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M/s Surya Satellite, M/s Star Vision Cable T.V. Network Versus State of U.P. And Others

2017 (11) TMI 484 - ALLAHABAD HIGH COURT

Requirement of pre-deposit under Section 12 (3) in U.P. Entertainment and Betting Tax Act, 1979 - Held that:- Looking to the peculiar nature of the dispute and also the factum that petitioners appeal could not be entertained by appellate authority for want of compliance of Section 12 (3) and also considering interim order passed by this Court in the appeal, we provide, if petitioners have complied interim orders, appellate authority shall permit petitioners to deposit deficient one-third amount, .....

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a Mohan Shukla For the Respondent : C.S..C ORDER ( Delivered by Hon'ble Sudhir Agarwal, J. ) 1. In both these writ petitions, petitioners are challenging validity of sub-section 3 of Section 12, as inserted by U.P. Entertainment and Betting Tax (Amendment) Act, 2009 (hereinafter referred to as "Amendment Act, 2009"), in U.P. Entertainment and Betting Tax Act, 1979 (hereinafter referred to as "Act, 1979"), providing a condition for pre-deposit of one-third of disputed amou .....

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eposit of one-third of disputed amount be quashed and appellate authority be directed to decide their appeals without enforcing requirement of pre-deposit under Section 12 (3) of Act, 1979, as amended by Amendment Act, 2009. 4. Sri Devendra Mohan Shukla, learned Counsel appearing for petitioners in both the matters, contended that appeal is first stage of adjudication and has been made an ineffective remedy by providing extremely onerous, impracticable and arbitrary condition of pre-deposit of o .....

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Vs. State of Gujrat 1975 2 SCC 175; Seth Nand Lal Vs. State of Haryana 1980 (supp) SCC 574 and Mardia Chemicals Limited Vs. Union of India 2004 (4) SCC 311. Submission is that right of appeal is a part of judicial review and condition of deposit of one-third of disputed tax renders the said remedy practically impossible to Assessee and, therefore, it is violative of Article 14 of the Constitution and liable to be struck down. 5. Per contra, learned Counsel for State, contended that assessment c .....

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ell as various judicial authorities on the subject. 7. Act, 1979 has been enacted by State Legislature to consolidate and amend laws relating to tax on entertainment, amusement and on certain forms of betting in State of U.P. 8. Both petitioners are engaged in business of providing entertainment to viewers through cable connections, after subscribing Television Network Services of various broadcasters. Dispute relates to liability of entertainment tax imposed upon petitioners by order of assessm .....

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der: "12. Assessment of tax. - (1) Where the Commissioner or the District Magistrate is satisfied that the proprietor of an entertainment, - (a) has failed to give information as required under sub-section (1) of Section 5; or (b) has failed to prepare or to submit true and full returns in the [prescribed forms or does not furnish return in respect of any entertainment within the stipulated time]; or (c) possesses or has used duplicate tickets; or (d) has fraudulently evaded or attempted to .....

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such subsequent proceeding, if commenced, shall be of no effect and shall be dropped. [(1a) Any assessment made under this section shall be without prejudice to any prosecution for an offence under this Act.]" (Emphasis added) 10. Section 12 (2) provides a remedy of appeal to a person aggrieved by an order passed under Section 12 (1), before State Government, in such a manner, as may be prescribed. Sub-section (3) inserted by Amendment Act, 2009 w.e.f. 16.06.2009 provides a condition before .....

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fore considering the matter further, it would be appropriate to have an in-depth analysis of the authorities relied by learned counsel for petitioner in support of his submissions. 12. Aanant Mills Company Limited Vs. State of Gujrat (supra) is a judgment rendered by a Four Judges' Bench of Supreme Court. Cconstitutional validity of various provisions of Bombay Provincial Municipal Corporations Act (Bombay Act 59 of 1949) as amended by Gujarat Act No. 8 of 1968 and Act No. 5 of 1970 came up .....

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owed and Court directed that State Legislature had no competence under entry 49 of State List, Seventh Schedule to the Constitution, to make a law for taxing plant and machinery, and Rule 7, was held beyond Legislative Competence. Statute was again amended by insertion of Section 152 A. Then fresh assessments were made whereagainst appeals were preferred before Chief Judge of Court of Small Causes, Ahmedabad, but held not maintainable for non-deposit of tax by appellants under Section 406 (2) (e .....

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nst a tax unless amount demanded is deposited with Commissioner. However, there was a provision conferring power upon appellate Court, if in its opinion the deposit of amount by appellant will cause undue hardship, in its discretion, it could have dispensed with such deposit or part thereof, either unconditionally or subject to such condition as it may deem fit. Supreme Court held that condition of deposit of tax as a condition precedent to entertainment of appeal would not have effect nullifyin .....

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uity under Article 14 of the Constitution nor it is otherwise beyond Legislative Competence. Provision does not have the effect of making invidious distinction or creating two classes with the object of meeting out different treatment to Assessee. It only spells out consequences flowing from the omission and default of a person who despite the fact that deposit of the amount found due from him, would cause him no hardship, declines of his own volition to deposit that amount. Supreme Court furthe .....

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atutes and held that a disability or disadvantage arising out of a party's own default or omission cannot be taken as tantamount to creation of two classes, offensive to Article 14 of the Constitution, especially when that disability or disadvantage operates upon all persons who make the default or omission. It consequently upheld validity of Section 406 (2) (e) of Act, 1949. 13. In Seth Nand Lal Vs. State of Haryana (supra) there was no provision for waiver or reduction of amount of pre-dep .....

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anner as contemplated under statute and not otherwise. Right is conditional one and legislature in its wisdom has imposed that condition. No question of whittling down that right by an alteration, therefore, would arise. Court said: "Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions i .....

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ment in Shyam Kishore and others Vs. Municipal Corporation of Delhi and another 1993 (1) SCC 22, wherein vires of Section 170 (b) of Delhi Municipal Corporation Act, 1957 (hereinafter referred to as "DMC Act, 1957") was challenged on the ground that condition of pre-deposit for availing right of appeal is ultra vires of the condition. The Court examined the submission by referring to a distinction between right of suit and right of appeal. It referred to an earlier decision in Ganga Ba .....

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