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TMI Blog2019 (11) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... cipalities Act, 1973, empowers the Municipal Council to impose a tax on entertainment. It is to be noted at this juncture, that this power conferred on the Municipal Council under Section 118 to collect various taxes has not been totally taken away or subsumed under the PGST Act and on the other hand, it is apparent that only the power to collect tax on a particular subject viz., advertisements other than advertisements published in the newspapers alone has been taken away or omitted by way of imposition made under Section 173(1)(a) of the PGST Act = A careful perusal of Section 173, Sub-Clause 1 of the PGST Act, would undoubtedly, indicate that the Legislature have consciously retained the power of the Municipal Council to collect tax on all other subjects except the collection of tax on advertisements other than advertisements published in the newspapers. In other words, even after introduction of the PGST Act, in view of the specific provision made under Section 173(1) therein, what was omitted from the purview of the Municipal Council is only a tax on advertisements other than advertisements published in the newspapers and not in respect of other taxes such as property tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33077 of 2018 And W.M.P.No.38348 of 2018 - - - Dated:- 20-11-2019 - Mr. Justice K. Ravichandrabaabu For the Petitioner : Mr.G.Masilamani for Mr.P.Dinesh Kumar For the Respondents : Mr.A.Gandhi Raj Government Pleader (P) Assisted by Mr.J.Kumaran Additional Government Pleader (P) ORDER The petitioner is aggrieved against the order of the 5th respondent dated 15.07.2017, wherein and whereby, the petitioner and the other licensees of Cinema theaters were directed to remit the entertainment tax every week to the 5th respondent/Municipality. Consequently, the petitioner seeks for a direction to the 5th respondent to refund the entertainment tax paid from 01.07.2017 to till date. 2. The case of the petitioner, is as follows: The petitioner is a Cinema Theater, run by a partnership firm. Till the introduction of Goods and Services Tax, the Government of Puducherry was collecting entertainment tax from the theater owners. In the year 1995, the Government, by its G.O.Ms.157 dated 20.10.1995, exempted 10% for maintenance and permitted to pay the entertainment tax for the remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has legal right to say that the law in force viz., Sections 118 and 161 of Puducherry Municipalities Act, 1973, cannot be enforced. Hence, the impugned communication does not affect the rights of the petitioner or any other persons carrying on Cinema business. Even otherwise, the said communication was accepted by the petitioner himself. The President of the Puducherry State Cine Exhibitors Association, who is none other than the petitioner, has stated in his letter dated 20.07.2017 that, on the one hand, they have expressed consent for the SGST and the CGST and on the other hand, they have also expressed their readiness to pay the entertainment tax subject to certain reservations. Thus, the petitioner is barred and estopped from disputing the collection of entertainment tax. The writ petition itself, is not maintainable as the prayer sought for is against the imposition of law in force. Admission to the Cinema halls is treated as supply of service and as per Section 15(2) of the Puducherry Goods and Services Tax Act, 2017, the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows: Section 161 of the Puducherry Municipalities Act, 1973, specifically deals with the powers of the Municipalities to collect the entertainment tax. The impugned collection is made under this provision. This provision is not challenged. Therefore, the petitioner is not entitled to maintain the present writ petition, only against the consequential demand. Under Section 173(1) of the Puducherry Goods and Services Tax Act, 2017, Sub Section (iii) of Section 118(1)(a) of the Puducherry Municipalities Act, 1973, alone was omitted and the other taxes referred to under Section 118 of the Puducherry Municipalities Act, 1973, are retained, out of which, the entertainment tax is one. The petitioner is not entitled to take shelter under Section 173(2) of the Puducherry Goods and Services Tax Act, 2017, since the terms inasmuch as and modified referred therein would defeat the claim of the petitioner. Therefore, it is to be construed that Section 118 of the Puducherry Municipalities Act, 1973, is only modified to the extent stated under Section 173(1) of the Puducherry Goods and Services Tax Act, 2017, and not annulled in toto. Collection of entertainment tax is made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 5th respondent Municipality. The petitioner is challenging the above collection of 25% towards entertainment tax alone. In other words, the petitioner is not having any grievance against the collection of balance tax towards State Goods and Service Tax and Central Goods and Service Tax. According to the petitioner, once GST is introduced, wherein, admission to Cinema halls is treated as supply of service and consequently, the petitioner is also paying the GST both to the State and the Central Government, a separate entertainment tax cannot be collected by the Municipality, more particularly, when the