TMI Blog2016 (9) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... Assam Act. Since in the present case, entertainment tax has been levied only on the ground that in spite of the exemption having been granted by the notification dated 29.03.2008, petitioners allegedly collected entertainment tax, the impugned orders of assessment are declared to be illegal, without jurisdiction and therefore the same are set aside and quashed. Following the above discussion and our conclusion in favour of the exhibitors on all the issues as delineated above, we declare that the demand of entertainment tax from the exhibitors for the period specified in the notification dated 29.3.2008 (Annexure-I) is illegal and therefore the assessment to tax under the Assam Act for the petitioners are quashed. The cases are allowed with this declaration. - WP(C) 4477, 4480, 3439, 3443, 3444, 3445 & 4479/2014 - - - Dated:- 2-9-2016 - Hrishikesh Roy And Paran Kumar Phukan, JJ. For the Petitioner : Dr. Ashok Saraf Sr. Adv., Mr. P. Baruah, Mr. Z. Islam For the Respondents : Mr. D. Saikia, Addl. A.G., Assam, Mr. B. Choudhury, SC, Finance Taxation JUDGMENT [ Hrishikesh Roy, J. ] Heard Dr. A. Saraf, learned Senior Counsel appearing for the petitioners in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. In response to the show cause notice, the exhibitor reiterated that they have not collected any amount towards entertainment tax and they offered to submit their Books-of-Account to support their contention. However through the assessment order dated 1.3.2013, the tax was assessed on the basis of the total turnover and interest was also added to the assessed amount. 7. Being aggrieved, the exhibitors challenged the assessment through the WP(C) No.2343/2013 and this case was disposed of by the Division Bench on 6.5.2013, by relegating the party to the statutory forum. Thereafter the appellate authority after considering the rival submission through the impugned order dated 28.7.2014 (Annexure-XXI), opined that when the tax is collected, the same should be deposited in the Govt. exchequer or else, it will amount to unjust enrichment. It was also concluded that objective of exemption by the Government was to provide relief to the movie-goers and it is impermissible for the exhibitor to retain the collected tax as this would be contrary to the judgment of the Apex Court in the State of Maharashtra vs. Swanstone Multiplex Cinema Private Ltd. reported in (2009) 8 SCC 235. On the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State exchequer. Therefore Dr. Saraf argues that it is not a case of unjust enrichment, since the charging of tax was not exempted by the Notification dated 29.3.2008 (Annexure-I). Hence the Assam situation is nothing but a business incentive for five years, for the new entrepreneurs in the field and retention of the collected sum is not unjust enrichment since this was permitted by the Govt. 12. The petitioners contend that assuming that assessment is permissible, for the petitioner M/s. PVR Ltd. (who did not realize the tax), the assessment can never be on the total turnover. But if there is any undue collection which can t be retained by the exhibitors, recovery would be permissible only through searching enquiry of each and every transaction and not through hypothetical conclusion, based upon the business turnover of the exhibitor. 13. Alternately Dr. A. Saraf argues that if charging of tax is exempted, then the amount collected by the second group can never be assessed as tax and then the recovery through assessment, is contended to be impermissible. 14. The substantial contention of the petitioners is that if the exhibitor is exempted from liability to payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitors, the same is an unjust collection. Mr. Saikia cites Jay Vee Rice General Mills vs. State of Haryana, reported in (2010) 10 SCC 687, to argue that when tax is unjustly collected, retention thereof by the agent is impermissible and the collected amount should either go back to the person from whom it was collected or it is to be surrendered to the state exchequer, as otherwise the retention by the exhibitor will amount to unjust enrichment. 20. The respondents rely upon the State of Karnataka vs. Drive-in Enterprises reported in (2001) 4 SCC 60, to contend that the levy is on the person who is entertained and therefore exemption should benefit of the person who is entertained. It is thus argued that the retention of the illegally collected entertainment tax in the hand of the exhibitor would be legally impermissible. 21. Referring to fundamental principles of interpretation of taxing statute or exemption notification, Mr. Saikia reads Oil Natural Gas Corporation Ltd. vs. Commissioner of Income Tax reported in (2015) 10 SCC 621, to contend that literal rule of interpretation must be followed without distorting the language and common sense approach in interpretation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge and the levy is on the exhibitors, the taxable event is on admission to entertainment. Hence the submission of the Revenue that tax here is on the person entertained appears to be illogical as this is not found in the charging Section 3 of the Assam Act. In the enactment we are considering, the payment is on admission to entertainment. Thus there is clear distinction in the manner, the legislative intent is expressed in the Act. The words used in the charging section doesn t say that the levy is on the person entertained and only through an interpretive exercise, the expression may be understood in that manner. But the question here is what was the intention of the law maker and whether there is any scope for an interpretative exercise. 