LIBERTY TALKIES Vs. STATE OF GUJARAT
HIGH COURT OF GUJARAT
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N.G.SHELAT, P.N.BHAGWATI -
(1.) A short question of considerable importance relating to the construction of the Bombay Entertainments Duty Act 1923 arises in the present petitions. The petitions are twelve in number and facts giving rise to the petitions are for all practical purposes identical barring only the difference in the amounts of entertainments duty demanded by the Collector and the periods for which they are so demanded. It will therefore be sufficient to state the facts of Petition No. 595 of 1962 in so far as they bear upon the question in controversy in the present petitions. The petitioners are proprietors of a Cinema Theatre in the town of Junagadh and they carry on business of exhibiting motion pictures at the said theatre. Prior to 30th April 1960 the entertainments duty was charged by applying the statutory percentage to the total amount received by the petitioners from the cinema-goers both in respect of admission to the cinema theatre as also on account of entertainments duty. As a result of a circular issued by the Collector on 19th March 1960 the entertainments duty was levied from and after 30th April 1960 by applying the statutory percentage only to the amount received by the petitioners from the cinema-goers for admission to the cinema theatre without taking into account the amount collected on account of entertainments duty. This state of affairs continued until 11th January 1962 when the Government of Gujarat issued a Memorandum pointing out that the method that was being followed by the Collector was wrong and that the entertainments duty was leviable on the total amount received by the petitioners from the cinema-goers inclusive of the amount collected on account of entertainments duty. The result was that from 31st January 1462 the Mamlatdar insisted that the entertainments duty was leviable on the total amount received by the petitioners from the cinema-goers and since then the petitioners have been paying entertainments duty on the basis that it is leviable on the total amount received from the cinema-goers. The Mamlatdar also in pursuance of the memorandum of the Government demanded from the petitioners a sum of Rs. 18 215.59 ps. being the difference in the amount of entertainments duty actually paid by the petitioners and the amount of entertainments duty leviable on the basis of the vies set out in the Government Memorandum The petitioners thereupon preferred the present petition challenging the correctness of the view taken in the Government Memorandum as also the validity of the notice issued by the Mamlatdar demanding payment of the sum of Rs. 18 215.59 ps. from the petitioners. Similar petitions were also filed by the proprietors of other cinema-theatres. These petitions raise a common question of law relating to the interpretation of the provisions of the Bombay Entertainments Duty Act 1923 and the question is whether on a true construction of the said provisions the entertainments duty is leviable only on the amount charged by the petitioners specifically for admission to the cinema-theatre or it is leviable also on the amount collected by the petitioners on account of entertainments duty.
(2.) In order to arrive at a proper determination of this question it is necessary to understand the scheme of the Bombay Entertainments Duty Act 1923 The Act as the preamble shows was enacted to provide for the levy of a duty in respect of admission to entertainments. Sec. 2 clause (a) defines entertainment to include any exhibition performance amusement game or sport to which persons are admitted for payment and the exhibition of motion pictures in the cinema theatre of the petitioners was admittedly an entertainment within the meaning of this definition. Sec. 2 clause (b) gives an inclusive definition of payment for admission in the following terms :
(b). payment for admission includes-
(i) any payment made by a person who having been admitted to one part of a place of entertainment is subsequently admitted to another part thereof for admission to which a payment involving duty or more duty is required
(ii) any payment for seats or other accommodation in a place of entertainment
(iii) any payment for a programme of synopsis of an entertainment
(iii-a) any payment made for the loan or use of any instrument or contrivance which enables a person to get a normal or better view or hearing of the entertainment which. without the aid of such instrument or contrivance such person would not get; and
(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: Proprietor in relation to any entertainment is defined in sec. 2 clause(c) to include any person responsible for or for the time being in charge of the management thereof. Then comes sec. 3 which is the charging section and it provides for the levy of entertainments duty in the following terms :
3 (1) There shall be levied and paid to the State Government on all payments for admission to any entertainment a duty (hereinafter referred to as entertainments duty) at the following rate. namely :- (a) Where the payment excluding the amount of duty is made for admission to a race-course licensed under the Bombay Race-Courses Licensing Act 1912 371 per cent of such payment and (b) in any other case - (1) within the limits of the cities and cantonments of Ahmedabad Surat Baroda Bhavnagar Rajkot and Jamnagar if the payment for admission (i) does not exceed 40 naye paise 25 per cent of such payment; (ii) exceeds 40 naye paise but does not exceed one rupee and forty naye paise 30 per cent of such payment; (iii) exceeds one rupee and forty naye paise but does not exceed three rupees 40 per cent of such payment; (iv) exceeds three rupees 50 per cent of such payment; and xxx xxx xxx xxx xxx xxx xxx It may be pointed out at this stage that prior to the amendment made by Bombay Act 53 of 1956 sec. 3(1) did not contain clauses (d) and (b) but instead thereof there was the following provision prescribing the rate of duty :
Where the payment excluding the amount of duty is made for admission to a racecourse licensed under the Bombay Race-Courses Licensing Act 1912 25 per cent of such payment and in any other case Where the payment excluding the amount of the duty-
(i) does not exceed four annas one anna. xxx xxx xxx xxx xxx xxx xxx (viii) exceeds ten rupees for every five rupees or part therof in excess of the first ten rupees in addition to the payment of ten rupees. two rupees. Section 3A which was introduced by Bombay Act 38 of 1950 provides for the levy of a duty on complimentary ticket issued by the proprietor by enacting that there shall be levied and paid to the State Government on every complimentary ticket issued by the proprietor the entertainments duty at the appropriate rate prescribed under sec. 3 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 the holder of such ticket shall be deemed to have been admitted for payment for the purposes of the Act. The method of levying the entertainments duty is prescribed by sec. 4 and the section provides
4 (1) Save as otherwise provided by this Act no person other than a person who has to perform some duty in connection with an entertainment or a duty imposed upon him by any law shall be admitted to any entertainment except with a ticket stamped with an impressed embosed issued by the State Government for the purposes of revenue and denoting that the proper entertainments duty has been paid.
