Rajasthan High Court - Jaipur
State Of Rajasthan And Anr. vs R.T.T. Jodhpur And Ors. on 27 February, 2001
ORDER Balia, J.
(1). These petitions arise out of the order passed by the Rajaslhan Taxation Tribunal dated July 3,1997 by which the Circular issued by the Commissioner of Commercial Taxes dated 14.8.92 (Annx. 2) in the matter of making assessment of entertainment tax under the Rajaslhan Entertainment (and Advertisements) Tax Act 1957 has been quashed by the Tribunal and the assessment orders in which the returned receipt of sale by Tickets has not been accepted in the light of aforesaid circular and enhancement has been made as intended under the Circular by estimating the minimum receipts at 50% of the sitting capacity, were set aside and all cases were remanded to the assessing authority for passing fresh assessment orders in accordance with law.
(2). The impugned circular, as a matter of fact, after showing concern about the less recoveries from the cinema theaters at various townships within the State of Rajaslhan far below their sitting capacities and after instructing the officer to have periodical checking and laying down the norms for conducting regular checking where returned collection show less than the minimum estimated occupancy during the show, has issued definite instructions about assessing the tax on minimum estimate which we shall presently refer to. The relevant part of the Circular consists in its Paras 2, 6 and 7 which are reproduced hereinbelow:-
^^2 vr% ;g funsZ'k fn;s tkrs gSa fd fuEu izdkj ds Nfox`gksa dk fo'ks"kr% ,oa ckj&ckj pSfdax djsaA ¼1½ 50]000 rd dh vkcknh okys dLcs@'kgj esa fLFkfr vf/kdre izfr izn'kZu ¼'kks½ vk; dk 35izfr'kr ls de izfr 'kks vkSlr vk; okys Nfox`gA ¼2½ 50]000 ls vf/kd rFkk ,d yk[k ls de vkcknh okys dLcs@'kgj esa fLFkfrA vf/kdre izfr 'kks vk; dk 40 izfrf'kr ls de izfr 'kks vkSlr vk; okys NfoxzgA** ¼3½ ,d yk[k ls vf/kd vkcknh okys 'kgj esa fLFkr vf/kdre izfr 'kks vk; dk 50 ls de izfr 'kks vkSlr vk; okys Nfox`gA** ^^6- ;g vk'kk dh tkrh gS fd foHkkxh; vf/kdkjh fu;ekuqlkj Nfox`g ls vf/kd ls vf/kd vk; izkIr djus ds iz;kl djsaxsA bl Øe esa ;g ys[k gSa fd Nfox`g ls gksus okyh euksajatu dj dh vk; mijksDr iSjk la[;k 2 esa n'kkZ;h U;wure vk; ls de ugah gksuh pkfg,A ;g Hkh lwfuf'pr djsa fd Nfox`g esa gksus okys lHkh izn'kZu ¼'kks½ jsdkMZ @ fjVuZ esa ntZ fd;s tkrs gSaA Hkfo"; esa leLr yfEcr dj fu/kkZj.k djrs le; mijksDr iSjk la[;k 2 esa n'kkZbZ xbZ vk; dk /;ku j[kk tkos ,oa ftu ekeyksa esa izfr 'kks vkSlr vk; de dj fu/kkZj.k djus ij fo'ks"k dkj.k foLr`r :i ls nsuk vfuok;Z gSA** (3). From the aforesaid contents of the Circular, it is apparent that the Commissioner has first laid emphasis on periodical checking of the cinema halls which have shown their income below the estimated occupancy on the basis of the population of the town. All the theaters are situaled in Udaipur city which is having population above one lakh and therefore fails in clause (3) where such directions for continuous checking is in case of returned occupancy is below 50% of the capacity. Apart from these directions, it contains aforesaid direction to all assessing officers to assess the entertainment tax in respect of each cinema house within the State minimum at the estimated occupancy percentage at each show stated in the circular, irrespective of correctness of return being examined. The circular further contains a direction to disclose reasons in the order for not assessing the lax at the estimated minimum occupancy but below that figure. Therefore, the direction is not to make assessment in the light of material collected at the time of inspection, but the direction is to assess the entertainment tax in respect of cinema house situated in respect of categories of towns at the minimum percentage of occupancy shown in Para No. 2 of the circular and the assessing authority has further been directed to give reasons only in case of not making assessment above minimum slated level.
