TMI Blog2008 (9) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... aying tax in the manner specified in section 4A, the tax payable under this sub-section in respect of cinematograph show of a Kannada, Kodava, Konkani or Tulu film shall be at the following rates, namely —Total payment for admission of a person to the highest class of seat or accommodation Does not exceed eight rupees - Rate of tax per show will be Thirteen rupees if Exceeds eight rupees but does not exceed fifteen rupees - Twenty-five rupees if Exceeds fifteen rupees - Thirty-eight rupees The petitioners cannot even complain of act of discrimination in the present situation, particularly in respect of section 3C of the Act, providing for an exemption or concession, as the exemption provision in no way affects the petitioners who are all exhibitors of movies and who are free to choose to exhibit movies of the language of their choice. Exhibiting a movie in a language which enjoys a tax concession or tax exemption can, if at all, be to the advantage and benefit of the exhibitors and it can in no way said to be disadvantageous or even to bring about an act of discrimination against the petitioners in any manner. It is for this reason, no fault with the provisions of section 3C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate rate specified in sub-section (1) and sub-section (1A) in respect of such entertainment, 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 ticket is entitled to occupy or use; and for the purpose of this Act, the holder of such ticket shall be deemed to have been admitted on payment: Provided that where the seat or accommodation which the holder of such a ticket is entitled to occupy or use is different from the classes of seat or accommodation inside the auditorium or place of entertainment and for admission to the said seat or accommodation no payment is fixed, the holder of such ticket shall be deemed to be entitled to occupy or use the highest class of seat or accommodation and shall for purposes of this Act, be deemed to have been admitted on payment of the charges for such highest class of seat or accommodation. (3) Notwithstanding anything contained in sub-section (1A) there shall be levied and paid to the State Government on every admission made by the proprietor of an entertainment on payment as defined in sub-clause (iv-a) of clause (i) of section 2, the entertainment tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h show of a Kannada film which is a remake of a film of any other language, (i) having been remade in the State of Karnataka after a period of ten years from the date of issue of a certificate by the Central Board of Film Certification to such other language film; or (ii) which has secured a best feature film award granted by the Central Government or any State Government or has figured in the Indian Panorama section of International Film Festival and has been remade in the State of Karnataka; the rate of entertainment tax payable shall be nil. (1A) Notwithstanding anything contained in sub-section (1), where a Kannada, Kodava, Konkani, Tulu or Banjara film has secured after the first day of April, 1981, a best feature film award granted by he Central or any State Government or an internationally recognised award notified by the State Government, no entertainments tax shall be payable for a period of one year from such date as may be specified by the State Government. (2) Notwithstanding anything contained in sections 3 and 3A, in the case of a cinematograph show of a film other than a Kannada, Kodava, Konkani, Tulu or Banjara film which has secured, after the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upees exceeds fifteen rupees but does not exceed twenty rupees c. Thirty-eight rupees exceeds twenty rupees d. Forty-eight rupees Provided further that in respect of cinema theatres paying tax in the manner specified in section 4A, the tax under this section shall be paid at the following rates, namely: Sl. No. Total payment for admission of a person to the highest class of seat or accommodation Rate of tax per show a. does not exceed eight rupees Forty rupees exceeds eight rupees but does not exceed fifteen rupees b. Forty-five rupees exceeds fifteen rupees c. Fifty rupees Provided also that in respect of cinema theatres paying tax in the manner specified in section 4A, the tax payable under this sub-section in respect of cinematograph show of a Kannada, Kodava, Konkani or Tulu film shall be at the following rates, namely: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e all bad in law being unconstitutional, there is a prayer seeking for a direction to the respondents to consider the cases of the petitioners in W.P. No. 11520 of 2007, for refund of the entertainment tax and additional tax so far paid by the petitioners under sections 3, 3A of the Act. In W.P. No. 19802 of 2007, it is additionally sought for a declaration that no tax can be collected under section 3A of the Act, as there is no corresponding liability on the Kannada, Kodava, Konkani, Tulu or Banjara language films and in respect of section 4A, a declaration is sought for that the rate of tax payable under this section in respect of non-Kannada, Kodava, Konkani, Tulu or Banjara language