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2019 Supreme(Mad) 2191
IN THE HIGH COURT OF JUDICATURE AT MADRAS
K. RAVICHANDRABAABU, J.
Balaji Theatre, by its partner Perumal – Petitioner
Versus
The Chief Secretary, Secretariat Officer, Puducherry & Others – Respondents
W.P. No. 33077 of 2018 & W.M.P. No. 38348 of 2018
Decided On : 20-11-2019
For the Petitioner:G. Masilamani, P. Dinesh Kumar, Advocates.
For the Respondent: A. Gandhi Raj, Government Pleader (P) assisted by J. Kumaran, Additional Government Pleader (P).
Headnote:
PGST Act - Section 173 - Pondicherry Municipalities Act, 1973 - Constitution of India - Article 226 - certain transfers of immovable property - challenge made against consequential proceedings - petitioner is a Cinema Theater, run by a partnership firm. Till the introduction of Goods and Services Tax Government of was collecting entertainment tax from theater owners – In Government, by its exempted 10% for maintenance and permitted to pay entertainment tax for remaining - After introduction of GST respondent issued a notice and informed that admission to Cinema halls is treated as supply of service and thus, directed the petitioner to get registered under Goods and Services Tax Act – Accordingly petitioner got registered under GST Act with registration - As per notice issued by respondent petitioner is tendering GST at rate with respect to tickets below with respect to tickets above amount taxable under GST excludes maintenance charges permitted to theater owners is paid to Central Government State Government - GST was introduced with a single object of One Nation One Tax and One Market”. Contrary to the said concept and against the said Act – Held, At this juncture it is relevant to note that collection of service tax and entertainment tax is under different enactment by different authorities - In this case providing admission into Cinema theater is treated as service and thus, tax on such service is collected under GST Act - On such admission viewer get entertainment viz. Movie and thus such entertainment being a different content, tax is levied on the same by the local authorities as Entertainment Tax – Thus entertainment itself being a different content, will not fit into the act of service provided by the theater owner viz. admission of the viewer into cinema hall - Therefore, the question of subsuming entertainment tax under PGST Act, or event of double taxation as contended by the petitioner, does not arise in this case so long as Municipalities Act, 1973 is in force and not repealed by introduction of PGST Act - Apart from above legal aspects touching upon merits of matter it is also to be noted that present writ petition filed against the impugned demand is not maintainable not only on reasons and findings rendered supra on merits of matter and also on reason that challenge made is only against a consequential proceedings arising out of the powers vested on respondent under Sections 118 and 161 of Municipalities Act - Both above provisions are not questioned or challenged by petitioner - Needless to state that challenge made against the consequential proceedings without challenging the original/main proceedings or relevant provision of law is not maintainable – Therefore on this ground also this Court finds that present challenge is not maintainable - Insofar as second limb of the prayer with regard to refund of tax collection is concerned, learned Senior Counsel for petitioner fairly submitted that such consequential prayer cannot be entertained even assuming that petitioner succeeds in main prayer in view of fact that the petitioner has already collected entertainment tax from Cinema viewers and thus, it is impossible to return same to such viewers in event of order for refund – Petition dismissed
JUDGMENT :
(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, calling for the records on the file of the 5th respondent proceedings in letter No.15/Commr/OM/2017 dated 15.07.2017 and quash the same and consequently, direct the 5th respondent to refund the entertainment tax paid from 01.07.2017 to till date.)
1. The petitioner is aggrieved against the order of the 5th respondent dated 15.07.2017, wherein and whereby, the petitioner and the other licensees of Cinema theaters were directed to remit the entertainment tax every week to the 5th respondent/Municipality. Consequently, the petitioner seeks for a direction to the 5th respondent to refund the entertainment tax paid from 01.07.2017 to till date.
2. The case of the petitioner, is as follows:
The petitioner is a Cinema Theater, run by a partnership firm. Till the introduction of Goods and Services Tax, the Government of Puducherry was collecting entertainment tax from the theater owners. In the year 1995, the Government, by its G.O.Ms.157 dated 20.10.1995, exempted 10% for maintenance and permitted to pay the entertainment tax for the remaining 90%. After introduction of GST, the 6th respondent issued a notice dated 29.05.2017 and informed that admission to the Cinema halls is treated as supply of service and thus, directed the petitioner to get registered under the Goods and Services Tax Act. Accordingly, the petitioner got registered under the GST Act with registration No.34AAAFB3557FIZU. As per notice dated 29.05.2017 issued by the 6th respondent, the petitioner is tendering GST at the rate of 18% with respect to tickets below Rs.100/- and 28% with respect to tickets above Rs.100/-. The amount taxable under the GST excludes 10% maintenance charges permitted to the theater owners. 50% of GST is paid to the Central Government and 50% to the State Government. GST was introduced with a single object of “One Nation, One Tax and One Market”. Contrary to the said concept and against the said Act, the 5th respondent, by his letter dated 15.07.2017 directed the petitioner and other theater owners to pay the entertainment tax over and above GST at the rate of 25% to the Municipality. So, totally in all, the petitioner is forced to pay 53% towards tax (28% by way of GST and 25% by way of entertainment tax). Inspite of several representations from the Puducherry Cine Exhibitors Association and Film Distributors Association, to cancel the entertainment tax in view of collection of GST, the 5th respondent did not consider the said request. Hence, with no option, the petitioner and other theater owners forced to pay 53% as tax. Collection of entertainment tax over and above the GST is nothing, but double taxation, which is against the Constitution of India. The 6th respondent has collected a sum of Rs.10,44,508.28 in excess for the period from 01.07.2017 to 31.10.2018. Likewise, the 5th respondent has collected a sum of Rs.96,19,068/- in excess for the period from 01.07.2017 to 31.10.2018. Such excess amount collected are liable to be refunded. Hence, the present writ petition.
3. The 5th respondent, filed a counter affidavit, wherein, it is stated as follows:
The impugned communication is only for compliance of the law in force viz., Sections 118 and 161 of the Puducherry Municipalities Act, 1973 and thus, payment of entertainment tax by the petitioner is in accordance with law. No one has legal right to say that the law in force viz., Sections 118 and 161 of Puducherry Municipalities Act, 1973, cannot be enforced. Hence, the impugned communication does not affect the rights of the petitioner or any other persons carrying on Cinema business. Even otherwise, the said communication was accepted by the petitioner himself. The President of the Puducherry State Cine Exhibitors Association, who is none other than the petitioner, has stated in his letter dated 20.07.2017 that, on the one hand, they have expressed consent
