The court affirmed that licensing authorities can require No Due Certificates for license renewal under the Kerala Cinemas Regulation Act, ensuring compliance with cess payment obligations.

JUDGMENT :

S. MANU, J.

1. Kerala Cultural Activists' Welfare Fund Act, 2010 was enacted to constitute a fund for the welfare of cultural activists. In order to provide monetary resource for the Fund, Section 3C was incorporated into the Kerala Local Authorities Entertainments Tax Act, 1961, by Amendment Act of 2013.

2. Much later, G.O.No.(Rt.)No.137/2024/LSGD dated 18.1.2024 was issued with directions to the authorities concerned for proper collection of the cess, its remittance in the account of the Welfare Fund Board and issuance of No Due Certificate to the proprietors of cinema theaters.

3. Main grievance raised in these writ petitions is regarding insistence by the Secretaries of the Local Authorities concerned for production of ‘No Due Certificate’ issued by the Kerala Cultural Activists' Welfare Fund Board for renewal of license under the Kerala Cinemas (Regulation) Act, 1958.

4. Learned counsel appearing for the petitioners argued that no provision in the Kerala Cinemas (Regulation) Act, 1958 and the Kerala Cinemas (Regulation) Rules, 1988 provide for submitting ‘No Due Certificates’ issued by the Kerala Cultural Activists' Welfare Fund Board as a pre-condition for renewal of license. They therefore contended that, while exercising the power to renew the license under the Kerala Cinemas Regulation Act, Secretaries of the Local Authorities cannot insist for production of such certificates. According to the learned counsel for the petitioners, such demand would be illegal, arbitrary and unreasonable. Therefore, they submitted that the Local 11 Authorities may be directed to renew licenses under the Kerala Cinemas (Regulation) Act without insisting for submitting No Due Certificates. They referred to various provisions of the Kerala Cinemas (Regulation) Act and the Rules and pointed out that no provisions are available which would enable the licensing authority to insist for payment of cess under Section 3C of the Kerala Local Authorities Entertainments Tax Act, 1961 and production of its proof for renewing the license.

5. The learned Senior Counsel appearing for the Kerala Cultural Activists' Welfare Fund Board on the other hand contended that the petitioners are attempting to evade the liability to remit cess collected from the viewers under Section 3C of the Kerala Local Authorities Entertainments Tax Act. He argued that the licensing authorities under the Kerala Cinemas (Regulation) Act are undoubtedly justified, rather bound to insist for production of No Due Certificate issued by the Board. The 12 learned counsel referred to sub-section (6) of Section 3C of the Local Authorities Entertainments Tax Act and pointed out that provisions of Sections 5, 6, 7, 7A, 8, 9 and 10 shall apply in respect of cess on tickets for admission to cinema and the word 'tax' therein shall be construed as to include 'cess' also. He then referred to Section 6 of the Act of 1961 which deals with manner of payment of tax. Section 6(4) reads as follows:-

“6. Manner of payment of tax:

.........

(4) Notwithstanding anything contained in the Kerala Cinemas Regulation Act, 1958 (32 of 1958) or in the Kerala Panchayat Raj Act, 1994 (13 of 1994) or in the Kerala Municipality Act, 1994 (20 of 1994), no licence or permit for conducting a cinema theatre and exhibition there of shall be renewed by the local authority concerned unless the proprietor of such theatre has remitted the entertainment tax due up to the preceding month.”

6. Learned Senior Counsel argued that the above provision clearly provides that no license or permits for conducting