Order

The main appeal by special leave arises from the judgment and order of the High Court of Gujarat, made on March 1/4, 1985 in Special Civil Application No. 4459/84 and batch. The other appeals relate to the decision of the Bombay High Court in Ramesh Waman Roke & Ors. v. State of Maharashtra1. The Gujarat High Court has followed the decision of the Bombay High Court. In all the cases, the facts are not in dispute.

2. The respective Legislatures brought Section 6-A in Bombay and the Gujarat Entertainment Tax Act, 1977 providing for levy and collection of tax on entertainment by Video Cassette Recorder or Player on Television or Videoscope in any place of entertainment or omnibus etc. at the rates specified therein. The latter Act came into force w.e.f. June 14, 1984. The Government made Rules by name, Gujarat Cinema (Regulation & Exhibition by Video) Rules, 1984 (for short, the "Rules"). The Rules have come into force on the same date. The respondents filed the writ petitions challenging the constitutionality of Section 6-A, Rules 13(1) and 19(ii) of the Rules. The High Court while upholding the constitutionality of the Act and the Rules held that the gross collection of the entertainment tax on the Video Recorder or Video Player on Television or VIdeoscope is arbitrary and violative of Article 14. It also held that the Rules are ultra vires. Thus, these appeals by special leave.

3. In Venkateshwara Theater v. State of A.P. & Ors.2, this Court considered the constitutionality of Sections 4, 4-A and 5 of the A.P. Entertainment Tax Act, 1939 providing for levy and collection of entertainment tax on the gross collection in Cinema theater. It was held in paragraph 16 that entertainment tax that would be collected over and above the average occupancy rate would constitute the profit of the proprietor. In the circumstances, it cannot be said that the adoption of the system of consolidated levy in Section 4(1), as amended by Act 24 of 1984, alters the nature of tax and it ceases to be a tax on entertainment.

4. In paragraph 17, on the gross collections, it was held thus :

"It has been urged that since both the modes of levy of tax were prevalent prior to the enactment of Act 24 of 1984, an option should have been given to the proprietor of a cinema theatre to choose between either of the two modes and that under the impugned provisions the choice is confined to two modes of assessment under the same system of consolidated levy based on the gross collection capacity per show, one on the basis of gross collection capacity under Section 4(1) and other on the basis of gross collection capacity per show for a prescribed number of shows per week under Section 5. We find no substance in this contention. Once it is held that tax on entertainment could be levied by either of the two modes, viz., per payment for admission or gross collection capacity per show, it is for the legislature to decide the particular mode or modes of levy to be adopted and whether a choice should be available to the proprietor of the cinema theatre in this regard. The legislature does not transgress the limits of its legislative power conferred on it under Entry 62 of List II if it decides that consolidated levy on the basis of gross collection capacity per show shall be the only mode for levy of tax on entertainments."

In Paragraphs 29 and 30, it was held thus:

"29. In the instant case, we find that the legislature has prescribed different rates of tax by classifying theatres into different classes, namely, air-conditioned, air-cooled, ordinary (other than air-conditioned and air-cooled), permanent and semi-permanent and touring and temporary. The theatres have further been categorised on the basis of the type of the local area in which they are situate. It cannot, therefore, be said there has been no attempt on the part of the legislature to classify the cinema theatres taking into consideration the differentiating circumstances for the purpose of imposition of tax. T