K.G. Subramaniam Naidu vs Deputy Commercial Tax Officer, Ponneri Assessment Circle, Ponneri, Chengalpattu and Another

Swamikkannu, J.—This petition has been filed for the issue of a writ of certiorari to quash the orders of the first respondent herein dated

23rd July, 1981 and made in proceedings No. P.F.6/74-75, ordering adjustment of a sum of Rs. 4,820 from the security deposit of Rs. 9,000

deposited by the petitioner by way of term deposit into the State Bank of India, Ponneri.

In the affidavit filed in support of the writ petition, it is, inter alia, stated by the petitioner that he is the proprietor of the permanent cinema

theatre, viz., ""Vetrivel Murugan Theatre"" in Ponneri Town and that the said theatre was commissioned in the year 1974. He has been permitted to

pay a weekly tax of Rs. 2,410 in respect of the theatre u/s 5-B(1) of the Tamil nadu Entertainments Tax Act, 1939. A permit in form IV-B has

also been issued to him under rule 32-J of the Rules framed under the said Act, and he has been paying the tax for every week of the running of the

theatre. The weekly returns giving the totals in respect of the particulars recorded in form II for all performances during the week from Monday to

Sunday were being regularly submitted by the petitioner to the respondent, and the tax for the preceding week was being regularly paid on the

following Tuesday. While so, for the the week ending 29th June 1980, i.e., for the week from 23rd June, 1980 to 29th June, 1980, the theatre did

not function but remained closed, i.e., on the 23rd and 24th due to the demise of Sanjay Gandhi, on the 25th due to the demise of the Ex-President

V. V. Giri, and on the 26th and 27th due to projector failure and on the 28th and 29th due to current shortage. These facts were duly recorded in

the D.C.R. regularly maintained by the petitioner and also in the weekly returns submitted to the first respondent on 1st July, 1980. Along with the

weekly return, a covering letter was also addressed to the first respondent setting out the facts relating to the non-functioning of the theatre for the

week in question. As the theatre did not function for the entire week the tax for the said week was not paid. The first respondent did not raise any

objection or demand payment of tax for the said week. In fact the tax for the subsequent weeks was accepted by the first respondent without any

protest.

Similarly, for the week ending 7th December, 1980 (i.e., from 1st December, 1980 to 7th December, 1980) the theatre did not function and

remained closed. From 1st December, 1980 the licence was suspended by the Collector. On the 6th and 7th December the theatre did not

function due to rains. This was duly recorded in the D.C.R. as well as in the weekly return which was sent with a covering letter setting out the said

facts. The tax for the said week was not paid, nor was any objection or demand made by the first respondent, who had however received the tax

paid for the subsequent weeks without any protest.

While so, the petitioner was issued a notice in P.F.6/74-75 dated 30th March, 1981 by the first respondent proposing to assess the petitioner

for the two weeks referred to above, at the rate of Rs. 2,410 per week and calling upon him to file his objections if any. The petitioner filed his

objections on 6th April, 1981 stating that he was not liable to pay and tax for the said two weeks as the theatre did not at all function during those

two weeks. In his proceedings dated 23rd July, 1981 the first respondent ordered adjustment of a sum of Rs. 4,820 from the security deposit

towards the alleged arrears of tax due for the said two weeks and also informed the petitioner that further renewal of form IV-B permit and sealing

of tickets would be granted only after adequate security deposit had been remitted. The petitioner submits that the said order of the first

respondent is illegal and without jurisdiction and is liable to be quashed.

In this regard, we have to carefully go through the provisions of the Act relevant for the purpose of this case. Section 4 and section 5-B are the

relevant provisions in this regard. It is also relevant to note that these aspects of the case have not been traversed in the counter filed on behalf of

the respondents. Section 4 of the Tamil Nadu Entertainments Tax Act, 1939 was substituted for the original section 4 by the amending Act of

1947 and it came into force on 1st January, 1948. Section 5-B of the Act was substituted by amending Act 1 of 1983. The contention of the

petitioner, as already stated, is that when there had been no admission as contemplated by section 4 to any entertainment on payment for

admission, then there could not be any imposition of tax even if it was one which was agreed to be paid u/s 5-B. This contention has necessarily to

be upheld. In this case, there is a certificate issued by the Deputy Commercial Tax Officer, Ponneri Assessment Circle, dated 30th July, 1981 to

the effect that on verification of the form II returns filed by the proprietor of the theatre, Vetrivel Murugan Theatre, it was found that shows were

not conducted for the weeks ending 29th June, 1980 and 7th December, 1980. Now, it is not the case of the respondents that on any day any

show had been conducted during the said two weeks by the petitioner. In other words, there is no admission of any person into the theatre for

entertainment as contemplated in section 4. When once there has been no show, then, even if there is an agreement to pay the tax as between the

assessee and the department, u/s 5-B, the assessee is not liable to pay tax as there had been no admission. Therefore, viewing the entire case

through the provision of section 4 together with section 5-B, it is clear that when there has been no show exhibited by the theatre owner, there

cannot be any demand for payment of tax from the theatre owner even if there is an agreement to pay tax. This Court, therefore, holds that the

petitioner is not liable to pay any amount towards entertainments tax for the two weeks above referred to and as such, the demand made for

payment of tax by the first respondent for the said two weeks in question, is illegal. The impugned order is therefore liable to be quashed and is

hereby quashed. The writ petition is allowed. Since it is not submitted (sic) that the tax demanded under the impugned order had been paid for

those two weeks when there was no show, necessarily, the said amount has to be refunded to the petitioner. This Court directs refund of the

amount so paid by the petitioner for the said two weeks. There will be do order as to costs.

Writ petition allowed.