Ms. No. 541 dated July 17, 1994 issued in exercise of powers under section 7 of the Act of 1993, the Appendix IX of the A.P. Cinemas (Regulation) Rules of 1955 were adopted. In other words, Appendix IX of the A.P. Cinemas (Regulation) Rules have been incorporated as having been framed under Act of 1993. Therefore, the gross collection capacity is to be determined by taking account the seating capacity determined by the licensing authority under Appendix IX of the A.P. Cinemas (Regulation) Rules as incorporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1955. The fact that the exhibition of films on television screen through video cassette recorders is taken out of the purview of Act of 1955 and a separate Act of 1993 is enacted does not lead to the conclusion that the exhibition of films on television screen through video cassette recorders are not liable to pay entertainment tax. Act of 1939 is an Act for levy and collection of tax on entertainment which is defined as cinematography exhibition which includes video films, the sound track and any work produced by any process analogous to cinematography. Therefore, as long as the exhibition of films by video cassette recorders amounts to entertainment within the meaning of the Act of 1939, the petitioners cannot escape or avoid the liab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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