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Andhra Pradesh High Court
Judges : K.BHASKARAN, K.RAMASWAMY, Y.V.ANJANEYULU
Film Exhibitors, Guild - Appellant
Versus
State - Respondent
Decided On : 01-24-87
ENTERTAINMENT TAX - SHOW TAX - LEVY - PROPRIETOR OF CINEMA THEATER - OPTION TO PAY TAX UNDER S. 5 OF ANDHRA PRADESH ENTERTAINMENT TAX ACT, 1939 - LIABILITY TO PAY SHOW TAX UNDER S. 4-A OF THE ACT - WHETHER LEVIABLE.
Fact of the Case:
The petitioners, a film exhibitors' guild and the proprietor of a cinema theater, challenged the levy of show tax under S. 4-A of the Andhra Pradesh Entertainment Tax Act, 1939 (the Act), while they had opted to pay entertainment tax under S. 5 of the Act.
Finding of the Court:
The Court held that the proprietor of a cinema theater who opts to pay composition tax under S. 5 of the Act is liable to pay show tax under S. 4-A of the Act in addition to the composition tax.
Issues: Whether the proprietor of a cinema theater, on agreeing to pay entertainment tax under S. 5 of the Act, is also liable to pay show tax under S. 4-A of the Act.
Ratio Decidendi: 1. S. 4 of the Act charges the proprietor of a theater to pay entertainment tax on every show. S. 4-A charges the proprietor to pay show tax in addition to the tax under S. 4. S. 5 affords an option to the proprietor to pay composition tax in lieu of the tax payable under S. 4. 2. S. 5 is a complete Code by itself only for the purpose of composition of the tax under payment thereunder instead of the tax under S. 4. S. 5 is an enabling and relieving provision; an enabling one to make avail of alternative mode of composition of the tax and the consequential payment. It relieves a proprietor from the obligation to pay entertainment tax on every show. 3. The legislative history of S. 4-A also furnishes a clue. S. 4-A was initially brought on statute by S. 3 of the Madras Amendment Act 17 of 1949. It is a tax in addition to the tax payable under S. 4 and its operation was confined to the theaters situated within the jurisdiction of any local area whose population is between 25,000 to 50,000 and above. Therefore, the Act is inapplicable to the theaters situated in any local area whose population is below 25,000. As a result, S. 4 C was enacted to provide show Tax in places with population not exceeding 25,000, in the accorded percentage as shown in Col. (3) (i) to (iv) thereof. Therefore, right from 1949, show-tax, in addition to the entertainment tax, was being levied on every proprietor of a theater and paid to the State Government at the rates calculated in the manner prescribed under the relevant S. 4-A or S. 4-C. 4. In the Amendment Act, S. 4-C was deleted and S. 4 A was suitably amended bringing in its ambit all the theaters under the Table appended to S. 4-A (1) and the show tax to be levied and paid at the percentage prescribed in the Table applicable to the relevant theaters in the relevant local areas. The Amendment Act brought on statute, S. 5 with a view to afford an option to a proprietor to avoid the liability to pay entertainment tax on every show under S. 4, composition tax, if agreed to be paid under S. 5, in lieu of tax under S. 4 while retaining the liability to pay show-tax under S. 4 (4-A ? ). 5. S. 4 is the charging and machinery Section for entertainment tax and S. 5 is only a machinery Section to quantify and payment of the composition tax in the manner prescribed under Sub-S (1) to (5) of S. 5 read with R. 27 and Form IV or revision or cancellation thereof under Sub-S (6) to (9 ). There is no ambiguity regarding charging Section. We further hold that a proprietor who opts under S. 5 (1) to pay composition and accorded permission by the entertainment tax Officer, so long as such permission subsists, shall pay composition tax under S. 5 (4) in addition to the show tax under S. 4-A.
Final Decision: The Court dismissed the writ petition challenging the levy of show tax under S. 4-A of the Act.
( 1 ) THE point raised before the Full Bench is, whether, the proprietor of a Cinema Theater, on agreeing to pay entertainment tax under S. 5, Andhra Pradesh Entertainment Tax Act (10 of 1939), for short, "the Act", is also liable to pay show-tax" under S. 4-A of the Act, as mended in Act 24 of 1984, for short, "the Amendment Act". (It replaced the Andhra Pradesh Ordinance No. 9 of 1984 which came into force with effect from 1-1-1984 ).
( 2 ) TO bring home the point in issue, the material facts in W. P. No. 14852/86 that lie in a short compass are stated thus : The first petitioner is a film exhibitors guild, a registered society, the second petitioner is the proprietor of Viswanadha Picture Palace, Chilakaluripet. The members of the Ist petitioner s society are having Cinema Theaters in local areas of second grade municipalities and they applied for permission to pay tax under S. 5 in lieu of the tax payable under S. 4 in Form III and as per R. 27. They are governed by item (e) of Column 1 of the table appended to S. 4. They were permitted to pay tax under S. 5 in Form IV. Yet they are called upon to pay show-tax, though they are not liable as they have opted to pay tax under S. 5. Despite their objection, when insisted upon, without prejudice to their right to recover or seek adjustment in the future entertainment tax payable, they have been making payments thereof. Their application on August 8, 1986, followed by a reminder informing the IInd respondent that they are not governed by S. 4-A resulted in the impugned endorsement dt. Nov. , 6, 1986, rejecting their stand and they are called upon to pay show-tax under S. 4-A in addition to the tax under S. 5. These facts are not in dispute. They are seeking mandamus directing the respondents to refrain from collecting "show-tax" under S. 4-A; consequential direction to refund or adjust the excess tax payments so far made and also to quash the impugned Memo. No. 298/86 C dt. Sept. , 6, 1986. One of the points raised in W. P. No. 10703/85 at the instance of the petitioner-proprietor is the same, though the facts are slightly different. Hence it is unnecessary to dilate those facts since the point involved is the same.
( 3 ) SRI Venktata Sastry, learned counsel for the petitioners, contends that S. 4 enjoins payment of entertainment-tax on gross collection capacity on every show in the manner prescribed therein. S. 5 affords an option to the proprietor of a theater specified on Column 2 of the table appended to Sub-S (1) of S. 5, situated in the local areas in the corresponding Col. (1) for permission to pay the amount of tax every week as specified in corresponding Entry No. 3 thereof. The members of the lst petitioner society and the IInd petitioner have opted for the same; they were accorded permission by the IInd respondent and the permission shall continue till the end of the relevant financial year though subject to variability depending upon the exigencies enumerated in S. 5. S. 4-A enjoins the proprietor of the theater to pay show-tax in addition to the tax under S. 4. Once the option exercised by the proprietor is accepted and given permission to pay the consolidated entertainment tax, for short composition tax , irrespective of the number of shows exhibited and paid as per Sub-S (4) of S. 5, the liability engrafted under Sub-S (4) is absolved. S. 5 does not postulate of payment of show-tax in addition to the tax under S. 5 but in lieu of tax under S. 4. Suitable phraseology like the one in S. 4-A was not incorporated in S. 5. Therefore, the legislature intended that those who opted to pay composition tax under S. 5 are relieved of their liability to pay show-tax under S. 4-A. The power to levy and collect the show-tax is without authority of law and jurisdiction. The learned Government Pleader, on the other hand, contends that the show-tax is in addition to the entertainment tax under S. 4. Once the liability is fixed under S. 4 and S. 4-A, on acceptin
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