collection of tax by the Municipality stands annulled even in respect of the tax, which are the subject matter of Entry 62 of the State list of the Seventh Schedule of the Constitution of India as well, as contemplated under Section 173(2) of the PGST Act. On the other hand, it is the contention of the respondents that the entertainment tax is collected by virtue of the powers conferred on the Municipality under Sections 118 and 161 of the Puducherry Municipalities Act, 1973, and therefore, such collection cannot be questioned by the petitioner, more particularly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) schedule-VII appended to the Act shall be omitted. (2) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the provisions, under any State law, authorizing levy and collection of taxes or cess or surcharge by the Government or a Municipality or a Commune Panchayat or any other authority shall stand annulled or rescinded or modified in as much as and to the extent such taxes are the subject matter of Entry 52, Entry 54, Entry 55 and Entry 62 of the State List of the Seventh Schedule of the Constitution, as amended by the Constitution (One Hundredth and First Amendment) Act, 2016. 14. Thus, after introduction of the PGST Act, Section 118(1) of the Puducherry Municipalities Act, 1973, which is in force as on today, would read as follows: 118. Taxes to be imposed.- (1) (a) Subject to any general or special order which the Government may make in this behalf, every municipal council shall impose, for the purposes of this Act, the following taxes, namely: - (i) a property tax; (ii) a profession tax; (iii) .... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 118 to collect various taxes has not been totally taken away or subsumed under the PGST Act and on the other hand, it is apparent that only the power to collect tax on a particular subject viz., advertisements other than advertisements published in the newspapers alone has been taken away or omitted by way of imposition made under Section 173(1)(a) of the PGST Act. A careful perusal of Section 173, Sub-Clause 1 of the PGST Act, would undoubtedly, indicate that the Legislature have consciously retained the power of the Municipal Council to collect tax on all other subjects except the collection of tax on advertisements other than advertisements published in the newspapers. In other words, even after introduction of the PGST Act, in view of the specific provision made under Section 173(1) therein, what was omitted from the purview of the Municipal Council is only a tax on advertisements other than advertisements published in the newspapers and not in respect of other taxes such as property tax, professional tax, duty on certain transfer of immovable property in the form of additional stamp duty and the Tax on Entertainment . Therefore, it is very clear that the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mune Panchayat or any other authority shall stand annulled in toto. On the other hand, it orders that such collection of tax by such authorities shall stand annulled or rescinded or modified inasmuch as and to the extent of such taxes are the subject matter of Entry 52, Entry 54, Entry 55 and Entry 62 of the State List of the Seventh Schedule of the Constitution of India. Thus, it is evident that insofar as the taxes being collected by the Municipality are concerned, referable to Section 118 of the Puducherry Municipalities Act, 1973, the power conferred on the Municipal Council under Section 118, is not totally annulled or rescinded and on the other hand, it is only modified as indicated under Section 173(1) of the PGST Act. The petitioner seeks to take shelter under Section 173(2) of the PGST Act, that too, on misinterpretation of the same, without properly making a conjoined reading of both sub-sections of Section 173 of the PGST Act. Therefore, the petitioner is not justified to contend that collection of entertainment tax, in this case, is without authority of law. It is to be noted at this juncture, that Entry 62 of the State List of the Seventh Schedule of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above provisions are not questioned or challenged by the petitioner. Needless to state that the challenge made against the consequential proceedings without challenging the original/main proceedings or relevant provision of law, is not maintainable. Therefore, on this ground also, this Court finds that the present challenge is not maintainable. 22. Insofar as the second limb of the prayer with regard to the refund of tax collection is concerned, the learned Senior Counsel for the petitioner fairly submitted that such consequential prayer cannot be entertained, even assuming that the petitioner succeeds in the main prayer, in view of the fact that the petitioner has already collected the entertainment tax from the Cinema viewers and thus, it is impossible to return the same to such viewers in the event of order for refund. In any event, the question of considering the consequential prayer does not arise in this case, as this Court found that the impugned challenge of the petitioner against the collection of entertainment tax itself is not maintainable. In view of the above stated facts and circumstances, the above two case laws relied on by the learned Government Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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