Madras High Court
K.S. Anandan vs Deputy Commercial Tax Officer, Ponneri ... on 28 March, 1988
Equivalent citations: (1988)IMLJ327, [1989]74STC21(MAD)
ORDER Swamikkannu, J.
1. The only point that arises for deep consideration in the instant case is, the interpretation of section 4 together with section 5-B(2) available in the Tamil Nadu Entertainments Tax Act, 1939 (hereinafter referred to as "the Act").
2. Section 4 of the Act reads as follows :
"Tax on payment for admission to entertainments. - (1) On each payment for admission to any entertainment, there shall be levied and paid to the (State) Government (except as otherwise expressly provided in this Act), a tax (hereinafter referred to as the entertainments tax) calculated at the following rates, namely :-
Rate of tax Where such payment (inclusive of the amount of the tax) -
(i) is not more than (thirty paise) One-fourth of such payment.
(ii) is more than (thirty paise) but is One-third of such payment. not more than (one rupee and fifty paise)
(iii) is more than (one rupee and fifty Two-fifths of such payment. paise).
Provided that in the case of cinematograph exhibitions, the tax shall be calculated at the rates specified above on each payment for admission, after excluding from such payment the amount of the tax :
(......) (1-A) Notwithstanding anything contained in sub-section (1), there shall be levied and paid to the State Government (except as otherwise expressly provided in this Act), on every taxable complimentary ticket entertainments tax at the appropriate rate specified in sub-section (1), as if full payment had been made for admission to the entertainment according to the class of seat or accommodation which the holder of such taxable complimentary ticket is entitled to occupy or use; and for the purposes of this Act, and the Tamil Nadu Local Authorities Finance Act, 1961 (Tamil Nadu Act 52 of 1961), the holder of such taxable complimentary ticket shall be deemed to have been admitted on payment.
(2) In the determination of the amount of tax payable on each payment for admission under sub-section (1) [or under sub-section (1-A) fractions of a (......) paisa less than half a (.....) paisa shall be disregarded and fractions of a (.....) paisa equal to or exceeding half a (.....) paisa shall be regarded as one (.....) paisa]."
3. Section 5-B of the Act is as follows :
"Option to pay. - (1) In lieu of the tax payable under section 5-A, in the case of cinematograph exhibitions held in the theatre specified in column (2) of the Table below and located in the local areas specified in the corresponding entry in column (1) of the said Table, the proprietor of such cinematograph exhibition may, at his option and subject to such conditions as may be prescribed, pay the amount of tax to the State Government every week as specified in the corresponding entry in column (3) thereof.
THE TABLE
...... ....... ........
(2) The amount of tax referred to in sub-section (1) shall be payable by the proprietor, irrespective of the actual number of shows held by him in a week."
4. Relying on the word "admission" available in section 4 of the Act, Mr. R. D. Indrasenan, learned counsel for the petitioner, submits that the liability to pay tax even under section 5-B(2) of the Act arises only if there had been conduct of shows in the cinema theatre. In the instant case, it is common ground that there had been no shows on the following days : Weeks ending 25th November, 1979, 2nd December, 1979, 16th December, 1979, 27th January, 1980, 1st June, 1980, 7th September, 1980, 2nd November, 1980, 16th November, 1980, 7th December, 1980 and 22nd March, 1981. There had been no show due to heavy rains, current failure and also due to suspension of the licence by the Collector of Chengalpattu district at Kancheepuram in his RC. No. 199753/80, M5, dated 26th February, 1981, from 15th March, 1981 to 22nd March, 1981 for want of audience as per the entries made in the form II returns.
5. It is stated in paragraph 5 of the counter-affidavit that according to section 5-B(2) of the Act, compounded tax is payable by the petitioner irrespective of the actual number of shows held by him in a week and that there was no provision in the Act then that the tax need not be paid when no shows were conducted during a whole week. This contention is attacked by the learned counsel for the petitioner, Mr. R. D. Indrasenan, that the said observation is not in accordance with the concept underlying in section 4 of the Act. The said section contemplates that there should be admission to any entertainment, so as to attract the imposition of tax. It is only on each payment for admission to any entertainment, there shall be levied and paid to the Act, a tax calculated on the basis of the rate of tax specified under section 4 of the Act. Thus, a close reading of the provisions of section 4 clearly shows that there should be a show of entertainment wherein the customers are allowed inside the auditorium to see the cinema by paying the charge specified in the ticket that is issued to them, which includes also the entertainment tax. In other words, it is the cinema-goers who pay the tax and the owner of the theatre collects the tax by issuing tickets to the customers, only as collecting agents. The owner of the theatre has to collect and pay what had been collected every week by way of entertainment tax.
6. In the instant case, Mr. R. Lokapriya, learned Government Advocate (Taxes), would vehemently contend that the petitioner has opted as an assessee under section 5-B of the Act and as such it is not open to him to raise such a contention. This contention is untenable because section 5-B is subject to section 4 of the Act. Under section 4 of the Act, it is only when admission or permission to a person who seeks entertainment by entering into the auditorium by paying the charge in the ticket, which includes the entertainment tax, the collection of the tax from the cinema theatre owner comes in. This view adopted in the argument on behalf of the petitioner can be sustained, since it is reasonable and is also in accordance with the provisions of section 4 as well as section 5-B of the Act.
7. Therefore, the writ petition has to be allowed and is hereby allowed. Under the circumstances, there is no order as to costs.
8. It is submitted that by virtue of the order made in W.M.P. No. 9400 of 1981, the petitioner has paid the tax. Since this Court has now held that no tax is liable to be paid by the petitioner herein by virtue of the general definition of section 4 of the Act, for the admission of the customers into the auditorium of a theatre, this Court directs refund of the said amount so paid to the petitioner within two months from this date.
9. Writ petition allowed.