(4). To us, the aforesaid directions defy all cannons of fair procedure and smacks not only of arbitrariness and usurping the statutory functions of Assessing Authority to make assessment of Entertainment Tax in accordance with the provisions of Act and levy of charge, with artificially fixing minimum charge at 50% of the city capacity irrespective of actual occupancy as disclosed in the return by assuming it to be incorrect unless contrary is shown by the assessee. These directions amount to legislating a legal fiction raising a compulsive presumption against the assessee. What has not been provided by legislature, has been enacted by administrative circular. Under the provisions of the Act, it is prerogative of the assessing officer to make assessment in accordance with the material that comes before it and not on the extraneous consideration. One can very well understand that directions are issued to make intensive checking in particular type of cases and to make assessment in accordance with the material collected during such the checking and survey to be a fair guideline in the best interest of public revenue. But to give a mandate for minimum assessment at an estimated basis, without reference to the material collected and to furnish reasons for not accepting the minimum estimated occupancy assumed by the Commissioner in his circular is nothing but making assessment by executive fiat at minimum level which is contrary to the provisions of the Act as well as violates the mandate of duly lo act fairly as ingrained under Article 14 in all spheres of its activity by the State and its functionaries.
(5). The circular, in our opinion, is nothing less than that to force the statutory functionary under duty lo act in accordance with the provisions of the statute under which it has been created to discharge his duty not according to the provisions of law on application of his mind but at the behest of superior officer.
(6). It has been further admitted that no power has been conferred on the Commissioner under the Act-for issuing such directions in the matter of carrying out assessment. The direction to frame assessments at a particular level with mandate to give reasons for not framing the assessment not in terms of such direction is clearly ultra vires the authority of Commissioner.
(7). The only contention raised by the learned counsel for the Revenue is that in none of the assessment orders the Commercial Taxes Officer has referred to the Circular in question, and therefore, it ought not to be assumed that the assessment has been made on the basis of circular.
(8). However, the argumenls fails to impress in the totality of the circumstances. The Deputy Commissioner (Appeals) found as a fact that no reason has been given for not accepting the correctness of the return filed by the assessee and whatever is stated with reference to other towns is de hors any material mat was before Ihe assessing officer.
(9). Not only that, the order of Addl. Commissioner records in no certain terms that 'the Departmental Representative staled that assessment has been made on the basis of circular. Without expressly referring to the impugned circular in the assessmenl orders, the tenor of orders in the three assessment orders, where returns were marginally lower than 50% of the occupancy or largely lower than limit, enhancement of assessment uniformly in all cases to same level as envisaged in circular, coupled with finding of the Dy. Commissioner (Appeals) and explicit statement of learned Departmental Representative leave little room for doubt that Assessment orders are direct result of instructions contained in impugned circular.
(10). Even for the sake of argument assuming it to be correct as contended by Departmental Representative that Circular was not the only reason but there were other reasons also given by Ihe Assessing Officer for framing assessment orders, it is impossible to segregate to what extent the mind of assessing officer was affected by the mandate of the Commissioner, lo whom he is subordinate, in framing the assessment from the material collected. If the circular is taken out of consideration, which undoubtedly has been taken into consideration even according to the representation made by the departmental representative before the Tribunal, the assessment order cannot be sustained even on the ground that it has been made by taking into consideration the material which is partly relevant and parity irrelevant and it is not possible to detect the degree of decision effected by irrelevant consideration. The entire order stands vitiated.
(11). We, therefore, are in agreement with the Tribunal that Ihe circular dated 14.8.80 is ultra vires the powers of the Commissioner and has been issued in violation of the provisions of Act and also violates Article 14 of the Constitution of India deserves to be quashed and that the assessmenl orders in question are to be set aside and remanded back to the Assessing Authority for decision de novo in accordance with law.
(12). All the petitions fail and are hereby dismissed. No. costs.