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TMI Blog2011 (8) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of because they are both two organs of the State, which cannot be permitted to speak two different voices. Even though the licensing authority was under an obligation to act according to the Act of 1952, yet the licensing authority has been assigned certain duties under section 11 of the Act of 1957 and both the authorities have to therefore act in tandem. Thus the revision petitions filed by the assessees deserve to be allowed and those filed by the Revenue deserve to be dismissed - - - - - Dated:- 18-8-2011 - S.B. Sales Tax Revision Petition Nos. 12, S.B. Sales Tax Revision Petition Nos. 13, S.B. Sales Tax Revision Petition Nos. 14, S.B. Sales Tax Revision Petition Nos. 16, S.B. Sales Tax Revision Petition Nos. 17, S.B. Sales Tax Revision Petition Nos. 25, S.B. Sales Tax Revision Petition Nos. 30, S.B. Sales Tax Revision Petition Nos. 36, S.B. Sales Tax Revision Petition Nos. 43, S.B. Sales Tax Revision Petition Nos. 45, S.B. Sales Tax Revision Petition Nos. 54, S.B. Sales Tax Revision Petition Nos. 55, S.B. Sales Tax Revision Petition Nos. 56, S.B. Sales Tax Revision Petition Nos. 57, S.B. Sales Tax Revision Petition Nos. 60, S.B. Sales Tax Revision Petition Nos. 79, S.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.B. Sales Tax Revision Petition Nos. 207 of 2010, S.B. Sales Tax Revision Petition Nos. 95, S.B. Sales Tax Revision Petition Nos. 108, S.B. Sales Tax Revision Petition Nos. 137, S.B. Sales Tax Revision Petition Nos. 205 of 2011 MOHAMMAD RAFIQ J. R.B. Mathur for the Department Amit Ratnawat, Pankaj Ghiya, Miss Neelu Mathur and Pawan Sharma for the assessee JUDGMENT All these revision petitions seek to challenge the judgments passed by the Rajasthan Tax Board dated June 18, 2008, June 27, 2008, July 22, 2008, July 30, 2008 and October 29, 2009, by which Tax Board decided 11, 15 and 26 appeals, respectively. One set of revision petitions has been filed by the Revenue, which is authorised to collect the entertainment tax under the Rajasthan Entertainments and Advertisements Tax Act, 1957 (for short, the Act of 1957 ) against the judgments of the Rajasthan Tax Board dated June 18, 2008, June 27, 2008; July 22, 2008 and July 30, 2008, whereby orders of assessment, for recovery of entertainment tax from the assessees in those cases have been set aside. Another batch of revision petitions has been filed by the assessees against the subsequent judgment of the Rajas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in terms of the Government notification dated March 15, 1996 read with notification dated March 30, 2000. The licensing authority in the licence itself has prescribed the admission rate for different classes but has indicated nil amount in the column relating to entertainment tax. The assessee therefore could not have actually charged the entertainment tax and has actually not charged the same. There was thus no question of imposing such tax by the impugned order as change of opinion by the authorities of particular notification or its applicability or otherwise of that notification or attractability of another subsequent notification, cannot be basis for imposition of such a tax. The stand of the Revenue however is that the notification that was earlier issued on March 15, 1996 applied only to a unitary cinema house and not to multiplexes having more than one cinema houses, which are constructed in one building, for which purpose, special notification dated February 18, 2002 was issued by the Government in exercise of powers under sub-section (2) of section 7 of the Act of 1957. The tax exemption was granted in respect of multiplex cinema hall and drive-in-cinema/theatre th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Government being of the opinion that it is expedient in the public interest so to do hereby remits the entertainment tax (including additional entertainment, tax) in the case of newly built multiplex cinema halls and driving cinema/theatres in Rajasthan, payable for three years from the date of commencement, of the commercial exhibition as follows: (i) 75 per cent in the first year; (ii) 50 per cent in the second year; (iii) 25 per cent in the third year. Notification dated August 8, 2002. In exercise of the powers conferred by sub-section (2) of section 7 of the Rajasthan Entertainments and Advertisements Tax Act, 1957 (Rajasthan Act No. 24 of 1957) and in supersession of this Departments Notification No. F.10(14)FD/Tax- Div/97-pt.-138 dated February 18, 2002, the State Government being of the opinion that it is expedient in the public interest so to do, hereby remits the entertainment tax (including additional entertainment tax), in the case of newly built multiplex cinema halls and drive-in-cinema/theatres which have commercial exhibition on or before March 31, 2002 payable for a period of five years, from the date of comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification dated March 15, 1996 read with notification dated March 30, 2000. According to section 11 of the Act of 1957, District Magistrate-cum-Collector has power to renew or revoke or suspend the licence for a cinema hall. The licensing authority in the relevant column of entertainment tax mentioned the amount of tax as nil , therefore, there was no occasion for the assessees to have charged the entertainment tax from the viewers. Therefore, the assessees could not be required to pay the tax. Learned counsel argued that two different organs of the Government cannot be permitted to speak different voices and for that reason the assessees cannot be penalized. The assessees on the basis of previously issued notification dated March 15, 1996, incurred a huge expenditure on purchase of land and construction of the multiplex cinema halls, which is a long drawn process and cannot be completed overnight. The assessee have been treated as cinema halls and they were granted licences, which were renewed on year to year basis by the, licensing authorities in terms of section 11 of the Act of 1957. The subsequent notification dated February 25, 2008 on the basis of which the Revenue is seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a hall has not been defined anywhere and even if therefore there are more than one cinema halls in one particular building, that would still be treated as cinema hall and therefore normal definition of cinema as given in rule 2(iii) of the Rajasthan Cinemas (Regulation) Rules, 1959, would have to be relied on. The Tax Board was therefore not justified in taking a contrary view. Shri Pankaj Ghiya, learned counsel for the assessees, argued that although composition of the Bench of the Tax Board both in the earlier batch of cases and in subsequent appeals was single Bench, if however, single Bench of the Tax