28. In the present case, the assessing authority levied entertainment tax only on the ground that the petitioners in spite of the exemption having been granted, charged and collected entertainment tax and appropriated the same to itself. But even if the notification dated 29.03.2008 is construed to be exemption from charge and levy of entertainment tax, then also, in case any unauthorized collection was made, the assessing authority has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in the context, which warrants a deviation to avoid absurdity. But admission to entertainment is not the same as the person entertained. Hence if we construe the expression with its natural and common sense meaning, the levy is upon admittance to entertainment. Such construction does not clash in any manner even if we read the Assam Act as a whole and no incongruity or absurdity is discernible, if ordinary meaning is attributed to the expression used in the charging section. Therefore merely because entertainment tax is borne ultimately by the cine-goers will not permit us to import the words person entertained, when such words are missing in the enactment. 32. In fact if we take the analogy of other indirect taxation, the logic of the above manner of construction can be better appreciated. The charge and levy of central excise duty is on manufacturer but the tax burden is eventually borne by the consumer. Does it then mean that the charge and levy of excise tax is on the person who purchases the manufactured goods at a value which includes the component of excise duty, charged to the manufacturer. Similarly, levy of sales tax is on sale transactions but the tax is eventually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r construction of the charging section which doesn t declare that the levy on the person entertained, it will be wrong in our understanding, to import words not found in the Assam Act. 35. It is important to keep in mind that charge and levy and the incidence of taxation are conceptually different. Under the exemption notification of 29.03.2008 (Annexure-1), charge and levy is not absolved and therefore it is difficult to accept that charging of tax is exempted by the State. This indirect tax is to be borne by the cine-goers on admission to entertainment but the liability to pay the tax to the State under the Assam Act, is on the exhibitors. So when the liability from payment of tax is exempted, the benefit in our understanding, should go to the entity which is made liable to pay the tax. Merely because the tax is ultimately borne by the cine-goers, exemption is not intended for them particularly when, the notification targets those exhibitors, who commenced commercial operation between 1.4.2007 to 1.2.2008. 36. The different sections of the Assam Act must be harmoniously construed to understand the purport of the exemption notification issued under Section 8(2). The Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules are intended to support the Act and can t abrogate the Act. Therefore the argument raised to the contrary by the counsel for the revenue, is rejected. 39. Unambiguous intention is essential in fiscal statute. It is not stated anywhere in the Assam Act that the exemption benefit was intended for the cine-goers. Therefore when nothing as such is mentioned, it will be erroneous to import words to construe the exemption notification, as a benefit for the cine-goers. It can t also be overlooked that cine-goers form a class of their own without any rational differentiation between those who watch movies in normal cinema halls and those in multiplexes. But there is clear distinction between two categories of exhibitors (ordinary cinema halls and multiplexes) where the quality of entertainment, ambience and comfort provided, are surely of two levels. The exemption notification speaks of those multiplexes which commenced commercial operation in Assam on or after 1.4.2007 but prior to 1.2.2008 and they are exempted from the liability to payment of entertainment tax. Therefore it is natural to infer from the words used that, exemption is intended for the exhibitors. According to ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers under Section 3(6) of the Assam Act, the exemption notification under Section 8(2) has to be construed in our view as one, intended to provide incentives to new multiplexes established during the specified period. Therefore when charge of tax has not been exempted (since Section 8(1) notification is not issued here), the collection of tax can t be described as illegal collection. Thus retention of the collected tax (when levy is not exempted), do not amount to unjust enrichment for the exhibitors. Therefore we hold that the decision in Swanstone Multiplex (Supra) can t be applied to deny the benefit to the petitioners in the present cases. 44. Consequently the tax recovered by the exhibitors, as admitted by the 2nd group of litigants, in our view is not collected illegally and therefore we declare that they have no obligation under Section 172 of the Contract Act, to refund any entertainment tax for the exempted period. 45. As earlier noted the charge and levy of tax was never exempted and therefore the cine-goers were not provided any relief under the exemption notification. On the other hand, the exhibitor was freed of their obligation from the liability to the entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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