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1971 (1) TMI 115 - SUPREME COURT

1971 (1) TMI 115 - SUPREME COURT - [1971] 1 SCC 471 - Civil Appeals Nos. 416 to 426 of 1967 - Dated:- 21-1-1971 - J. C. SHAH, C.J., K. S. HEGDE AND A. N. GROVER, JJ. S.T. Desai, 1. N. Shroff and M. N. Shroff for the Appellants C.K. Daphtary, K. L. Hathi, B. D. Sharma for S. P. Nayar, for the Respondents. JUDGMENT: The Judgment of the Court was delivered by Shah, C. J.-Under the Bombay Entertainments Duty Act 1 of 1923 entertainment duty is chargeable on the total collections from the visitors to .....

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ot;the duty (entertainment duty) is a percentage of the payment for admission i.e. the amount which a person pays for being admitted to witness the entertainment, inclusive of the various items mentioned in clause (b) of section 2 of the Bombay Entertainment Duty Act, 1923. The amount which a person pays includes both sums-(i) what the Manager has to pay by way of duty; and (ii) what the Manager can retain as Net receipts' and hence the duty has to be charged on the total amount payable by t .....

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sed upon the visitor to the theatre, and that the proprietor of the theatre is merely an agent of the Government for collecting the duty : and that the proprietor has under the Act to pay the duty which he collects from the visitors; and that he cannot be required to pay an amount which he does not collect from the visitors. The High Court rejected the petitions and against the order of the High Court this appeal has been preferred. The Act and the Rules framed thereunder prescribe the method of .....

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th the proprietor. Under the memorandum issued on January 11, 1962, the duty payable to the Government was calculated at the appropriate rate applicable to the aggregate of the net value of the ticket and the duty paid by the visitor. In consequence of the notification the proprietor could collect from the visitor the amount shown as entertainment duty on the ticket but he was obliged to pay duty equal to the amount computed on the total amount paid by the visitor at the appropriate rate. The di .....

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duty" at the following rate- (a)* * * (b) in any other case- 11. in any other area- (i)out of the first 100 naye paise of payment for ad- 30 per cent of such mission payment. (ii)out of the next too naye paise of payment for ad- 45 per cent of such mission payment. (iii)out of the balance of the total payment for ad- 60 per cent of such mission payment. (1 A) (2)Where the payment for admission to an entertainment is made by means of a lump sum paid as a subscription or contribution to any .....

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By that section entertainment duty at the appropriate rates prescribed under s. 3 is payable 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 shall, be deemed to have been admitted for payment for the purpose of the Act. Section 4 provides for-the method of levy of duty. It provides, insofar as it is relevant : " (1) Save as otherwise provided by this Act, no person other than a person who h .....

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rietor on such conditions as the State Government may prescribe to pay the amount of the duty due- (a) by a consolidated payment of a percentage to be fixed by the (State Government) of the gross sum received by the proprietor on account of payments for admission to the entertainment and on account of the duty; (b) in accordance with returns of the payments for admission to the entertainment and on account of the duty; (c) in accordance with the results recorded by any mechanical contrivance whi .....

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or payment. A cinematograph show is "entertainment" within the meaning of the Act. Section 2(b) defines "payment for admission" as including- (ii) any payment for seats or other accommodation in a place of entertainment. (iv) any payment for any purpose whatsoever connected with an entertainment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment;" .....

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(a), (b) & (c) of sub-clause (2) of s. 4. He is permitted by the Act to collect entertainment duty on the net amount receivable by him, but he does not on that account become an agent for the Government. The charge is by s. 3 on payments received by the proprietor for admitting visitors to entertainment. Even where a ticket is not issued for an individual show but payment is received "by means of a lump sum" as subscription or contribution to any society, or by. season ticket or f .....

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ent. These provisions leave no room for doubt that liability for payment of the duty is imposed upon the proprietor and not upon the visitors to the theatre. Under s. 4(1) on the ticket for admission to any entertainment, an impressed, embossed, engraved or adhesive stamp (.not before used) issued by the State Government of the value specified. in s. 3 must be affixed. The price which the visitor pays for a ticket for admission to 'an entertainment is the value of the stamp affixed and the n .....

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every dutiable ticket, not being a complimentary ticket, issued on payment for admission to entertainment shall be in three parts. One part shall remain on the ticket book and the remaining two parts shall be detached therefrom and issued to the purchaser. Every dutiable ticket shall have each part clearly marked with the price of admission. and with the date and show for which it is available and also with the book number and the serial numbers and shall also have securely affixed to it a stamp .....

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ecify on the ticket the amount chargeable by him to the visitor and the duty in respect of which the stamp has been affixed. Rule 7 cannot operate to modify the charging section 3, nor section 4 relating to the method of levy. Rule; 15 and 23 which are referred to in r. 7 also do not support the submission made by counsel for the appellant. Rule 15 deals with unstamped tickets and r. 23 deals with the form of exemption granted by the District Magistrate or the Commissioner of Police. Rule 16 imp .....

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and the amount of duty payable to the State Government. Under section 4(2) (a) the consolidated payment is a percentage of the gross sum (.not charge and the entertainment duty) received by the proprietor on account of payments for admission to the entertainment. That duty is charged under s. 4 (2) (b) in accordance with the returns relating to the payments for admission to the entertainment, under r. 16 the duty is again chargeable on the gross amount received by the proprietor. The definition .....

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such a payment the visitor cannot be admitted to the entertainment under s. 4(1) of the Act. That being so the expression "payment for admission" includes entertainment duty. We agree with the High Court that the appellant was liable to pay duty computed in the manner provided by S. 3 ( 1 ) (b) (ii) on the total amount received by the proprietor. But the method of levy of entertainment duty from the proprietors involves some hardship. It is implicit in the Act that the proprietor is e .....

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