- (1.) By all these writ petitions, the petitioners cinema owners have approached this Court challenging the impugned orders passed by the Dy. Commissioner (Administration), Commercial Taxes under the provisions of Scheme for Composition of Entertainment Tax, 1999 published by the State Government vide notification dtd.22.5.1999 in supersession of the previous Composition Scheme of 1987 under the provisions of Rajasthan Entertainment and Advertisement Act, 1957 (herienafter referred to as the Act and the Scheme). The facts are illustratively taken from SBCWP No.8518/2008 Kailash Talkies V/s State of Rajasthan.
(2.) Clause 1, 2, 3, 4, 5, 6 and 14 of the said new Entertainment Tax Composition Scheme, 1999 and preamble of th said Scheme relevant for the present controversy are reproduced hereunder for ready reference: " NOTIFICATION Jaipur, Dated : 22 nd May, 1999 PREAMBLE In exercise of the powers conferred by Section 6 (3)(a) of the Rajasthan Entertainments and Advertisement Act, 1957 and in supersession of the previous scheme for composition, the State Government hereby prescribes the following new scheme for composition of Entertainment Tax, namely: SCHEME FOR COMPOSITION OF ENTERTAINMENT TAX, 1999. 1. PRELIMINARY Composition of Entertainment Tax payable under Rajasthan Entertainments and Advertisements Tax Act, 1957, hereinafter referred to as the said Act, by a proprietor shall on his application be allowed and necessary order of composition shall be made by the Compounding authority in accordance with the relevant provisions contained herein. The aggregate amount of Additional Entertainment Tax for the preceeding year shall be included in the composition of this year and shown separately in the order. 2. APPLICABILITY Only those cinemas will be eligible for composition :- (i) which have regularly operated during the full year in the preceeding year for which the composition is applied for; and (ii) which have paid Entertainment Tax less than one crore in the preceeding year for which composition is applied for (i.e. the composition year). 3. PERIOD Composition shall be allowed for a period of one full year for the first year. It can be extended further through fresh composition either for a full year or a part thereof ending 31 st March. The composition money shall be payable to Government on monthly basis. 4. MONEY AMOUNT OF COMPOSITION Composition amount for the first year shall be :- (i)For category A-35% of the full seating capacity (ii)For category B 25% of full seating capacity (iii)For category C 15% of full seating capacity (iv)For category D 10% of full seating capacity of a Cinema Hall for the whole year multiplied by the admission rates, applicable classwise for the year under composition or equivalent to the tax liability of year 1997-98 whichever is higher. For the subsequent years, the amount of composition shall be determined by a proportionate increase equivalent to the upward revision of tax/admission rates in that year but subject to the condition that a minimum of 5% increase shall be made in the composition amount of the immediately preceeding year. Provided that those cinemas, which had been availing of the benefit of old composition scheme and later opted out of it, shall, if they again avail of the benefit of new composition scheme they will be required to pay the composition amount not less than what was being paid or was payable in the old composition. Explanation : Category of cinemas mentioned above are classified as follows:- Category A :- Cinames of Jaipur City. Category B:- Cinemas of Jodhpur, Udiapur, Kota, Ajmer and Bikaner cities. Category C: Cinemas operating at rest of the district head quarters of the State. Category D: Cinemas other than these three categories. 5. INCREASE OR DECREASE IN THE TAX ADMISSION RATES The amount of composition under Clause 4 of thisscheme shall be proportionately, revised when the rate of tax or the admission rate is revised during the composition period. In case of exhibition of any cinema for which some tax exemption has been allowed, the amount of relief would be worked out on the basis of reduced admission rate and such an amount due would be adjustable in the composition amount for the next month. Explanation : If the proprietor of cinema opts for increase in rates of admission as per para (ii) of condition 6 of the Form C- license for exhibition under the Rajasthan Cinemas (Regulation) Rules 1959, the additional entertainment tax so becomes due shall be deposited separately in the Government exchequer within 15 days of the closing of the option. 6. CHANGE IN LICENSED SEATING CAPACITY The composition shall apply only for the licensed seating capacity on the date of composition. In case the licensing authority increases or decreases the seating capacity of the cinema, the composition amount shall be revised accordingly. 7. ...... 8. ....... 9. ........ 10. ...... 11. ........ 12. ........ 13. ........ 14. DELEGATION OF THE POWER In exercise of the powers conferred by sectgion 19 (1) of the said Act, the State Government hereby delegates its powers of composition under section 6(3) (a) of the said Act to the Dy. Commissioner (Admn.), so that composition in appropriate case in accordance with this scheme may be allowed and worked through the Commercial Taxes Department. The Dy. Commissioner shall sanction composition with the prior approval of the Commissioner, Commercial Taxes. No.F.10(31)FD/Tax-Div./8x By Order of the Governor, sd/- (Shikhar Agarwal) Dy. Secretary to Government"
(3.) The Dy. Commissioner (Administration), the authority competent to pass these orders as per Clause 4 aforesaid with prior approval of the Commissioner, Commercial Taxes, passed the orders on 4.8.1999 vide Annex.1 in the case of present petitioners determining the composition again for the period from 22.5.1999 to 31.3.2000, the first financial year covered by the said new Scheme of 1999 and while determining the composition amount at Rs.30,495/- as per Clause 4 reproduced above further applied proviso to said Clause 4 and jacked up the monthly composition amount further to Rs.46,990/- on the basis of said proviso which stipulates that those cinemas, which had been availing of the benefit of old composition scheme and later opted out of it, shall, if they again avail of the benefit of new composition scheme, they will be required to pay the composition amount not less than the amount of composition determined for them under the Old Scheme of 1987 when they were operating under said Scheme of 1987. Since in this case, the monthly amount of composition determined under the present Scheme of 1999 otherwise was found to be lesser than the monthly composition amount under the Old Scheme of 1987, taking help of aforesaid proviso to Clause 4, the said authority raised the monthly amount of composition in the last para of initial order passed in their cases in the year 1999.;