- (1.) OM Prakash, J. By this petition, petitioner engaged in the business of ex hibiting cinematograph films in their cinema theatre, named as 'ram Chitra Mandir', Allahabad district, seek quashing of impugned order dated 1-4- 1997 (Annexure '11' to the writ petition) passed by the respondent rejecting the petitioners' option made in Form 'r' declaring two shows as against three shows, declared in the preceding years under Rule 24-A of the U. P. Entertainments and Betting Tax Rules, 1981 (briefly, 'the Rules') for making com pounded payment under the proviso to Sec tion 3 (1) of the U. P. Entertainments and Betting Tax Act, 1979 ('the Act' for short) on the ground that reduction in number of shows from three to two, will cause in reduc tion in the gross collection capacity.
(2.) THIS petition raises a short question for consideration whether the petitioners were free to declare any number of shows for the financial year 1997-98 in the option Form 'r', submitted by them for making compounded payment within the meaning of the proviso to Section 3 (1) of the Act. Sub-section (1) of Section 3 of the Act provides that there shall be levied and paid on all payments for admission to any entertainment, an entertainment tax at such rate not exceeding one hundred and fifty per cent 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. Proviso to sub-section (1) states 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-sec tion, pay a compounded payment to the State Government on such conditions and in such manner as may be prescribed and at such rate as the State Government may from time to time notify.
(3.) THE petitioners are running their cinema theatre in a local area having a population of less than one lakh and, there fore, they opted for compounded payment under the proviso to Section 3 (1) in Form 'r', filed on 17-3-1997 for the financial Year 1997- 98 declaring two shows, but that was rejected by the respondent in view of sub-rule (4) of Rule 24-A of the Rules, which runs as under: " (4) THE proprietor shall strictly adhere to the declaration under sub-rule (1) and shall obtain permission of District Magistrate before effecting any change in the number of seats, the ticket rate and the number of shows. THE licensing authority shall have the power to revise the compounded amount of tax upwards if the gross collection capacity increases as a result of such permitted change. " The question for consideration is whether on the facts and in the circumstan ces of the case, sub-rule (4) of Rule 24-A is applicable to find out answer of this ques tion, it is nothing but appropriate to dissect the anatomy of the relevant provisions of the Act and the Rules.;