Madras High Court
S.V. Rangiah vs Commissioner Of Commercial Taxes, ... on 18 April, 1988
ORDER
1. The main grievance of the petitioner in this writ petition is that the procedure as laid down in (1964) 1 MLJ 394 (Kamalammal v. Board of Revenue) has not been followed by the assessing authority.
2. Section 3(1-A) of the Tamil Nadu Entertainments Tax Act, 1939 is now sought to be brought as defence to uphold the validity of the order of the respondent which is now impugned. The relevant portions of the order read as follows :
"The objections raised have been considered in W.P. No. 1084 dated the 6th july, 1974, and the Madras High Court has held that it was impossible for the petitioners to have collected the surcharge by the appropriate authority. If the Entertainments Tax Officer as the assessing and collecting authority has any function to perform it is clear that one of such functions is to see that the proper amount of tax is displayed upon the ticket and if that is not done, he is entitled under the law to refuse to seal the ticket and thereby prevent the exhibition of the show. It is mostly due to his inaction coupled also with the Collector in adjacent districts that these petitioners were presumably waiting for definite orders in the matter. Their Lordships observed that having regard to all the circumstances of the case it is only from the date when the tickets displaying the additional surcharge were accepted and passed by the appropriate authority that the Commercial Tax Officer can lawfully issue a demand for such surcharge. He allowed the petition to this extent that the demand would be operative only on and from the date when the appropriate authority authorised the issue of revised tickets. The facts relating to W.A. Nos. 144 to 156 of 1955 related to a case wherein the Panchayat Union Council passed a resolution suspending the levy of surcharge under the Act with effect from a particular date, it could not by a subsequent resolution on a future date cancel the earlier resolution of suspension and demand surcharge for the intermediate period. In W.P. No. 4560 of 1970 it was decided that when the tickets were not sealed by the department and therefore the proprietor did not collect the surcharge on entertainments tax, the Revenue was not entitled to such tax.
The issue involved has also been considered by the Madras High Court in W.P. No. 1597 of 1972 dated the 5th October, 1976. This is the latest decision covering the field. There the petitioner relied on rule 22 of the Tamil Nadu Entertainments Tax Rules, 1939. The court said that this rule does not lay down at all that the Entertainments Tax Officer shall verify the correctness of the entertainments tax and the surcharge as given in the tickets, that he shall put his stamp on these tickets in verification of the correctness of those amounts and that once the tickets are so stamped, the amounts shall not be called in question. All that the rule says is that the Entertainments Tax Officer shall impress with his official seal all the foils and counterfoils of the tickets sent to him by the proprietor and return the same to him. This rule does not at all deal with the contents of the tickets nor does it say that the ticket stamped indicate the amount of the entertainments tax and the surcharge respectively. In this view of the matter, it is hardly arguable that the Entertainments Tax Officer is required by the provisions of the rules to satisfy himself about such amounts and that the impression of his seal would attract a penalty thereto. It is true that under rule 27 each ticket is to carry a statement that the price marked therein include the tax. But this is a thing very different from saying that the amounts of the tax and the surcharge shall be marked on each ticket. There is no rule which enjoins upon the proprietor to state on the ticket the amounts of the tax and the surcharge. It follows that the Entertainments Tax Officer cannot be held responsible for the correctness of any such statement nor is he called upon by any provisions of the Act to make any verification thereof. The purpose of rule 22 appears merely to be an authentication of the ticket so that the proprietor may not be able to use other tickets in the course of his business and may remain restricted to the statements made in the tickets submitted by him to the Entertainments Tax Officer. The rule is thus meant to check fraud on Revenue such as may be perpetrated by the proprietor issuing tickets of a certain denomination but claiming in his tax returns that the tickets issued by him were of a lower denomination. Thus, the responsibility for charging from his customers the correct amounts of tax and surcharge due from them and paying the same to the Entertainments Tax Officer rests hundred per cent on the shoulders of the proprietor and is not in any way shared by the Entertainments Tax Officer. The court thus overruled the contentions and dismissed the petition. The ratio of this decision, which is later in point of time to those cited by the petitioner is squarely applicable to the facts of the present case. The petitioner cannot rest content on the plea that the tickets were sealed by the Entertainments Tax Officer, without the exhibition of surcharge on entertainments tax and surcharge on show tax and, therefore, the proprietor was not bound to pay the amount demanded as passed in the resolution of the Annavasal Panchayat Union. When the resolution of the Panchayat Union was duly published, that was sufficient notice and the law required nothing more for enforcing the levy on the property. The Collector has also in this case accorded permission to enhance the rate from 1st November, 1962. Therefore, there is no merit in the contentions raised by the petitioner. The petition is dismissed."
3. A reading of the above passage in the order of the Commissioner clearly shows that the point raised by the petitioner has not been met, namely, that there cannot be a single order for two continuous years. Every assessment has to be made with respect to the week in which the cinema has been shown. When this is the basis at which the assessment has to be done for the entire 2 years, there cannot be a single order passed is the main contention raised on behalf of the writ petitioner. This contention has necessarily to be upheld in view of the decision in Kamalammal v. Board of Revenue (1964) 1 MLJ 394. It was observed in that case as follows :
"The matter has to be considered only upon the language employed in section 7-A. The only ground upon which the assessing authority in this case purported to make the best judgment assessment was that on 26th March, 1960 he found certain defects in the running of the show. In the affidavit of the petitioner it has been stated that there were numerous periodical inspections on several prior occasions and that no fault had been discovered at such times. This averment has not been contradicted in the counter-affidavit filed on behalf of the respondent. If within the meaning ascribed to it by section 7-A the return for each week is a separate independent unit which has to be separately assessed, in the light of the facts alleged and not controverted, one can only imagine that during those earlier periods, no defect of any description justifying the conclusion that the returns relating thereto was incorrect or incomplete could possibly have been reached. Unless there is material in relation to a particular return that that return is incorrect or incomplete, it is not open to the assessing authority in the light of the power conferred upon him by section 7-A(3) to deal with any and every return. In that view, it follows that the order impugned was made without any jurisdiction and has to be quashed."
4. Section 3(1-A) of the Act, i.e., the Tamil Nadu Entertainments Tax Act (10 of 1939), was introduced only by Tamil Nadu Act 1 of 1974. Therefore, this section 3(1-A) of the Act cannot be said to have any retrospective effect because there was no such indication made in the enactment itself. Therefore when the assessment in the instant case is for the period 1st November, 1962 to 17th May, 1964, certainly this provision under section 3(1-A) of the Act cannot be made applicable to the facts of the present case. Under these circumstances, the order impugned is certainly against law and the ratio decidendi in Kamalammal's case (1964) 1 MLJ 394 and hence it is liable to be set aside. The writ petition is allowed. The order is quashed. As there is limitation under the Act, now this Court cannot also remit the matter back for fresh disposal in accordance with the Act then available. Under the circumstances there is no order as to costs.
5. Writ petition allowed.