Board in subsequent batch of appeals differed with the opinion of the co-ordinate bench of the Board in earlier judgment, judicial propriety demanded that it ought to have made a reference to the Larger Bench. Without prejudice to his submission made above however, Shri Pankaj Ghiya, learned counsel for the assessees, has alternatively argued that in so far as the period from March 2002 to February 2005 is concerned, revision petitions of either side have become infructuous as per the subsequent Government notification dated August 8, 2002 read with amended notifications dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity defined in section 4 of the Act of 1952 has to act in an entirely different sphere whereas, the Commercial Taxes Department for realization of entertainment tax derive its power to do so from the Act of 1957. Definition of cinema as given in rule 2(iii) may be valid for the purpose of Rules of 1959 however the same would not be binding so far as the Commercial Taxes Department is concerned. Learned counsel argued that the licensing authority could not have in the license indicated nil entertainment tax unless its interpretation of such a condition was not approved by the Commercial Taxes Department. Stipulation of that condition in licence by the licensing authority was under ignorance of the correct notification of the Government that was applicable, viz., August 8, 2002 read with amended notification dated February 25, 2008. Even if subsequent notification dated February 18, 2002 has not superseded earlier notification dated March 15, 1996, that would not make any difference because earlier notification was general notification, which was issued for the cinema halls whereas, subsequent notification carves out an exception for special category of cases, i.e., newly built ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial available on record. What is not disputed and cannot be disputed is the fact that two sets of notifications, one each is relied by the assessee and Revenue in these cases imposes a similar condition that benefit of tax exemption would be available only if the commercial exhibition of the cinema was started from March 31, 2002. First notification dated March 15, 1996 was issued under section 7(2) of the Act of 1957 extending benefit of exemption to the newly built cinema halls for a period of five years subject to the condition that commercial exhibition should start up to March 31, 2000. This date was then extended up to March 31, 2002 by the subsequent notification dated March 30, 2000. Curiously, when the new notification dated February 18, 2002 was issued with reference to the same provisions for newly built cinema hall/drive-incinema/theatres, no such condition was imposed and the period of benefit of tax exemption was restricted to three years and slab that was given was 75 per cent in the first year, 50 per cent in second year and 25 per cent in third year. When however, subsequent notification dated August 8, 2002 was issued, the condition again was that commercial e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but also the licensing authority held that notification to be applicable to such multiplex cinema halls, there being no other specific notification for this category. Therefore the general notification that was issued on March 15, 1996 for newly built cinema hall was held applicable to the multiplex cinema hall as well. It is surprising why the Government did not supersede the notification dated March 15, 1996 on the strength of which licences was issued by the licensing authority, while issuing subsequent notification for multiplex cinema house/drive-in cinema/theatres in the mall dated February 18, 2002, which itself was superseded vide. subsequent notification dated August 8, 2002, This was necessary because the assessees relied on this notification dated March 15, 1996 claiming 100 per cent tax exemption for a period of five years and the, licensing authority also relying thereon, issued the licences containing, stipulation with regard to admission fee and indicated therein nil entertainment tax. Even if what is contended by the Revenue that first notification dated March 15, 1996 issued by the, Government was general notification covering cinema hall and the. subsequent no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inema as per conditions of licence, which did not permit them to collect the tax, had they started realizing the tax, it would have amounted to violation of conditions of licence thereby, entailing cancellation of licence. Now that the assessees have actually not charged the tax, they can possibly be not required to pay the same to the Commercial Taxes Department. There can be no quarrel with the proposition of law laid down by the Supreme Court in Wood Papers Ltd. [1991] 83 STC 251 (SC); AIR 1991 SC 2049 on which reliance was placed by Shri R. B. Mathur that but ratio of the abovesaid judgment is riot applicable in the facts-situation obtaining in the present case. Even if those propositions are applied in the facts of this case, once the exemption notification dated 'March 15, 1996 was applied to the assessee in the present case, unless it was specifically superseded or held to have been not been applicable or otherwise, condition of licence granted to the assessee to run the multiplex cinema hall was not altered, the question of levy of tax could not be arisen. In the facts of the case, therefore the argument of strict construction may not be available to the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Act of 1957 and both the authorities have to therefore act in tandem. The Supreme Court in Vadilal Chemicals Ltd. [2005] 142 STC 76 (SC); [2005] 6 SCC 292, where different opinions were expressed by the Commercial Taxes Department and Industries Department of the Government on grant of certain benefit under the incentives scheme to the assessee, held that the State, which was represented by different Departments, could only speak with one voice. The Supreme Court in Laxmi Industries [1995] 99 STC 584 (Raj), where despite exemption certificate issued, the tax was sought to be recovered by the Commercial Taxes Department, held that if such Department was aggrieved by the exemption certificate issued by the District Level Committee, appropriate course for it would be to get the certificate cancelled rather than conferring upon itself the jurisdiction to cancel the same. Full Bench of the Andhra Pradesh High Court in Panchalingal Carbonic Gas Pvt. Ltd. [2005] 141 STC 161 (AP) [FB] held that on account of subsequent cancellation of exemption certificate, the assessee could not be held to pay the tax, which he had not collected because it was prohibited from collecting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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