The court's interpretation of the term 'entertainments' in the relevant statutory provisions, its holding that the tax could be levied from either the exhibitor or the person obtaining admission to the entertainment, and its findings on the validity of the delegation of legislative power and the meaning of the word 'modify' in the context of taxation powers.

Headnote:
TAXATION - CINEMA SHOWS - VALIDITY OF TAXES LEVIED BY MUNICIPALITIES AND CANTONMENT BOARDS - INTERPRETATION OF RELEVANT STATUTORY PROVISIONS - POWER TO LEVY TAXES ON ENTERTAINMENTS - MEANING OF 'ENTERTAINMENTS' - WHETHER TAX CAN BE LEVIED FROM EXHIBITOR OR PERSON OBTAINING ADMISSION - WHETHER TAX IS ULTRA VIRES DUE TO DOUBLE TAXATION - WHETHER CLASSIFICATION OF CINEMAS FOR TAXATION IS PERMISSIBLE - VALIDITY OF DELEGATION OF LEGISLATIVE POWER TO GOVERNOR-IN-COUNCIL - MEANING OF 'MODIFY' IN CONTEXT OF TAXATION POWERS.
Fact of the Case:

The plaintiffs, lessees of cinema theatres in Poona and Poona Cantonment, challenged the legality of taxes levied by the Poona Municipality and the Poona Cantonment Board on cinema shows. The taxes were levied under the Bombay Municipal Boroughs Act, 1925, and the Cantonments Act, 1924, respectively.
Finding of the Court:

The court held that the taxes levied by both the Poona Municipality and the Poona Cantonment Board were valid. It interpreted the term 'entertainments' in the relevant statutory provisions to mean a show or performance, and held that the tax could be levied from either the exhibitor or the person obtaining admission to the entertainment. The court also held that the taxes were not ultra vires due to double taxation, and that the classification of cinemas for taxation purposes was permissible. Furthermore, the court found that the delegation of legislative power to the Governor-in-Council was valid, and that the word 'modify' in the context of taxation powers included the power to increase a tax.
Issues: 1. Whether the taxes levied by the Poona Municipality and the Poona Cantonment Board on cinema shows were valid. 2. Whether the term 'entertainments' in the relevant statutory provisions included cinema shows. 3. Whether the tax could be levied from the exhibitor or the person obtaining admission to the entertainment. 4. Whether the taxes were ultra vires due to double taxation. 5. Whether the classification of cinemas for taxation purposes was permissible. 6. Whether the delegation of legislative power to the Governor-in-Council was valid. 7. Whether the word 'modify' in the context of taxation powers included the power to increase a tax.
Ratio Decidendi: 1. The term 'entertainments' in the relevant statutory provisions was interpreted to mean a show or performance, and the court held that the tax could be levied from either the exhibitor or the person obtaining admission to the entertainment. 2. The court held that the taxes were not ultra vires due to double taxation, and that the classification of cinemas for taxation purposes was permissible. 3. The court found that the delegation of legislative power to the Governor-in-Council was valid, and that the word 'modify' in the context of taxation powers included the power to increase a tax.
Final Decision: The court dismissed the plaintiffs' suits against both the Poona Municipality and the Poona Cantonment Board, and also dismissed the cross-objections filed by the defendants.

Judgment -

Bavdekar, J.

1. These two appeals arise from two companion suits filed by the plaintiffs who are lessees of certain theatres situated within the limits of Poona and of two theatres known as West-End and Capitol situated within the limits of Poona Cantonment.

2. The question which comes up for determination in these two appeals is with regard to the legality of the tax which is levied by the two bodies, the Poona Municipality and the Cantonment Board of Poona, upon shows which are given at the Cinema Theatres situated within their local limits. It appears from the evidence that in the year 1920 the City Municipality was desirous of levying the tax which subsequently came to be known by the rules framed by the Municipality as a theatre tax. The tax was not, however, a tax which could be levied by the Municipality under the power conferred upon it under Section 59, Sub-section (1), Clauses (i) to (x). It was a tax which could be levied by the Municipality if at all under the provisions of Sub-clause (xi) which at that time ran as follows:

"(xi) any other tax to the nature and object of which the approval of the Governor-in-Council shall have been obtained prior to the selection contemplated in Sub-clause (i) of Clause (a) of Section 60."

3. The Municipality thereupon approached the Governor-in-Council, and it is not in dispute that the Governor-in-Council first of all gave the approval necessary under Section 59(1), Clause (xi), for the Municipality to select the tax and after the proper procedure was followed ultimately the tax was approved by the Governor-in-Council in July 1920. The tax was at first levied at the rate of Rs. 2 per day, but subsequently in the year 1941 the Bombay Municipal Boroughs Act having been passed in the meanwhile in 1925, the Municipality followed the procedure provided by the provisions of the 1925 Act for imposition of a new tax, and the sanction of the Provincial Government having been obtained, it started levying the tax at the increased rate of Re. 1 per show from 15th August 1941. The tax was similarly increased from 15th August 1948, to Rs. 5 per show.

4. In the meanwhile the Cantonment Board of Poona started levying a similar tax upon shows given at the cinemas located within the limits of the Poona Cantonment from 31st May 1947. It purported to levy this tax under the power conferred upon it by Sectoin 60 of the Cantonments Act, 1924. That section runs as follows:

"The Board may, with the previous sanction of the Local Government impose, in any Cantonment any tax which, under any enactment for the time being in force may be imposed in any municipality in the province wherein the Cantonment is situated."

The Cantonment Board had, therefore, to point out a provision under which any Municipality situated anywhere within the Province of Bombay would be entitled to levy this tax and it pointed out the provisions of Section 73, Sub-section (xiv), of the Bombay Municipal Boroughs Act, 1925 which ran as follows:

"any other tax (not being a toll on motor vehicles and trailers, save as provided by Section 14 of the Bombay Motor Vehicles Tax Act, 1935) which under the Government of India Act, 1935, the Provincial Legislature has power to impose in the Province".

The position, therefore, at the time when the Poona Cantonment Board started levying the tax, was that the Borough Municipalities situated within the Province of Bombay could levy any tax other than the one mentioned in the exception in Sub-section. (xiv) of Section 73 which could be levied by the Provincial Legislature itself in the Province. The Cantonment Board contended that such a tax could be levied by the said Legislature itself under the power conferred by the Government of India Act, 1935, Entry No. 50 of List II, Provincial Legislative Lists:

"Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling".

5. The appellants who challenged the legality of the taxes levied by the Poona Municipality and the Poona Ca

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