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2010 (3) TMI 999 - ALLAHABAD HIGH COURTWhether Section 11 of the 1979 Act gives power to the State Government to exempt any entertainment or class of entertainments from liability to pay tax under the said Act? Held that:- Proviso to sub-section (3) of section 11 of the 1979 Act, inter alia, provides that "the State Government may cancel such exemption if it is satisfied that . . . the proprietor of such entertainment has failed to comply with any of the terms or conditions imposed or directions issued in this behalf and thereafter the proprietor shall be liable to pay the tax which would have been payable had not the entertainment been so exempted". As considered in detail above, the word "proprietor" as used at two places in the above proviso has the same meaning as in section 3 of the 1979 Act, i.e., the cinema hall owner/licensee. Therefore, irrespective of the fact that the violation of the terms and conditions has been committed by the distributor or the producer of the film, the failure to comply with the terms and conditions would be attributed to the proprietor, i.e., the cinema hall owners/licensees, and the cinema hall owners/licensees would be liable to pay the entertainment tax for the period of exemption. Even if the liability to pay entertainment tax as contemplated in the proviso to sub-section (3) of section 11 may be imposed on the producer and/or the distributor as they are also covered within the meaning of the word "proprietor", still it was open to the State Government to fix the liability on the cinema hall owner/ licensee, who is also covered within the meaning of the word "proprietor ".This is what has been done by the State Government while granting exemption by the Government order dated October 16, 2003 by including clause (3) in the said Government order wherein it was, inter alia, provided that in case of violation of any of the conditions contained in the said Government order, the entertainment tax would be imposed and realized in accordance with the Rules from the concerned cinema halls in respect of the entertainment tax exempted exhibition. W.P. dismissed.
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