JUDGMENT

B. P. JEEVAN REDDY, J.:- Heard learned counsel for the petitioners and the respondents.

2. Leave granted.

3. These appeals are preferred by the writ petitioners in a batch of writ petitions which were dismissed by a Division Bench of the Madras High Court by its common judgment and order dated 8th October, 1990. Questions arising in these appeals are common. So are the relevant facts. For the sake of convenience, we shall take the facts in Civil Appeal No. 2008 of 1992 arising from Writ Petition No. 8748 of 1989 (filed by Raja Theatre, represented by its licencee-Parasuram Petty village, Madurai).

4. Tamil Nadu Entertainment Tax Act, 1939 provides for levy of entertainment tax on admission to cinema theatres, among others. The rates of admission to cinema theatres in the State of Tamil Nadu are prescribed under the Tamil Nadu Cinema (Regulation) Act and the Rules made thereunder. Different rates of admission are prescribed depending upon the locality in which the theatre is situated and the amenities provided therein. Entertainment Tax is prescribed at a particular percentage of the rate of admission, which percentage again differs from locality to locality. Entertainment Tax, thus, constitutes a component of the total amount charged for admission to a cinema theatre.

5. Until the year 1978, entertainment tax was collected on the actual number of tickets sold. The owners/ exhibitors of cinema theatres were required to make over the actual amount of entertainment tax collected by them for each show to the Government. With a view to simplify the collection of tax, Sections 5(A) and 5(B) were introduced by the, 1978 Amendment Act. These sections introduced a new and substitute method of collection of entertainment tax based upon the gross collection capacity of a cinema theatre. A formula was devised to determine the tax payable per show or per week, as the case may be. Gross collection capacity meant the total amount that would be collected by a cinema theatre if all the seats therein are filled. But inasmuch as no cinema theatre can expect to have its full capacity filled for each show on each day of the month, a reasonable figure was adopted and the tax payable per show determined. If the exhibitor opted to pay the tax every week, he was entitled to exhibit any number of shows in the week not exceeding 28 shows. This system, which may be called composition system, for the sake of convenience, dispensed with the requirement of verification of the number of tickets sold for each show in each cinema theatre. It appears to be convenient to theatre-owners as well since they are relieved of the botheration of submitting returns and establishing their correctness. However, this method was not made applicable to the entire State. The theatres situated within the Municipal Corporations of Madras, Madurai, Coimbatore and the special grade municipalities continued to be governed by the original system of taxation, which may for the sake of convenience be called admission system. Theatres situated in all other local areas of the States are governed, by the composition system.

6. In 1989, the Act was further amended by Tamil Nadu Act 40 of 1989, the Act impugned herein. By virtue of this Act, the percentage of entertainment tax vis-a-vis the rate of admission in force in corporation and special grade municipality areas was brought down from 53 to 40 . At the same time, all the theatres situated within the radius of five kilometers from the peripheral limits of such areas were brought within the preview of the admission system. In other words, the theatres situated within the five kilometer belt abutting the said areas, which were hitherto governed by the composition system were brought over to the admission system. The several theatres concerned in this batch of appeals are all situated within one or the other such belt. The theatre concerned in Petition No. 8748 of 1989 is situated in village Parasuram Petty and was governed by comp