The exhibition of slides, shorts, films, trailers, etc. in cinema halls is liable to be taxed as advertisement under the Bihar Finance Act, 1981, as amended in 1985.

Uday Sinha, J. – These two applications have been heard together and will be disposed of by this common judgment. For the sake of clarity I shall refer to the facts of C.W.J.C. No. 1895 of 1986. The decision on questions of law in this case will determine the result of C.W.J.C. No. 5803 of 1986.

2. The two applications are directed against levy of advertisement tax by State of Bihar. The petitioners are Cinema Exhibitors duly licensed under the Bihar Cinema Regulations Act. The second petitioners in both the applications are the Managing Directors of the licensees. In 1981 the State enacted Bihar Finance Act embracing the law on the subject of levy of sales tax, entertainment, advertisement tax etc. etc. Part I thereof related to law of sales (sic) in Bihar. Part II thereof dealt with the advertisement tax traversing sections 62 to 81. Part II of the aforesaid Finance Act, 1981 described what was included within the expression ‘advertisement’. The charging section was enshrined in section 63 originally read as follows:

“63. Charge of Tax.–Subject to the provisions contained in section 64, every person, who makes an advertisement, whether for payment or any other valuable consideration otherwise, shall, pay on every advertisement a tax calculated at such rates and in such manner as laid down in the schedule to this part :

Provided that no such tax shall be levied on any advertisement which is not a sky-sign and which–

(a) is exhibited within the window of any building; or

(b) relates to the trade or business carried on within the land or building upon or over which such advertisement is exhibited or to any sale or letting of such land or building or any effects therein or to any sale to be held upon or in the same; or

(c) relates to the name of the land or building upon or over which the advertisement is exhibited, or to the name of owner or occupier of such land or building.

Explanation.–The expression ‘sky-sign’ in this section means any advertisement, supported on or attached to any post, pole, standard framework or other support wholly or in part upon any land, building, wall or structure including any moveable board on which, or any part of which is visible against the sky from some point of any public place and includes all and every pan of any such post, pole, standard framework or other similar devise employed wholly or in part for the purposes of any advertisement upon or over any land, building or structure upon or over any public place, which is open to the use of public whether actually used or enjoyed or not as such by the public but shall not include –

(a) any flagstaff, pole, vane or weathercock unless adopted, or used wholly or in part for the purpose of any advertisement, or

(b) any advertisement relating to the name of the land or building upon or over which the advertisement is exhibited or to the name of the owner or occupier of such land or building; or

(c) any notice of land or building to be sold, or let, placed upon such land or building.”

The petitioners had no cause for grievance by the enactment of law in section 63. In 1985 Part II of Bihar Finance Act was amended. The significant amendment was introduced in the proviso to section 63. The proviso contained three clauses as quoted earlier. The real change which has irked the petitioners was in proviso (a). After the amendment clause (a) of the proviso reads as follows :

“Provided that no such tax shall be levied on any advertisement which is not a sky-sign and which–

(a) is exhibited within the show-window or show-case of a shop or building excluding an advertisement exhibited at any place of entertainment by means of a cinematography through slides, trailer of film or films ; or”

The amended complexion of clause (a) came into effect from 1.8.1985. In terms of the amendment trailers and shorts and films which had the character of advertising goods or services became exigible to tax. By Annexure 1 dated 18.10.1985 the petitioners in C.W.J.C. No. 1895 of 1