TMI Blog1993 (5) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... AND AGRAWAL S.C. JJ. Civil Appeal No. 1527 of 1986, S.L.P. (C) No. 3127 of 1985, C.A. Nos. 4642, C.A. Nos. 4643, C.A. Nos. 4644, C.A. Nos. 4645, C.A. Nos. 4646, C.A. Nos. 4647 of 1984, C.A. Nos. 193, C.A. Nos. 194, C.A. Nos. 195, C.A. Nos. 196, C.A. Nos. 197, C.A. Nos. 198, C.A. Nos. 199, C.A. Nos. 200, C.A. Nos. 201, C.A. Nos. 202, C.A. Nos. 203, C.A. Nos. 204, C.A. Nos. 205, C.A. Nos. 206, C.A. Nos. 207, C.A. Nos. 208, C.A. Nos. 209, C.A. Nos. 210, C.A. Nos. 211, C.A. Nos. 212, C.A. Nos. 213, C.A. Nos. 214, C.A. Nos. 215, C.A. Nos. 216, C.A. Nos. 217, C.A. Nos. 218, C.A. Nos. 219, C.A. Nos. 220, C.A. Nos. 221, C.A. Nos. 222, C.A. Nos. 223, C.A. Nos. 224, C.A. Nos. 225, C.A. Nos. 226, C.A. Nos. 227, C.A. Nos. 228, C.A. Nos. 229, C.A. Nos. 232, C.A. Nos. 233, C.A. Nos. 234, C.A. Nos. 1468, C.A. Nos. 1469, C.A. Nos. 1470, C.A. Nos. 5722 of 1985, C.A. Nos. 4798 of 1989, C.A. Nos. 1858 of 1992 decided on May 10, 1993 A.K. Ganguly, Senior Advocate, M.B. Shetye, A. Subha Rao, B. Kanta Rao, T.V.S.N. Chari, Ms. Bharathi Reddy and Ms. Promila, Advocates with him, for the apperaing parties. -------------------------------------------------- The judgment of the Court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross collection capacity per show for the fixed rounds of shows for the whole year and the number of shows was fixed on the basis of the number of shows exhibited in the previous year. This arrangement continued till December 31, 1983, whereafter the provisions of sections 4, 4-A and 5 were amended by Act No. 24 of 1984. The provisions of sections 4, 4-A and 5, as amended by Act 24 of 1984, were as follows: "Section 4(1). There shall be levied and paid to the State Government a tax on the gross collection capacity on every show (hereinafter referred to as the entertainments tax) in respect of entertainments held in the theatres 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, calculated at the rates specified in the corresponding entry in column (3) thereof. THE TABLE Local area Theatre Rate of tax on the gross collection capacity per show (1) (2) (3) (a) Municipal corporations and the Secunderabad cantonment area and the contiguous area of two kilometres thereof. (i) Air-conditioned (ii) Air-cooled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipal corporations and the Secunderabad cantonment area and the contiguous area of two kilometres thereof. Six rupees (b) Selection grade, special grade and the first grade municipalities and the contiguous area of two kilometres thereof. Six rupees (c) Second grade and third grade municipalities and the contiguous area of two kilometres thereof. Four rupees (d) Gram panchayats, selection grade gram panchayats, town-ships and any other local areas. Two rupees (2) The tax leviable under sub-section (1) shall be recoverable from the proprietor. (3) The provisions of this Act other than sections 4, 6 and 13 shall, so far as may be, apply in relation to the tax payable under sub-section (1) as they apply in relation to the tax payable under section 4." "Section 5(1). In lieu of the tax payable under section 4, in the case of the entertainments held in the theatres 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 thereof may, at his option and subject to such conditions as may be prescribed, pay the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thereof. All categories 15 per cent of the gross collection capacity per show multiplied by 17. (g) Gram panchayats selection grade gram panchayats, townships and any other local areas. (i) Permanent and semi-permanent 15 per cent of the gross collection capacity per show multiplied by 14. (ii) Touring and temporary 14 per cent of the gross collection capacity per show multiplied by 7. Explanation .-For the purposes of computing the gross collection capacity per show in respect of any place of entertainment, the maximum seating capacity or accommodation and the maximum rate of payment for admission determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1955, as on the date when the proprietor is permitted to pay tax under this section shall be taken into account. (2) The amount of tax under sub-section (1) shall be payable by the proprietor irrespective of the actual number of shows held by him in a week. (3) Any proprietor who opts to pay tax under this section shall apply in the prescribed form to the prescribed authority to he permitted to pay the tax under this section. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt including touring and temporary theatres. In the explanation to sub-section (1) of section 4, the term "gross collection capacity per show" was defined in the same terms as in the explanation to section 4-C, to mean the full collection per show if all the seats in the theatre are occupied. In sub-section (2) of section 4, it was specifically provided that the amount of tax under sub-section (1) shall be payable by the proprietor on the actual number of shows held by him in a week. Section 5 gave an option to the proprietor to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the said amount was fixed on the basis of the prescribed number of shows per week. The number of shows varied with the nature of the theatre as well as the category of the local area in which it was situate. In section 4-A, a fixed amount was leviable by way of show tax on each show. A number of writ petitions were filed in the High Court to challenge the validity of sections 4, 4-A and 5 of the Act, as amended by Act 24 of 1984. The said writ petitions were decided by a Division Bench of the High Court by judgment dated July 19, 1984 Reported as Alankar Theatre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The High Court also observed that since it was not possible to predicate absolute equality between two theatres, and also because the situation and economics of each theatre are different, it is impossible to expect, or call upon the Legislature to evolve such classification which would meet every conceivable case and which would not result in prejudice even to a single theatre. It was observed that different rates have been prescribed for different local areas and for different types of theatres, i.e., ordinary, air-cooled and air-conditioned and the Legislature took note of the fact that the rate of occupancy in villages will be lower compared to towns, and similarly, in bigger towns there will be greater rate of occupancy, and finally in cities, the rate of occupancy would be even higher and it could not be said that this expectation was unrealistic, or so unreasonable as to call for interference by the court. As regards the challenge based on article 19(1)(g), the High Court has taken note of the letter dated July 26, 1983, addressed by the Andhra Pradesh Film Chamber of Commerce, to the honourable Chief Minister of Andhra Pradesh wherein the exhibitors not only asked for int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been filed against the said decision of the High Court dated July 19, 1984. C.A. Nos. 5722 of 1985, 1527 of 1986, and SLP(C) No. 3127 of 1985 have been filed against the decision of the High Court dated August 7, 1984 which is based on the earlier decision dated July 19, 1984See [1991] 82 STC 417 (AP)., and similarly C.A. Nos. 1858 of 1992 and 4798 of 1989 are directed against the decisions dated February 12, 1986 and March 30, 1989, based on the earlier decision dated July 19, 1984 See [1991] 82 STC 417 (AP). During the pendency of these appeals, the Act was amended by A.P. Act 23 of 1988 and A.P. Act 16 of 1991 whereby the Tables below sections 4, 4-A and 5 were substituted and sub-section (6-A) was inserted in section 5 whereby provision was made for reduction of the amount of tax payable by the proprietor during the financial year if there is a reduction in the seating capacity or in the accommodation of the place of entertainment at any time during the period of six months commencing from the 1st day of April and ending with 30th day of September or from the 1st day of October and ending with 31st day of March of any financial year. The learned counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have said, contemplates a law with respect to these matters regarded as objects and a law which imposes tax on the act of entertaining is within the entry whether it falls on the giver or the receiver of that entertainment." (page 69) In that case, the Cantonment Board had imposed entertainment tax of Rs. 10 per show on the cinema houses of the appellant in the said appeal and Rs. 5 per show on others. Upholding the said imposition this Court has held: ".......... It is a tax imposed on every show, that is to say, on every instance of the exercise of a particular trade, calling or employment. If there is no show, there is no tax..... The impugned tax is a tax on the act of entertainment resulting in a show." (pages 69-70) Similarly, in Y.V. Srinivasamurthy v. State of Mysore AIR 1959 SC 894, upholding the provisions of the Mysore Cinematograph Shows Tax Act, 1951, enacted under the Constitution, which authorised levy of tax on cinematograph shows at rates prescribed in a rising scale according to the seating accommodation and the cities where the cinematograph show was held, this Court following the decision in Western India Theatres case [1959] Supp 2 SCR 63 held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of payments for admission, would not, in our opinion, alter the nature of the tax or the subject- matter of the tax which continues to be a tax on entertainment. The mode of levy