(2) The State Government may on the application of a proprietor of any entertainment in respect of which the entertainments duty is payable under sec. 3 allow the proprietor 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 which automatically registers the number of persons admitted.
(3) The provisions of sub-sec. (1) of this section and of sec. 5 shall not apply to any entertainment in respect of which the duty due is payable in accordance with the provisions of sub-sec. (2). Sec. 5 declares that if any person is admitted to any place of entertainment and the provisions of sec. 4 are not complied with the proprietor of the entertainment to which such person is admitted shall on conviction before a Magistrate be liable in respect of each offence to a fine which may extend to rupees five hundred and shall be liable to pay any duty which should have been paid. Sec. 6(2) provides for refund of the entertainments duty in the following circumstances :-
6 (2) Where the Commissioner of Police or the District Magistrate as the case may be is satisfied that the whole of the net proceeds of an entertainment are devoted to philanthropic or charitable purposes and that the whole of the expenses of the entertainment do not exceed twenty per cent of the receipts the amount of the entertainments duty paid in respect of the entertainment shall be refunded to the proprietor. Sec. 7 confers power on the State Government to make rules for securing the payment of the entertainments duty and generally for carrying into effect the provisions of the Act and in the exercise of this power the State Government has made the Bombay Entertainments Duty Rules 1952 Though reference to some of the Rules was made in the course of arguments it is not necessary to set them out in extenso. We shall have occasion to refer to them while dealing with the arguments of the parties.
(3.) It will be seen that sec. 3 which is the charging section provides for the levy of entertainments duty on all payments for admission to an entertainment. The word all preceding the words payments for admission is an all embracing word intended to bring within the scope and ambit of the words it governs all that can possibly be included in them. This word is intended to remove any limitative or restrictive inhibition which might otherwise affect the full and natural content of the words it governs and it is therefore clear that the Legislature meant to include within the subject matter of the charge all payments for admission and did not intend that any payment for admission should be left out from the charge of the duty. But that raises the question : what is included within the connotation of the expression payment for admission ? Payment for admission is defined in sec. 2(b) but that is an inclusive definition and what is set out in the inclusive clause cannot prevent the expression receiving its ordinary popular and natural sense wherever that would be properly applicable. The inclusive definition is given for the purpose of enlarging and not restricting the meaning of payment for admission and that which independently of the inclusive definition in ordinary language would properly be regarded as payment for admission does not cease to be so because it does not fall within the inclusive clause. It is therefore necessary to understand what the expression payment for admission means according to the plain natural connotation of its words. Does it include an amount realised from the purchaser on account of the entertainments duty ? Now there is no doubt that where the proprietor charges to the purchaser an amount on account of the entertainments duty the purchaser is required to pay such amount to the proprietor for the purpose of gaining admission to the entertainment and it is therefore as much a payment for admission to the entertainment as the amount charged by the proprietor specifically for admission to the entertainment. The amount charged by the proprietor on account of the entertainments duty is an amount which has to be paid by the purchaser for securing admission to the entertainment and it is therefore a payment for admission within the plain natural connotation of the expression. Taking the illustration given in the course of the argument where the proprietor charges one rupee 20 paise to the purchaser out of which rupee one is specifically for admission to the entertainment and 20 paise is on account of the entertainments duty not only is rupee one a payment for admission but 20 paise is also a payment for admission for without payment of 20 paise the proprietor would not admit the purchaser to the entertainment and the payment of 20 paise is made by the purchaser for securing admission to the entertainment. Both the payments one of rupee one and the other of 20 paise are therefore payments for admission and under sec. 3 entertainments duty would be liable on both the payments. It is also possible to regard payment on account of the entertainments duty as a payment falling within sec. 2(b)(iv). Sec. 2(b)(iv) refers to a payment for any purpose whatsoever connected with an entertainment which a person is required to make as a part of attending or continuing to attend the entertainment in addition to the payment if any for admission to the entertainment. Now entertainments duty is certainly connected with the entertainment and a payment made by the purchaser on account of the entertainments duty would therefore be a payment for a purpose connected with the entertainment and since the purchaser is required to make such payment as a condition of attending the entertainment it would be a payment for admission within the meaning of sec. 2(b)(iv). Moreover it may be noticed that if the amount charged on account of entertainments duty is not shown separately but is merged in the price of admission and the price of admission is fixed as one single composite amount the whole of it would admittedly be a payment for admission : then on principle why should it make any difference if the price of admission is split up and the amount charged on account of entertainments duty is separately shown. The character of the payment cannot change according as it included as part of the price of admission or is shown as a separate item. If it is payment for admission in the one case it must be payment for admission in the other.;
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