Anchal Cinema vs State of Rajasthan and Others

R.S. Chauhan, J.—The order dated 5-12-2002, passed by the District Collector, the Appellate Authority, under the Rajasthan Panchayati Raj Act, 1994 (`the Act'', for short) holding the petitioner liable to pay entertainment tax 100% on each ticket sold by the petitioner cinema hall, is under challenge in this writ petition.

The brief facts of the case are that the petitioner, Anchal Cinema, started exhibiting films within the jurisdiction of Panchayat Samiti Kishangarh Bas, on or about 14-7-1996. Initially, the State Government had exempted the collection of entertainment tax on cinema houses which were running in Panchayat Samiti area. The said exemption was given for a period of five years from the date of commencement of the business. The said exemption was given from the rigor of entertainment tax leviable under the Act and the Rajasthan Panchayati Raj Rules, 1996 (`the Rules'', for short). After the exemption period was over, the Panchayat Samiti Kishangarh Bas started its proceedings against the petitioner u/s 68 of the Act read with Rule 71 of the Rules. It issued a notice to the petitioner requiring him to show cause as to why entertainment tax at the rate of 100% on the face value of the tickets be not imposed. In response to the said notice, the petitioner appeared before the Finance and Assessment Sub Committee of the Panchayat Samiti (`the Committee'', for short). However, on 29-9-2001, the Committee unanimously recommended that 100% entertainment tax be charged on each ticket sold by the petitioner. But the said decision was subject to confirmation by the General Body Meeting of the Panchayat Samiti. On 11-10-2001, the General Body Meeting confirmed the recommendation of the Committee. But simultaneously, it granted a liberty to the petitioner to raise its objection against the levy of 100% entertainment tax before the Development Officer. It also observed that written objections filled by the petitioner would be considered by the General Body Meeting of the Panchayat Samiti at a later date. However, as the petitioner was aggrieved, both by the recommendation dated 29-9-2001, and by the decision of Panchayat Samiti dated 11-10-2001, it filled an appeal before the Collector, Alwar u/s 71 of the Act. While filing the appeal before the Collector, and as the Panchayat Samiti had granted liberty to file written objections before the Panchayat Samiti, the petitioner also filed written objections before the Panchayat Samit. Vide resolution dated 24-11-2001, the General Body of the Panchayat Samiti considered the written objections of the petitioner and decided that instead of levying 100% entertainment tax, only Rs. 700/- per day, equaling Rs. 21,000/- per month, be levied on the petitioner. Since, the petitioner was still aggrieved by the said resolution, it filed another appeal before the Collector, Alwar. While the first appeal was registered as Case No. 62, the second appeal was registered as Case No. 70. Both the appeals were clubbed together and by a common order dated 5-12- 2002, the learned Collector upheld the recommendation of the Committee dated 29-9-2001 and the decision of the Panchayat Samiti dated 11-10-2001 i.e. imposition of 100% entertainment tax on the petitioner. Hence, this petition before this Court.

Mr. Ashish Sharma, the learned Counsel for the petitioner, has vehemently argued that the impugned order suffers from non-application of mind, as the learned Collector had failed to appreciate the facts in proper perspective. The learned Collector was seized with two appeals, first appeal case No. 62, arising out of the decision dated 11-10-2001, and the second appeal case No. 70, arising out of the decision dated 24-11-2001. Since the Panchayat Samiti had reconsidered its decision and it had reduced the entertainment tax from 100% to merely Rs. 21,000/- per month. Obviously, the order dated 11-10-2001 had merged with the order dated 24-11-2001. Therefore, the appeal filed against the order dated 11-10-2001 had become infructuous. Yet, notwithstanding this fact, the learned Collector has proceeded to decide the first appeal, i.e. the appeal against the decision dated 11-10-2001 and has totally ignored the facts and circumstances of the second appeal, i.e. against the order dated 24-11-2001. Hence, the entire decision of the learned Collector is unsustainable.

On the other hand, Mr. Ashvini Jaiman, the learned Counsel for the respondents, has strenuously argued that firstly u/s 68 of the Act, and Rule 71 of the Rules, the Panchayat Samiti does have power to impose 100% entertainment tax on the petitioner. Hence, the Panchayat Samiti was justified in imposing 100% entertainment tax. Hence, the decision dated 11-10-2001 is legally sustainable. Secondly, u/s 71 of the Act the Collector has ample power to decide the appeal against the order passed by the Panchayat Samiti. The said power has been exercised by the learned Collector after due application of mind. Therefore, he has supported the impugned order of the learned Collector.

Heard learned Counsel for the parties and perused the material available on record.

A bare perusal of the impugned order clearly reveals that both the appeals are shown in the title page. Moreover, even in the body of the impugned order, the learned Collector has noted the facts of the two different appeals, filed by the petitioner against the decision dated 11-10-2001 and the decision dated 24-11-2001. Yet, while discussing the merits of the case, the learned collector has noted only those objections which were raised by the petitioner in his first appeal. He has neither noted the objections raised by the petitioner in his second appeal, nor has given any finding about the decision dated 24-11-2001. Since the decision dated 24-11-2001 had reconsidered the decision dated 11-10-2001, obviously, the first appeal filed against the decision dated 11-10-2001 had become infructuous. In fact, the learned Collector should have debated and discussed the second appeal filed by the petitioner against the decision dated 24- 11-2001. However, he has singularly failed to do so. Thus, non-application of mind is writ large in the impugned order. Therefore, the order dated 5-12-2002 is unsustainable in the eyes of law.

In the light of these fact, the order dated 5-12-2002 is quashed and set aside and the case is remanded back to the learned Collector Alwar to consider case No. 70, i.e. the second appeal against the decision dated 24-11-2001, and to pass the necessary orders, after due application of mind, within a period of two months from the date of receipt of certified copy of this judgment.

Accordingly, the writ petition is, hereby, allowed. There shall be no order as to costs.