films shall be at the same rate of tax as is in respect of Kannada, Kodava, Konkani, Tulu or Banjara language films under this section, i.e., all movies should attract tax at the same rate as is applicable to screening of Kannada, Kodava, Konkani, Tulu or Banjara language films. The petitioners have also claimed that their fundamental right for freedom of speech guaranteed under article 19(1)(a) of the Constitution of India and the fundamental rights for carrying on a profession or business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kannada language and its people; that the taxation measures are also measures which can be used to achieve social welfare objectives; that the number of persons who patronize and view Kannada films is far less compared to viewers of films produced in other languages such as Hindi, Telugu, Tamil, etc., which have a larger market territory-wise and audience number-wise and therefore making a classification between the Kannada film industry and the film industries producing movies in other languages such as Hindi, Telugu, Tamil, etc., is a reasonable classification and having the object of promoting almost a sick Kannada film industry; that the petitioners cannot complain of any act of discrimination because of such classification for the reason that there is no discrimination so far as the petitioners are concerned; that they have not faced any disadvantage visa-vis other exhibitors in comparison to whom the petitioners can be sought to be at a disadvantage; that the provisions operate uniformly on all exhibitors; that the tax which is ultimately passed on to the viewers is not even borne by the exhibitors; that the tax exemption given to regional language films is more an affirmativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the act is not free from the vice of discrimination; that the stand taken by the State to defend the statute is neither made out on facts nor tenable in law and therefore urged for allowing the writ petitions. It is on the premise of such pleadings, Sri B.G. Sridharan, learned Senior Counsel appearing for the petitioners in W.P. No. 11520 of 2007 and Sri K.V. Dhananjay, learned counsel for the petitioners in W.P. No. 19802 of 2007 have made submissions and are heard. Sri Udaya Holla, learned Advocate-General, argued on behalf of the State and its officers, defending the statutory provisions. Sri B.G. Sridharan, learned Senior Counsel, has submitted that section 3C of the Act, reducing the rate of tax in respect of Kannada, Kodava, Konkani, Tulu or Banjara films to be nil, which amounts to granting total exemption from payment of entertainment tax in respect of such films, and also section 4 of the Act, particularly the provisos which provide for a lower rate of tax in respect of movies made in languages in Kannada, Kodava, Konkani, Tulu or Banjara is also discriminatory and therefore bad in law; that the present situation is clearly covered by the ratio of the law lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s part of section 3 itself and if so read, the charging section produces an act of discrimination, as urged earlier and therefore section 3C being a separate section or in the nature of exemption cannot make much, difference to get over the allegations of discrimination and the provisions should be declared as unconstitutional and void. Sri Udaya Holla, learned Advocate-General, appearing for the State and its officers, has made valiant efforts to defend the validity of the statutory provisions. It is firstly contended that it is a well-settled principle of interpretation of the Constitution and the taxing laws that in the matter of levy of tax, the Legislature has a larger freedom to choose a specific person, place or goods, which should be brought within the net of taxation and as to who should be left out of the net of taxation and likewise, even in the matter of rates, as to who should be subjected to tax at a higher rate and who should be subjected to tax at a lower rate; that such measures are essentially within the policy domain of the State and the courts will not unduly interfere with the freedom enjoyed by the State in the matter of choosing either a subject of taxatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superiority in production, and all these things fully subserve the object of chieving the social causes even in terms of the provisions of Part IV of the Constitution of India and therefore submits that the statutory provisions are not in any way discriminatory nor do they in any way affect the rights of the petitioners guaranteed under article 14 of the Constitution of India and in this regard has placed reliance on the decisions of the Supreme Court in the case of Elel Hotels and Investments Ltd. v. Union of India [1989] 74 STC 146; [1989] 3 SCC 698 and Sri Srinivasa Theatre v. Government of Tamil Nadu [1993] 89 STC 201; [1992] 2 SCC 643. Sri Udaya Holla, has also placed reliance on the decision of the Supreme Court in the case of D.A.V. College, Bhatinda v. State of Punjab AIR 1971 SC 1731. While the general principles as they emerge from the decisions relied upon by the learned Advocate-General are well known and are not in dispute. In so far as the reliance placed on the decision of the Supreme Court in the case of D.A.V. College AIR 1971 SC 1731 is concerned, the ratio of this case is neither applicable nor does it advance the case of the State in the present situation. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se alleged an act of discrimination and the learned counsel for the petitioners submits that the matter is squarely covered by the ratio of the decision of the Supreme Court in the case of Aashirwad Films [2007] 7 VST 714; [2007] 6 SCC 624, the stand of the State is that there is a distinguishing feature in the present case and particularly as explained by the State in its counter, which was conspicuously absent in the case of Andhra Pradesh legislation and which was the main cause for frowning upon that legislation. Strong reliance is placed by the learned Advocate-General on this aspect by referring to para 25 of the judgment of the Supreme Court in the case of Aashirwad Films [2007] 7 VST 714; [2007] 6 SCC 624, which reads as under: (page 723 of VST) 25. The purported classification only on the basis of language without anything more and in particular having regard to the difference in the rate of tax, in our opinion, is ex facie arbitrary. The burden was, therefore, on the State to show that the imposition was justified. Different rates of entertainment tax had not been levied having regard to the nature of theatre, the area where they were situated or extent of occupancy, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y based on artificial barriers and language being one such barrier and the provision also should not fall foul with any other provisions of Constitution, viz., even Part IV of the Constitution, and therefore was held to be violative of article 14 of the Constitution of India is a declaration which clearly applies to the present case, as language alone is made a criterion for bringing about the distinction in levying different rates of tax. It is no doubt true that to complain an act of discrimination, the complainant should demonstrate that the complainant is put to a disadvantage vis-a-vis another person, who is not so disadvantaged or is even at an advantageous position and an act of discrimination arises only in the context of a comparative analysis of the impact of the statutory provisions on two different persons and in the instant case, the petitioners are not complaining that they are discriminated vis-a-vis any other exhibitors, who are either at an advantageous position or who are not so disadvantaged, and therefore the very concept of discrimination may not arise. This aspect does not merit further examination as the Supreme Court in a similar situation has taken the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general or in the main part of the section. Submission is that the proviso alone should be declared valid and all other parts should be declared to be unconstitutional. I am afraid this is an exercise that can be undertaken more by the Legislature and the duty of the court is only to review and declare that legislative action which is offending. When it is found that it is the proviso which constitutes the offending part, as it seeks to carve out a class of films, viz., films produced in Kannada, Kodava, Konkani, Tulu or Banjara languages in which, it either exempts or subjects to a lower rate of tax resulting in an act of discrimination, it is only this offending portion which can be declared as unconstitutional and not the main provision which is general in nature. Therefore, the provisions of section 4, which constitute a proviso in the nature of levy of a lower rate of tax in the case of Kannada, Kodava, Konkani, Tulu or Banjara films, i.e., the following portion of section 4 of the Act is declared as unconstitutional: Provided that in the case of a cinematograph show of Kannada, Kodava, Konkani or Tulu film, in addition to tax leviable under sections 3 and 3A, the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended in respect of Kannada, Kodava, Konkani, Tulu or Banjara films in this manner under the provisions of the Act can be a relevant argument, I find that the petitioners cannot even complain of act of discrimination in the present situation, particularly in respect of section 3C of the Act, providing for an exemption or concession, as the exemption provision in no way affects the petitioners who are all exhibitors of movies and who are free to choose to exhibit movies of the language of their choice. Exhibiting a movie in a language which enjoys a tax concession or tax exemption can, if at all, be to the advantage and benefit of the exhibitors and it can in no way said to be disadvantageous or even to bring about an act of discrimination against the petitioners in any manner. It is for this reason, I find no fault with the provisions of section 3C providing for special provisions in the nature of concession or exemption in the matter of exhibition of cinematograph shows of films in Kannada, Kodava, Konkani, Tulu or Banjara languages. I do not find any unconstitutionality in the provisions of section 3C as is contended by the learned counsel for the petitioners. The challenge to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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