2021 (3) TMI 30 - HC - VAT and Sales Tax

Benefit of exemption of entertainment tax - benefit of exemption is available only to the owner of a multiplex or it can be extended to a lessee as well? - HELD THAT - Indisputably an alternative remedy is available to the petitioner against the impugned order. However it is noteworthy that this petition despite availability of that remedy was entertained by this Court way back on 28.07.2014. The question involved in the present matter is legal in nature and no factual inquiry is required. In our opinion after almost six years from the date present petition was entertained it will not be proper to relegate the petitioner to avail the alternative remedy. The notification dated 07.10.2008 was issued in exercise of powers conferred by Section 7 of the Act of 1936. On the same date an executive instruction in the shape of policy (Annexure P/2) was issued clauses of which were heavily relied upon by Shri Bhargava. Indisputably neither the notification dated 07.10.2008 nor the policy which is issued as executive fiat contains any definition of proprietor (Lokeh). Thus to ascertain the meaning and definition of proprietor the Court needs to look into the definition clause contained in the Act of 1936 namely; Section 2(f). In the considered opinion of this Court if present petitioner is covered by definition of 2(f) he can certainly claim the benefit of exemption. The reason for depriving the petitioner from the benefit of exemption is that in the exemption order the name of M/s Satyam Cineplexes does not find place or the exemption certificate is not a certificate in favour of M/s Satyam Cineplexes Ltd. This finding is factually incorrect. The relevant portion of exemption order dated 16.03.2012 Annexure P/12 reproduced hereinabove leaves no room for any doubt that exemption was indeed issued in favour of M/s Satyam Cineplexes Ltd. Pertinently the impugned order dated 05.05.2014 does not contain any opinion of the Commercial Tax Officer that petitioner being a lessee is not entitled to get exemption and such benefit is confined to proprietor/swami only. The only reason assigned is that the exemption notification/certificate was not issued in favour of M/s Satyam Cineplexes Ltd. This is trite law that validity of an order of a statutory authority must be judged on the basis of grounds mentioned therein and it cannot be supported by assigning different reasons in the Court by filing counter affidavit. The petitioner/lessee is entitled to get the benefit of exemption of Entertainment Tax as per law - Petition allowed.

Summary

Issues Involved:
1. Whether the benefit of exemption of entertainment tax is available only to the owner of a multiplex or can it be extended to a lessee as well?
2. The interpretation and applicability of the exemption notification and relevant statutory provisions.
3. The question of availability of alternative remedy and whether the petitioner should be relegated to avail such remedy.

Issue-wise Detailed Analysis:

1. Availability of Entertainment Tax Exemption to Lessee:
The core issue in this case is whether the benefit of entertainment tax exemption, as per the government policy, is restricted to the owner of a multiplex or if it can also be extended to a lessee. The petitioner, a limited company engaged in exhibiting feature films, sought exemption under a policy introduced by the Government of Madhya Pradesh aimed at promoting multiplex complexes. The petitioner argued that the exemption notification should apply to 'entertainment' rather than 'owner,' and that the definition of 'proprietor' under Section 2(f) of the M.P. Entertainment Duty and Advertisement Tax Act, 1936 (Act of 1936) is broad enough to include a lessee.

The court noted that the definition of 'proprietor' in the Act of 1936 includes any person responsible for or in charge of the management of the entertainment. The court also referred to a Division Bench judgment of the Chhattisgarh High Court, which held that the term 'swami' (owner) includes the occupier or lessee of the multiplex, thus entitling them to the exemption.

2. Interpretation of Exemption Notification and Statutory Provisions:
The petitioner relied on the notification dated 07/10/2008 issued under the Act of 1936, which granted a five-year exemption from entertainment tax to multiplexes. The court emphasized that the definition of 'proprietor' under Section 2(f) of the Act of 1936 is inclusive and broad, covering any person responsible for the management of the entertainment, including lessees.

The court also highlighted that the exemption notification and policy did not define 'proprietor' or 'owner,' and thus the statutory definition should prevail. The court rejected the respondent's argument that the exemption should be strictly interpreted to favor the revenue, citing the broader legislative intent and the purpose of the exemption policy.

3. Availability of Alternative Remedy:
The respondent argued that the petitioner had an alternative remedy against the impugned order and should be relegated to avail it. However, the court noted that the petition had been entertained for almost six years, and the issue was purely legal, requiring no factual inquiry. Citing previous judgments, the court decided not to relegate the petitioner to the alternative remedy, emphasizing the need to address the legal question directly.

Conclusion:
The court concluded that the petitioner, as a lessee, is entitled to the benefit of entertainment tax exemption. The impugned order dated 05/05/2014, which denied the exemption on the ground that the exemption certificate was not issued in the name of the petitioner, was factually incorrect and legally unsustainable. The court set aside the impugned order and allowed the petition, granting the petitioner the benefit of exemption as per law.