SYED SHAH MOHAMMED QUADRI, J.

( 1 ) THE special appeal and the writ petition raise the same questions of law, so they are clubbed and heard together. The special appeal is filed against the order of the Deputy Commissioner in Proceedings Rc. No. 1001/87/a6 dated November 26, 1987.

( 2 ) THE petitioner filed revision before the Deputy Commissioner (C. T.), Nellore, against the order of the Commercial Tax Officer passed in Agreement No. 64/79-80 dated January 23, 1981 refixing the amount of tax payable under section 5 (1) of the Andhra Pradesh Entertainments Tax Act, 1939 (for short, "the Act" ). The liability of the petitioner was fixed under section 5 (1) of the Act for the period from June 26, 1980 to June 25, 1981 at Rs. 720. 43 per week. The petitioner reported variation in the gross collection capacity consequent upon reduction in the seating capacity and because of upward revision of rates of admission which are said to have been approved by the Joint Collector, Ongole, the licensing authority. So far as the seating capacity is concerned, the Commercial Tax Officer took the view that the reduction in the seating capacity cannot be taken note of but fixed the gross collection capacity taking into consideration the upward revision in the rates. That order of the assessing authority was questioned in revision by the petitioner under section 20 of the Act. The revision was, however, dismissed on November 26, 1987. That order was assailed in the special appeal.

( 3 ) BEING faced with the situation with regard to the position that the revision itself was not maintainable on the application of the petitioner and therefore the special appeal is incompetent, the petitioner filed the writ petition challenging the validity of the order of the Commercial Tax Officer dated January 23, 1981.

( 4 ) IN the counter-affidavit filed by the Commercial Tax Officer, Podili, the facts are not disputed. What is submitted is that during the subsistence of the agreement the petitioner cannot claim that fresh agreement be entered into on the basis of change in the seating capacity as fresh agreement is contemplated only in case of upward revision in the rates of payment of admission of the seating capacity.

( 5 ) MR. P. Srinivasa Reddy, the learned counsel for the petitioner, submits that having regard to the provisions of rule 33 (10) of the A. P. Entertainments Tax Rules, 1939 (for short, "the Rules") and the explanation to section 5 (1) of the Act, the Commercial Tax Officer ought to have entered into a fresh agreement on the basis of the gross seating capacity calculated with reference to seating capacity.

( 6 ) THE learned Special Government Pleader for Taxes submits that as there can be no upward revision consequent upon the reduction either in the seating capacity or in the rate of admission, therefore the Commercial Tax Officer was right in ignoring the reduction in the seating capacity but applying the enhanced rates of admission to the original number of seats.

( 7 ) THE short question that arises for consideration in the writ petition is :"how the gross collection capacity should be calculated in the case of upward revision in the gross collection capacity when the number of seats are reduced but the rates of payment for admission have been enhanced ?"

( 8 ) THE expression "gross collection capacity" for the purposes of section 5 of the Act is defined in the explanation to section 4-C of the Act and it reads as follows :"explanation to section 4-C : For the purpose of this section and section 5, the terms gross collection capacity per show shall mean the notional aggregate of all payments for admission, the proprietor would realize per show, if all the seats or accommodation as determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1955 (President s Act 4 of 1955) in respect of the place of entertainment are occupied, and calculated at the maximum rate of payments for admission as determined by the said

Click Here to Read the rest of this document