Jaffna Municipal Council V. Perumaiyinar

1964 Present: Herat, J., and G. P. A. Silva, J.



JAFFNA MUNICIPAL COUNCIL, Appellant, and
A. PERUMAIYINAR, Respondent

S. C. 137/1962-D. C Jaffna, 873/M

Local authority-Imposition of entertainment tax-Requirement of proper resolution- Entertainment Tax Ordinance, ss. 2, 3, 8 (1).

A resolution was passed in 1946 by an Urban Council to levy entertainment tax at 20 per cent. The Urban Council was succeeded later by a Municipal Council (appellant) which, without passing a resolution, sought to levy tax at 25 per cent.

Held, that a local authority is precluded by sections 2, 3, and 8 (1) of the Entertainment Tax Ordinance from levying entertainment tax in the absence of a proper resolution.

APPEAL from a judgment of the District Court, Jaffna.

                                        C. Ranganathan, for Plaintiff-Appellant.

                                          No appearance for Defendant-Respondent.

Cur. adv. vult.

 March 17, 1964. G. P. A. SILVA, J.-

The plaintiff-appellant in this case, the Municipal Council of Jaffna, sued the defendant-respondent as organiser and/or proprietor of an entertainment called T. K. S. Bros. Dramas for the recovery of an amount of Rs. 13,541'63 being 25 per cent, of the total sum received as payments for admission to the said entertainment in terms of section 2 of the Entertainment Tax Ordinance, No. 12 of 1946, as amended by Ordinance No. 43 of 1947 and Act No. 2 of 1952. The appellant also claimed 75 cts. as advertisement charges.

The respondent took up the position in his answer that he was not liable to pay any sum to the appellant as no resolution to levy entertainment tax had been passed by the Council and he had devoted the net proceeds to charity and also that the claim was prescribed in law.

The following issues were raised at the trial.

              (1) Was the defendant the Organiser and proprietor of the entertainment named T. K. S. Brothers Dramas within the Plaintiff Council's area from 11.2.55 to 24.2.55 and 25.2.55 to 27.3.55 ?

              (2) Did the defendant as such organiser and proprietor receive a sum of Rs. 54,166 o 50 as payment for admission to the said entertainment ?

              (3) Is the defendant liable to pay to the plaintiff Council a sum of Rs. 13,541-62 as entertainment tax ?

             (4) Is the defendant liable to pay 75 cts. as advertisement charges ?

           (5) If the above issues are answered in the affirmative, is the plaintiff entitled to recover from the defendant a sum of Rs. 13,542'37 ?

          (6) (a) Did the plaintiff Council pass a resolution as required by section 2 of the Ordinance 12 of 1946, to impose and levy entertainment tax ?

         (b) Was such resolution if passed approved by the Executive Committee and published in the Gazette ?

         (7) If issue 6 is answered in the negative, is the plaintiff entitled to levy entertainment tax ?

        (8) Did the expenses of the said entertainment claimed by the defendant exceed 40 per cent, of the gross proceeds of the said entertainment ?

       (9) If not, is the defendant entitled to claim exemption from payment of any tax under section 8 of the Ordinance ?

      No issue appears to have been framed on the question of prescription set out in the answer presumably because it was not pursued by the respondent.

         The District Judge entered judgment for the plaintiff-appellant for 75 cts. only but dismissed his action in respect of the entertainment tax claimed with costs.

          Section 2 of the Entertainment Tax Ordinance provides as follows :- (1) Every local authority shall have power, by resolution, to impose and levy a tax (hereinafter referred to as the " entertainment tax ") on payments for admission to entertainments held in the area within the administrative limits of such authority at such rate or rates as may be specified in such resolution.

     

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