- (1.) R. A. Sharma, J. In order to encourage the construction of new cinema houses in small towns having a population of not more than one lac, the Government of U. P. issued incentive scheme, vide order, dated September 17, 1983 providing for grant-in-aid in the form of partial exemption from payment of entertainment tax for a period of three to four years depending on the population of the towns, to newly constructed permanent cinema houses. The above G. O. was amended, vide G. O. , dated July 21, 1986. The latter G. O. was substituted by another G. O. , dated July 18, 1989, according to which the permanent cinema houses constructed within the specified period will be entitled to grant-in-aid in the form of exemption from payment of the entertainment tax for a period of three years on certain conditions, one of which is that such cinema houses will not keep their admission rate (inclusive of tax) more than Rs. 5. Para 2 of the last G. O. has been substituted by G. O. , dated May 14, 1992, according to which grant-in-aid to the newly constructed cinema houses under the incentive scheme will be for a period of three years to the extent of 75% of the amount of entertainment tax pay able in relation to the film exhibited in the cinema house in question. All other conditions contained in G. O. , dated July 18, 1989, including the condi tion of keeping admission rate (inclusive of tax) not more than Rs. 5, have been retained and are still operative. Therefore, such cinema houses which are getting grant-in-aid under the incentive scheme, cannot charge admission rate more than Rs, 5 (inclusive of the tax ).
(2.) PETITIONERS have constructed permanent cinema houses in small towns under the incentive scheme. They obtained licences under the U. P. Cinemas (Regulation) Act, 1955 and Rules framed thereunder, for carrying on their business. The U. P. Entertainment and Betting Tax Act, 1979 (hereinafter referred to as the Act) provides for levy of entertainment tax on all payments for admission to any entertainment at the prescribed rates. By U. P. Cinemas and Taxation Laws (Amendment) Act, 1989 (U. P. Act No. 12 of 1989) Section 3-A was inserted in the Act authorising the proprietors of centrally air-cooled or centrally air-conditioned cinema to realise from the person making payment for admission to an entertainment in such cinemas extra charge of ten paise and twenty-five paise for air-cooling or air condi tioning, respective. The amount so charged under the said provision was exempted from payment of entertainment tax. By U. P. Act No. 14 of 1992 the said Section 3-A was substituted by a new section whereby in addition to extra charge for air-cooling and air-condi tioning, the proprietor of a cinema house was also permitted to realise from the person making payment for admission to an entertainment extra charge of 25 paise for maintenance of the cinema premises. The substituted Sec tion 3-A is as under : "3-A. Extra charges for maintenance of cinema and air-cooled and air-conditioned facility.- (I) Notwithstanding anything contained in this Act, the proprietor of a cinema may realise from the person making payment for admission to an entertainment in such cinema, - (a) an extra charge of twenty-five paise which shall be utilised for maintenance of the cinema premises ; (b) in case of a centrally air-cooled or centrally air-conditioned cinema a further extra charge of ten paise and twenty-five paise for air-cooling or air-conditioning facility respectively during the period commencing on the fifteenth day of March in any year and ending the fifteenth day of October next following : Provided that the proprietor of a cinema receiving grant-in-aid from the State Government Bunder any incentive scheme shall not be entitled to realise extra charge under clause (a) during the period such grant-in-aid is received by him. (2) The amount charged under sub-section (1) shall not be deemed to be payment for admission to an entertainment. (3) Where the extra charge referred to - (a) in clause (a) of sub-section (1) has not been utilised for maintenance of cinema premises ; (b) in clause (b) of sub-section (1) has been realised without providing the air-cooling or air-conditioning facility, as the case may be, the amount so realised shall be deemed to represent the aggregate of additional payment for admission to the entertainment and entertainment tax payable thereon. " The amount of twenty-five paise in clause (a) of sub-section (1) of Section 3-A for maintenance of cinema premises has, by subsequent amendment, been raised to Re. 1. According to the proviso to sub-section (1) of newly added Section 3-A of the Act the proprietor of a cinema house receiving grant-in-aid under the incentive scheme, is not entitled to realise extra charge under clause (a) for maintenance of cinema premises during the period the grant-in-aid is received by him. The Government has issued order in pursuance of the above proviso prohibiting the proprietors of the cinema houses constructed under the incentive schemes, from realising extra amount for maintenance of cinema pre mises. Petitioners who have constructed permanent cinema houses under incen tive schemes in small towns have, by means of these writ petitions, challenged the validity of the said proviso to sub-section (1) of Section 3-A of the Act and the Government Orders issued thereunder, whereby they have been prohibited from realising extra charge of Re. 1 for maintenance of their cinema premises.
(3.) THE Government has filed counter-affidavit and the petitioners have filed rejoinder-affidavits in reply thereto. We have heard learned counsel for the parties. The sole contention raised by learned counsel for that by the said proviso to sub-section (1) of Section petitioners have been discriminated against in violation the petitioners is 3-A of the Act the of Article 14 of the Constitution. This has been disputed by the learned Standing Counsel.;