The court upheld the validity of the amendments to the Assam Amusements and Betting Tax Act, 1939, ruling that they did not lack legislative competence or contravene constitutional provisions.

Amitava Roy, J.

1. The Assam Amusements and Betting Tax (Amendment) Act, 2001, introducing film surcharge and enhancing the rate of show tax, have been greeted with a challenge to the constitutional validity of Section 3 and 4 thereof, by the entertainment providers in cinematograph exhibition. The Assam Branch of the Eastern India Motion Picture Association (hereinafter referred to as the 'EMPA'), claiming itself as the sentinel of the rights and interests of the producers, distributors, exhibitors and others involved in the film industry of the State holds the cudgel.

2. This Court, while, issuing notice on 06.03.2002, stayed the realization of the levies in terms of the amended legislation.

3. I have heard Mr. S.S. Dey, learned Counsel for the Petitioner and Mr. D. Saikia, learned Standing counsel, Finance Department for the Respondents.

4. The factual foundation of the Petitioner's assailment is laid in its pleadings. It is admitted that the cinema houses in the State, are subjected to taxation as prescribed by the Assam Amusements and Betting Tax Act, 1939 (hereinafter referred to as the 'Act' or 'Principal Act'), originally enacted by the provincial legislature in exercise of powers conferred on it by Entry-50 of List-II of the Government of India Act, 1935. After the forming of the Constitution, the legislative authority to levy taxes on luxuries including taxes on entertainment, amusement, betting and gambling has been located in Entry-62 of List-II of the Seventh Schedule thereof. Section 3 of the Act, provides for tax on payments for admission, inter alia, to cinematograph exhibition. The levy of show tax in addition to entertainment tax was introduced by Section 3A vide Assam Act-II of 1950. Thereafter, both the statutory provisions have undergone amendments. While, the entertainment tax imposed on payment for admission to cinematograph exhibition is 50% of such payment, if it is Re. 1/- or less in the minimum and 100% of such payment, if the same is more than Rs. 2/-, the existing rate of show tax before the impugned amendment was 10% per show of the total payment for admission received excluding the amount of tax payable under the Act or Rs. 10, whichever was less. This tax is levied and recovered from the proprietor of the cinematograph exhibition. The Assam Amusement and Betting Tax (Amendment) Act, 2001 (hereinafter referred to as the 'Amending Act'), which received the assent of the Governor on 21.03.2001 and thereafter published in the Assam Gazette Extraordinary on 29.03.2001, not only inter alia occasioned an amendment in the definition of "entertainment" engrafted in Section 2(4) thereof, but also introduced a surcharge named and styled as "film surcharge" at the rate of 20% of the entertainment tax in addition to the said tax by inserting Clause (e) in Section 3(1) of the Principal Act. Section 3A of the Principal Act, also underwent an amendment enhancing the minimum rate of show tax payable to Rs. 100/- instead of Rs. 10/-. According to the Petitioner, the imposition of film surcharge lacks authority in law, inasmuch as no machinery provisions has been prescribed for the collection, deposit and other ancillary activities. The Petitioner has construed the levy as a fee, distinguished from a tax contending the same to be without jurisdiction in absence of any corresponding service. The amendment bearing on the show tax has been impeached to be prohibitory and discriminatory against the cinema industry of the State in general and the cinema hall owners thereof, in particular.

The cable television network as well as the other electronic devices for entertainment having been excluded from the purview of the said impost, the Petitioner has underlined that the amendments, if enforced would lead to imminent closure of the cinema halls, in the face of the growing market of pirated videocassettes and video compact discs causing serious inroads into the business prospects of the film exhibitors. The Petitioner