A.N. Varma, J. - (1.) HAVING heard learned counsel for the petitioner and the learned Standing Counsel we are disposing of this petition finally at the stage of admission. The parties have exchanged their affidavits. The petitioner is aggrieved by the order dated 3(sic) th March, 1990 passed by the District Magistrate declining to consider the petitioner's application for payment of entertainment tax on compounded basis as contemplated by Section 3 of the U.P. Entertainment and Betting Tax Act 1979. The ground stated for not entertaining the petitioners' application by the District Magistrate in the impugned order is that the scheme relying on which the petitioner was claiming the right to exercise the option contemplated under the above provision has lapsed on 31st March, 1990. He should, therefore, continue to pay entertainment tax at the rates prescribed for the subsequent period.
(2.) IN the counter -affidavit the stand taken is that the scheme has undergone a change in view of the U.P. Entertainments and Betting Tax (Amendment) Act, 1990 with effect from 7th of July, 1990 and consequently the petitioners' application was rightly disposed of by the District Magistrate. We are unable to agree with the contention of the learned Standing Counsel. Section 3 of the U.P. Entertainments and Betting Tax Act, 1979 in as far as it is relevant for our purpose states: 3. Tax on payment for admission to entertainment. - -(1) Subject to the provisions of this Act, there shall be levied and paid on all payments for admission to any entertainment, other than an entertainment to which Section 4 or Section 4A or Section 4B applies or a compounded payment is made under the proviso to this sub -section, an entertainment tax at such rate not exceeding one hundred and fifty percent of each such payment as the State Government may from time to time notify in this behalf, and the tax shall be collected by the proprietor from the person making the payment for admission and paid to the Government in the manner prescribed. Provided that a proprietor of a Cinema in a local area having a population not exceeding one lac, may in lieu of payment under this sub -section pay a compounded payment to the State Government on such conditions and in such manner as may be prescribed and at such rate not exceeding forty percent of the gross collection capacity, as the State Government may from time to time notify, and different rates of compounded payments may be notified for different categories of local areas. By the amending Act the net change which has been introduced in proviso to Section 3 is that the outer limit of 40 percent has been done away with, with the result that the State Government is at liberty to prescribe the rates of entertainment tax without any restriction as to any maximum limit. The Amending Act does not go any further. It does not affect the right of the applicant to apply for the benefit of payment of entertainment tax on compounded basis. The district Magistrate was, therefore, clearly wrong in thinking that the scheme of payment of entertainment tax on compounded basis has ceased to be effective from 31st March, 1990. The scheme is now part of the Act. It is in the shape of Section 3 thereof. Only the rates and the procedure may undergo change from time to time. In the result the petition succeeds and is allowed. The impugned order dated 30th March, 1990 (Annexure -2 to the writ petition) passed by the District Magistrate Mau is quashed. The District Magistrate shall now dispose of the petitioners' application in accordance with law keeping in view the observations made herein within 15 days of the date on which a certified copy of this order is submitted before the District Magistrate. The District Magistrate shall treat the application of the petitioner as if made for the period ending 31st March, 1991. For the subsequent period the petitioners' application, it made, shall be disposed of in accordance with the notifications which may be in force for that period. ;