- (1.)THESE two petitions for certiorari involve the interpretation of the true scope and ambit of the Madras Entertainments Tax (Amendment) Act, 1966, more specially Sections 2 and 7 of the Act. For deciding this question, it will suffice to notice the facts in W. P. No. 2408 of 1966.
(2.)THE petitioner in that case is the Managing partner of a Cinema Theatre styled as "the K. M. S. Theatre" at Mettupalayam in Coimbatore district. The other partners of the firm are his two brothers, one of whom is a minor. On 7-11-1965, the Commercial Tax Officer, Erode, made a surprise inspection of the theatre and found the booking clerk actually selling unauthorised tickets with forget seal "c. T. O. , Mettupalayam". The officer seized the forged seal of the C. T. O. , mettupalayam, the connected machines, materials and the incriminating records including the bogus tickets with and without numbers. The department claimed that the records so recovered revealed sale of spurious tickets from 1962 till the date of inspection. On 14th March and 1st June 1966, the petitioner was served with two pairs of 159 notices requiring him to file objections to a proposal to bring to tax the escaped payments for admission by tickets to the theatre during the period under the Madras Entertainments Tax Act, 1939, and to levy surcharge on the payments for admission under the Madras Local Authorities Finance Act, 1961. The petitioner preferred various objections which were all overruled by the Deputy commercial Tax Officer, Mettupalayam. This officer the, in the light of the actual suppression of the entertainments tax and surcharge as per records during a part of the period, applied his best judgment, and by order dated 10-8-1966, taking a week as the unit during the period since 1962 to the date of inspection, levied entertainments tax and surcharge, which, according to the officer, had escaped assessment. The petition is to quash the reassessment.
(3.)THE petitioner's grounds span a wide range, but we have heard argument on only one of them as the decision on that will be decisive on these petitioners. The ground is that neither the Entertainments Tax Act nor the Local Authorities Finance act conferred upon the Deputy Commercial Tax Officer power of re-assessment to bring to charge that which had escaped assessment. As to this, there is no dispute. In fact, Venkatadri, J. , in W. P. No. 513 of 1963, D/- 4-10-1966 (Mad.), held that there was no power of reassessment of what had escaped assessment under either of these Acts. Apparently, the state accepted this judgment but enacted the Entertainments Tax (Amendment) Act, 1966 which received the assent of the Governor on 25-11-1966 and came into effect on 30-11-1966, when the Act was published in the "fort St. George Gazette". The object of this Act is to make provision in the Entertainments Tax Act for power to reassess what has escaped assessment under the Act and to validate the reassessment made between the date of the principal Act and the date of the publication of the amending Act in the "fort St. George Gazette". The contention before us is that the power to reassess under S. 7-B introduced by the amending Act is incomplete and not exercisable, in the absence of prescription as to limitation contemplated by the section, and that, in view of this, Sec. 7 of the amending Act fails to validate the reassessments in question.