The main legal point established in the judgment is the interpretation of the term 'payment for admission' under the Travancore-Cochin Local Authorities Entertainments Tax Act 1951, and the statutory duty of the local authority to issue labels indicating the proper entertainments tax for each ticket. The judgment clarified that any payment made to the local authority by way of tax without complying with its statutory duty would be an illegal levy and refundable by the authority.

1. The questions in this writ appeal arise on the provisions of the Travancore-Cochin Local Authorities Entertainments Tax Act 1951. This was enacted, as its preamble says, "to give power to local authorities to impose a tax on amusements and other entertainments". S.3 of the Act, which may be said to be the charging Section, is in the following terms:

"Any local authority in whose local area this Act is in force may levy a tax (hereinafter referred to as the entertainments tax) at a rate not less than ten per cent, nor exceeding twenty-five per cent, on all payments for admission to any entertainment."

Pursuant to this, the respondent, the Mattanchery Municipality, by its bye-law fixed the rate of entertainments tax at 18f per cent on all payments for admission to any entertainment. The meaning of the term "payment for, admission" is in controversy. According to the respondent, it connotes whatever amount is actually paid by a person for obtaining admission to the entertainment and according to the appellant, the proprietor of an entertainment called Star Talkies situated in Mattanchery, it connotes only the balance of such amount after deducting therefrom a sum equivalent to the entertainments tax payable. The learned single judge has accepted the contention of the respondent and dismissed the appellant's writ petition.

2. The Act has furnished a definition, though an inclusive one, of the term "payment for admission" which supports the respondent's contention; That definition is as follows:

Sec. 2 "In this Act, unless there is anything repugnant in the subject or context xxx (8) 'Payment for admission' includes

(a) any payment made by a person who having been admitted to one part of a place of entertainment is subsequently admitted to another part thereof, for admission to which a payment involving a tax or a higher rate of tax is required;

(b) any payment for seats or other accommodation in a place of entertainment; and

(c) any payment for any purpose whatsoever connected with an entertainment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment". It seems to us implicit in the definition, that payment for admission is the totality of the payment made by a person for securing admission to an entertainment, without excluding any part of it without which he would not be admitted. Entertainments to which admission is by tickets are treated as a separate category by the Act, for the purpose of the levy, assessment, and collection of entertainments tax and even in this category fall cases, in which it is open to the proprietor, subject to rules, to compound the tax for a consolidated payment. Such cases of compounding apart, the present case pertains to the above category and our discussion is strictly limited to it. The material part of S.5 (1) (a) reads:

it... no person shall be admitted for payment to any entertainment where the payment is subject to the entertainments tax, except

(a) with a ticket stamped with an impressed, embossed, engraved or adhesive label issued by the local authority indicating the proper tax for such ticket;"

This casts a duty on the local authority to issue a label indicating the proper entertainments tax for each ticket with which it is to be stamped. S.6 (1) so far as it is relevant, provides that,

"the entertainments tax shall be levied in respect of each person admitted for payment and in the case of admission by ticket, shall be paid by means of a ticket referred to in clause (a) of sub-section (1) of S.5, ...."

The combined effect of S.5 (1)(a)& S.6(1) as extracted, is that no person shall be admitted to an entertainment except on a ticket of admission, the full value of which is inclusive of the entertainments tax payable thereon which is indicated by the label issued by the local authority to be stamped on it. This is the manner as prescribed by the Act, for the collecti