based on "per payment for admission" prescribed under section 4(1) prior to amendment by Act 24 of 1984 necessitated enquiry into the number of shows held at the theatre and the number of persons admitted to a cinema theatre for each show and gave room for abuse both on the part of proprietor as well as other officers incharge of assessment and collection of tax. The mode of levy or measure of the tax prescribed under section 4(1), as substituted by Act 24 of 1984, is a more convenient mode of levy of the tax inasmuch as it dispenses with the need to verify or enquire into the number of persons admitted to each show and to verify the correctness or otherwise of the returns submitted by the proprietor containing the number of persons admitted to each show and the amount of tax collected. Prior to the enactment of Act 24 of 1984, tax was leviable on the basis of either of the two modes under section 4(1) and 4-C. On an examination of the rates prescribed under both the modes, the High Court found that u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the principle that discrimination would result if unequals are treated equally and reliance is placed on the decision of this Court in Kunnathat Thathunni Moopil Nair v. State of Kerala [1961] 3 SCR 77. It has been urged that under section 4, as substituted by Act 24 of 1984, a uniform rate has been prescribed for cinema theatres of a particular class situate in different parts of the same local area although the average rate of occupancy in the cinema theatres located in different parts of the same local area is not the same and a cinema theatre which is located in the central part of the local area would have better rate of occupancy as compared to a theatre located in a remote part and further that the occupancy in the theatre depends on various other factors which have not been taken into account. We find it difficult to accept this contention. Article 14 enjoins the State not to deny to any person equality before the law or the equal protection of the laws. The phrase "equality before the law" contains the declaration of equality of the civil rights of all persons within the territories of India. It is a basic principle of republicanism. The phrase "equal protection of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. v. State of Rajasthan [1993] 88 STC 204 (SC) at page 236; [1993] 1 SCC 364 at page 397]. Reference, in this context, may also be made to the decision of the U.S. Supreme Court in San Antonio Independent School District v. Rodrigues [1973] 411 US 1 at page 41, wherein Justice Stewart, speaking for the majority has observed: "No scheme of taxation, whether the tax is imposed on property, income or purchases of goods and services, has yet been devised which is free of all discriminatory impact. In such a complex arena in which no perfect alternatives exist, the court does well not to impose too rigorous a standard of scrutiny lest all local fiscal schemes become subjects of criticism under the equal protection clause." Just as a difference in the treatment of persons similarly situate leads to discrimination, so also discrimination can arise if persons who are unequals, i.e., differently placed, are treated similarly. In such a case failure on the part of the Legislature to classify the persons who are dissimilar in separate categories and applying the same law, irrespective of the differences, brings about the same consequence as in a case where the law makes a distinctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Kerala [1970] 3 SCR 383, wherein tax at a uniform rate was imposed on plantations. Hidayatullah, C.J., speaking for the majority, while upholding the tax, has observed: "......... It may also be conceded that the uniform tax falls more heavily on some plantations than on others because the profits are widely discrepant. But does that involve a discrimination? If the answer be in the affirmative hardly any tax direct or indirect would escape the same censure for taxes touch purses of different lengths and the very uniformity of the tax and its equal treatment would become its undoing. The rich and the poor pay the same taxes irrespective of their incomes in many instances such as the sales tax and the profession tax, etc." (pages 389-390) It was further observed: "..............The burden is on a person complaining of discrimination. The burden is proving not possible 'inequality' but hostile 'unequal' treatment. This is more so when uniform taxes are levied. It is not proved to us how the different plantations can be said to be 'hostilely or unequally' treated. A uniform wheel tax on cars does not take into account the value of the car, the mileage it runs, or in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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