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2003 Supreme(All) 739
IN THE HIGH COURT OF ALLAHABAD
M. Katju, Prakash Krishna, JJ.
MANISHA PALACE - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
C. M. W. P. 614 Of 1992
Decided On : 04/07/2003
Ambrish Kumar Sharma, BHAGWATI PRASAD, BIRENDRA SINGH, C.DIXIT, DINESH DWIVEDI
The doctrine of promissory estoppel was applied, establishing that the State Government is estopped from making retrospective changes to the grant-in-aid regarding entertainment tax for Cinema Halls granted license prior to the issuance of a new Government Order.
Headnote:
Cinematograph Act - Grant-in-Aid - U. P. Entertainment and Betting Tax Act, 1979 - Section 3, Section 8(b) - Union of India v. Indo Afghan Agencies Ltd., AIR 1968 SC 718, Century Spinning and manufacturing Co. Ltd. v. Ulhasnagar Municipal Council, AIR 1971 SC 1021
Fact of the Case:
The petitioner constructed a Cinema Hall and applied for a license under the Cinematograph Act, 1918. The State Government issued a G. O. providing incentives for new Cinema Halls, but later issued another G. O. reducing the grant-in-aid. The District Magistrate ordered the petitioner to deposit the sums mentioned in the new G. O.
Finding of the Court:
The court found that the G. O. dated 14. 5. 1992 does not operate retrospectively and hence it will not be applicable to the petitioner's cinema Hall. The impugned order of the District Magistrate was quashed.
Issues: The issues revolved around the legality of the new G. O. reducing the grant-in-aid and its applicability to the petitioner's Cinema Hall, as well as the lack of opportunity of hearing to the petitioner.
Ratio Decidendi: The court applied the doctrine of promissory estoppel, holding that the State Government is estopped from making changes and reducing the grant-in-aid regarding entertainment tax in respect of cinema Hall which was granted license prior to the issuance of the new G. O.
Final Decision: The petition was allowed, and the impugned order of the District Magistrate was quashed.
( 1 ) THIS writ petition has been filed for a writ of certiorari to quash the impugned G. O. dated 14. 5. 1992 Annexure-4 to the writ petition and the order of the District Magistrate, Hamirpur of may, 1992 Annexure-5 to the writ petition.
( 2 ) WE have heard the learned counsels for the parties.
( 3 ) THE petitioner constructed a Cinema Hall named "manisha Palace" for the purpose of exhibiting cinema. He applied for a licence under the Cinematograph Act, 1918 and the District magistrate, Hamirpur, granted a licence under Section 3 of the aforesaid Act for a period from 1. 5. 1992 to 31. 3. 1993. Photocopy of the licence is Annexure-1 to the writ petition. After the grant of the aforesaid licence, the petitioner started showing cinemas in the Cinema Hall regularly w. e. f. 5. 5. 1992.
( 4 ) IN paragraph 4 of the writ petition it is alleged that with a view to encourage the construction of new Cinema Halls in the small towns of the State, the State Government on 18. 7. 1989 issued a G. O. providing for grant of certain incentives to such Cinema Halls in the shape of grant-in-aid out of the amount of entertainment tax under the U. P. Entertainment and Betting Tax Act, 1979. In this G. O. it was provided that if a new Cinema Hall is constructed within a specified period in such area/place the total population of which is not more than one lakh, the total amount of entertainment tax payable by such Cinema Halls in the first two years will be given as grant-in-aid but in the third year the amount of grant-in-aid will be only 75% of the total amount of entertainment tax payable. It was only after the issue of the aforesaid G. O. that the petitioner was encouraged and he constructed the Cinema Hall in question in Kabrai town, the total population of which is according to the census of the year 1981 only 9512. The District magistrate while granting the licence under Section 3 of the Cinematograph Act granted the said benefit of grant-in-aid to the petitioner as provided in the aforesaid G. O. Photocopy of the orders of the District Magistrate in this connection are Annexure-2 to the writ petition. On 5. 5. 1992, the district Magistrate also passed an order under Section 8 (b) of the U. P. Entertainment and betting Tax Act, 1979, photocopy of which is Annexure-3 to the writ petition.
( 5 ) IT is alleged in paragraph 7 of the writ petition that the petitioner constructed the Cinema Hall after he was given assurance by the respondents that the benefit of grant-in-aid under the policy of the State Government as contained in the aforesaid G. O. will be given to the petitioner. However, on 14. 5. 1992 the State Government issued another G. O. providing that now the amount of grant-in-aid to be given to the Cinema Halls in question for the first year, second year and third year will be equal to 75% of the entertainment tax instead of 100% of the amount of entertainment tax for first year and second year as provided in the earlier G. O. dated 18. 7. 1989. Photocopy of the G. O. dated 14. 5. 1992, is Annexure-4 to the writ petition. In pursuance of the g. O. dated 14. 5. 1992 the District Magistrate. Hamirpur. has Issued an order copy of which is annexure-5 to the writ petition directing the petitioner to deposit the sums mentioned in the said order within a week.
( 6 ) IT is alleged in paragraph 10 of the writ petition that the impugned G. O. dated 14. 5. 1992 and the order of the impugned District Magistrate are illegal as the petitioner had constructed the cinema Hall on the assurance given in the earlier G. O. dated 18. 7. 1989 and the Government has now estopped from making any change in the policy by modifying that Government order. It is alleged in paragraph 11 of the writ petition that the Cinema Hall of the petitioner was constructed prior to the issuance of the G. O. dated 14. 5. 1992 and the licence was given to the petitioner prior to the said Government order and it also started running and exhibiting cinemas from 5.
