Karnataka High Court
Pushpanjali Touring Talkies vs Entertainment Tax Officer on 10 April, 1996
Equivalent citations: ILR1996KAR1967
ORDER G.C. Bharuka, J.
1. Rule. Heard both the parties.
2. Petitioner is the exhibitor of cinematograph owning a theatre. He questions the validity of the order dated 4.11.1995 (Annexure-A) which has been passed under Section 6-A(3) read with Section 6-A(4) of the Karnataka Entertainment Tax Act, 1958. His objections are two fold, viz. (i) the Entertainment Tax Officer has no authority to levy health cess and (ii) the order of penalty suffers from a mistake apparent on the face of the record since it could have been only Rs. 9,726/- whereas penalty imposed is Rs. 10,712/-.
3. As per the impugned order the assessment made against the petitioner is to the following effect:
Amounts Amounts Balance
Assessed Paid Payable
_________ _________ _________
Entertainment Tax Rs. 8,596,00 Rs. 200.00 Rs. 8,396.00
Show Tax Rs. 1,840.00 Rs. 510.00 Rs. 1,330.00
Health Cess Rs. 276.00 Rs. 77.00 Rs. 199.00"
4. So far as first ground is concerned, I may notice herein the relevant provisions of the Karnataka Health Cess Act, 1962. Sections 3, 4 and Schedule A are relevant for the present purposes. These read as under :
"3. Levy of health cess:- There shall be levied and collected a health cess at the rate of (fifteen paise in the rupee on,
(i) all items of land revenue;
(ii) the items of State Revenues mentioned in Schedule A; and
(iii) the items of taxes mentioned in Schedule B levied under any law for the time being in force by a local authority.
4. Recovery of health cess:- The health cess payable under Section 3 shall be levied, assessed and recovered along with the items of land revenue, State revenue or tax on which such cess is levied, and the provisions of the law and the rules, orders and notifications made or issued thereunder for the time being in force, shall apply to the levy, assessment and recovery of the health cess as they apply in respect of levy, assessment and recovery of the said items of land revenue, State revenue or tax.
SCHEDULE A
1. XXX XXX
2. xxx xxx
3. Tax on cinematograph shows leviable by the State under Section 4 of the Mysore Entertainments Tax Act, 1958."
From a reading of the aforesaid provisions, it is clear that health cess has to be levied and recovered by the Entertainment Tax Officer in respect of the persons who are liable to pay tax under the provisions of the Entertainment Tax Act. Therefore, the first ground of attack has to be rejected out right.
5. So far as the second objection is concerned, it is based on the language employed under Section 6-A(4) of the Entertainment Tax Act which reads as under:-
"In making an assessment under Sub-section. (3), the prescribed authority may direct the proprietor to pay, in addition Jo the tax assessed, penalty not less than a sum equal to but not exceeding thrice the amount of difference between the. tax assessed and the tax paid under Sub-section (1-A) if it is satisfied that the correct amount of tax payable under Sub-section (1-A) was not paid by the proprietor either due to wilful mis-statement or suppression of facts."
6. In the present case, admittedly the difference of tax assessed and paid comes to Rs. 9,056/-. It is this amount which could have formed the basis for levying penalty under Section 6-A(4) of the Entertainment Tax Act. But though in the impugned order of penalty the assessing officer himself has observed that he proposes to levy penalty equivalent to the tax assessed which is Rs. 10,396/- but he has proceeded to levy the same at Rs. 10,712/-. The amount of penalty seems to have been computed by also including the amount of health cess being Rs. 276/-. But Section 4 of the Health Cess Act does not permit the Entertainment Tax Officer to levy penalty in respect of health cess. As such, the levy of penalty in respect of health cess cannot be sustained. Accordingly, it is held that the amount of penalty will be restricted to Rs. 10,396/- only.
7. Writ Petition is accordingly partly allowed to the said extent only. No costs.