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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW
RAJAN ROY, OM PRAKASH SHUKLA, JJ.
Ashok Gandhi – Appellant
versus
State Of U.P. Thru. Addl. Chief Secy. State Tax Civil Secrt. Lko. And Others – Respondent
WRIT TAX No. - 147 of 2023
Decided on : 04-03-2025
(A) Constitution of India - Article 226 - Writ petition challenging orders demanding pre-deposit of grant-in-aid amount and interest - Court emphasizes the necessity of providing an opportunity for hearing before imposing such conditions. (Paras 9, 14, 17, 19)
(B) Natural Justice - Requirement of providing a reasonable opportunity of hearing before passing any order that may cause civil consequences. (Paras 17, 18)
Facts of the case:
The petitioner, a partnership firm operating a multiplex, was directed to deposit 10% of a grant-in-aid amount due to alleged violations related to licensing and operation during the pandemic. The petitioner claims the demand was arbitrary and lacked due process.
Findings of Court:
The court found that the orders demanding pre-deposit were made without affording a hearing to the petitioner and lacked legal basis.
Issues: The main issues addressed were the legality of the demand for pre-deposit and the lack of opportunity for hearing.
Ratio Decidendi: The court ruled that demanding a pre-deposit for hearing without statutory backing and without providing an opportunity for hearing violates principles of natural justice.
Result: The impugned orders were quashed, and the representation was to be considered without pre-deposit requirements.
JUDGMENT :
(1) Heard Shri Rajeev Kumar Srivastava, learned Counsel for the petitioner and learned Standing Counsel for the State.
(2) This writ petition under Article 226 of the Constitution of India has been filed, assailing the orders dated 24.04.2023 and 26.05.2023 passed by the opposite party No. 3-District Magistrate/Licensing Authority, Saharanpur and opposite party no.1/State, respectively, whereby the petitioner has been directed to deposit 10% of the amount of grant-in-aid and interest (Rs.4,37,50,359/-) i.e. Rs.40,75,035.90 in the head of GST account within a period of one week and submit a copy of the challan so that the Commissioner, State Tax, Uttar Pradesh could be informed.
(3) Petitioner before this Court was running a cinema hall, namely, G.N.G. Multiplex, at Saharanpur, which was constructed by partnership firm as per terms and conditions of deed of partnership dated 05.03.2008 contained in Annexure no.3 to the petition. He was granted license by the licensing authority to run Audi 1 to 4 Cinema Hall in the aforesaid G.N.G. Multiplex.
(4) The State Government had issued a Government Order dated 03.01.2011, whereby in superssesion of earlier Government Orders and also Incentive Scheme, 2005, the State Government had floated new Incentive Scheme for the year 2010 for the purpose opening multiplex cinema hall in the State. This Incentive Scheme of 2010 was effective w.e.f. 31.03.2015. As per the said Scheme of 2010, the benefit of this scheme shall be admissible to all such multiplexes constructed during this period, which have completed the construction of the multiplex after obtaining prior permission for construction from the licensing authority under the rules provided in the UP Cinema Rules, 1951 and have obtained license for cinema screening by 31.3.2015. However, those applicants who, being influenced by the scheme of Government Order dated 27.09.2005, have started construction work of multiplex after obtaining prior permission of District Magistrate under the provisions of UP Cinema Rules, 1951, but have not been able to obtain license for public exhibition of films in the cinema halls of the multiplex till 31.3.2010, such multiplexes which obtain license for exhibition till 31.3.2011, will also be allowed the benefit of this scheme as per the provisions mentioned in Para-2 thereof, on compliance of other conditions mentioned in this Government Order.
(5) The petitioner, a partnership firm, claiming itself to be a licensee of Audi 1 to 4 of GNG Multiplex situated at Saharanpur, submitted an application before the Licensing Authority/District Magistrate, Saharanpur as per the aforesaid Government Order dated 03.01.2011, which was accorded by the Licensing Authority i.e. District Magistrate, Saharanpur and the petitioner was sanctioned grant-in-aid amounting to Rs. 8,88,74,933.40, vide order dated 20.07.2015 for a period of 5 years i.e. upto 31.03.2020 on certain terms and conditions.
(6) According to the petitioner, he moved an application on 29.02.2020 for renewal of the license for the financial year 2020-21 and also submitted renewal fees of license for Audi 1 to 4 i.e. Rs.2,40,000/- on 21.03.2020 before the Licensing Authority/District Magistrate, Saharanpur. However, owing to the pandemic Covid-19, the District Magistrate, Saharanpur directed all the Multiplex Cinema Hall to close down with effect from 16.03.2020 to 31.03.2020, which came to be extended till 02.04.2020. According to the petitioner, the direction for closure continued till 15.10.2020 and thereafter a SOP issued by the State Government for opening of certain activities including the Cinema Hall and Multiplex. Further, the Commercial Tax Officer/Prabhari Adhikari (erstwhile Entertainment Tax), Saharanpur also issued a general order dated 07.10.2020 to all the licensee to complete all the formalities along with the compliance report upto 14.10.2020.
(7) Apparently, the petitioner also filed an application dated 14.10.2020 for renewal of license
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