Judgment

YOGESHWAR DAYAL, J.- This is an appeal on behalf of the Entertainment Tax Officer-I, Khammam and the State of Andhra Pradesh against the judgment and decree of the High Court of Andhra Pradesh dated April 3, 1986 whereby a Division Bench of the High Court struck down Section 1 of Act No. 16 of 1985 [The Andhra Pradesh Entertainments Tax (Amendment) Act, 1985] to the extent of its applicability retrospectively between September 7, 1984 to October 24, 1984.

2. To appreciate the point it is necessary to deal with the history of the Entertainments Tax Acts in Andhra Pradesh.

3. The Andhra Pradesh Entertainments Tax Act, 1939 (Act No. X of 1939) provided for levy of tax at the fixed rates on the basis of percentage of payment made by a person for admission to any entertainment. However, in 1976 by Act No. 58 of 1976, Section 4-C was introduced under which tax was levied on entertainment show on the basis of certain percentage of the gross collection capacity of the show within the jurisdiction of any local authority whose population does not exceed 25,000. Under Section 5, as introduced by that Act, it was open to a proprietor of the cinema to enter into an agreement with the authority concerned to compound the tax payable under Section 4-C for a fixed sum in accordance with the formula prescribed under Section 5. This continued till December 31, 1983.

4. By the Andhra Pradesh Entertainments Tax (Amendment) Ordinance, 1983 certain amendments were brought about. This Amendment Ordinance amended Section 4 and increased the rate of tax on the admission rate and Section 5 was substituted. Section 5, as amended, provided that the proprietor may, at his option and subject to such conditions as may be prescribed, pay the amount of the tax to the State Government every week as per the corresponding entry in column (3) thereof. The table given under Section 5 categorised theatres and the area in which the theatre is situated.

5. By the Andhra Pradesh Ordinance No. 9 of 1984 issued on March 21, 1984 with effect from March 23, 1984 the measure of tax payable under Section 4 was altered and the proprietor became liable to pay tax at the gross collection capacity per show at certain percentage. The percentage of taxation again differed depending upon the location and type of the theatre. A Bill which became later the Amendment Act No. 24 of 1984 was passed by the Legislative Assembly but not by the Legislative Council. In this situation" Ordinance No. 14 of 1984 was promulgated which was issued on April 27, 1984 bringing into force Sections 3, 6 and 13 with effect from March 23, 1984. Amendment Act No. 24 of 1984 received the assent of the Governor on May 20, 1984. Section 2 of this Amendment Act states "Sections 3, 6 and 13 shall be deemed to have come into force on the March 23, 1984 and the remaining provisions except Section 16 shall be deemed to have come into force on the January 1, 1984". Section 3 of this Amendment Act substituted Section 4 in the same terms as in the Ordinance 9 of 1984.

6. It appears there was a change of Government in Andhra Pradesh and the new Government promulgated Ordinance No. 26 of 1984 with effect from September 7, 1984. By this Ordinance the position as it was prior to March 23, 1984 was restored i.e. the entertainment tax was payable on the actual payment received for admission to the entertainment and substituted Section 4 to this effect.

7. It appears there was again a change of Government and the old Government which had gone out of power, had come to power. On October 25, 1984 Ordinance No. 31 of 1984 was issued, with retrospective effect from September 7, 1984, reintroducing payment of entertainment tax on the basis of gross collection capacity of the show. This Ordinance {Ed.: Ordinance 31 of 1984 was first repromulgated as A.P. Ordinance 3 of 1985 and then as A.P. Ordinance 10 of 1985 which was replaced by Act 16 of 1985} was replaced by Act No. 16 of 1985 which became effective from September 7, 198