Sri Srinivasa Theatre vs Commissioner of Commercial Taxes

Quadri, J.—This special appeal u/s 9E(1) of the Andhra Pradesh Entertainments Tax Act, 1939 (''the Act'') is filed by Shri Srinivasa Theatre, challenging the validity of the order of the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad dated 31-5-1984 in CCT''s Ref. L. III(i) 1422/84 confirming the order of the Deputy Commissioner, Commercial Taxes, Kakinada dated 24-2-1984 in Ref. A7/4460/82 passed under rule 49(2) of the Andhra Pradesh Entertainments Tax Rules, 1939 (''the Rules''). The appellant is running a cinema theatre. For the assessment year 1977-78, the proprietor of the theatre entered into an agreement with the department u/s 5(1) of the Act on 4-10-1977 which was valid up to 3-10-1978. At that time, the seating capacity of the theatre was 917.The appellant reduced the seating capacity to 632 with the permission of the Licensing Authority and subsequently entered into fresh agreement on 1-11-1977, revising the earlier agreement, for the period from 7-11-1977 to 6-11-1978. The Deputy Commissioner, Commercial Taxes, Kakinada, issued notice to the appellant under rule 49(2) to show cause as to why the revised agreement reducing the fixed sum of entertainment tax payable should not be set aside and the original tax liability been forced. After giving due opportunity to the appellant, the Deputy Commissioner by his proceedings Ref. A7/4460/82 dated 24-2-1984 revised the order of the Commercial Tax Officer, Ramachandrapuram dated 1-11-1977. The appellant filed a revision against the said order of the Deputy Commissioner before the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad, who by his order dated 31-5-1984 in CCT''s Ref. L.III (i) 1422 of 1984 confirmed the order of the Deputy Commissioner and dismissed the revision. The correctness of this order is assailed in this special appeal.

Mr. Srinivas appearing for Mr. A.K. Jaiswal, the learned counsel for the appellant, urged the following contentions:

(1) That the order passed by the Commercial Tax Officer revising the agreement pursuant to reduction in seating capacity is legal and valid in law;

(2) That u/s 9C, the order could have been revised within 4years from 1-11-1977 and as the order of the Deputy Commissioner was passed on 24-2-1984, it is beyond limitation; and

(3) That even though no time limit is fixed for exercise of jurisdiction under rule 49(2), the Deputy Commissioner cannot exercise the power after 6 years. Therefore, the order of the Deputy Commissioner as confirmed by the Commissioner is wholly illegal.

The learned Government Pleader for Commercial Taxes raised a preliminary objection with regard to the maintainability of the special appeal. He contends that no appeal lies against an order of the Commissioner passed under rule 49(2) u/s 9E, special appeal is provided only against an order passed by the Commissioner of Commercial Taxes u/s 9C suo motu and as the order under appeal is not passed u/s 9C, the special appeal is not maintainable.

We shall first consider the preliminary objection raised by the learned Government Pleader. To appreciate the contention of the learned Government Pleader, it would be useful to read section 9E, which is in the following terms:

"Appeal to High Court -(1) Any proprietor, objecting to an order passed by the Entertainments Tax Commissioner or Entertainments Tax Deputy Commissioner suo motu, under sub-section (1) or sub-section (2) of section 9C may appeal to the High Court within sixty days from the date on which the order was communicated to him:

Provided that the High Court may admit an appeal preferred after the period of sixty days aforesaid if it is satisfied that the proprietor had sufficient cause for not preferring the appeal within that period.

(2) The appeal shall be in the prescribed form, shall be verified in the prescribed manner and shall be accompanied by a fee of rupees one hundred.

(3) The High Court shall, after giving both parties to the appeal, a reasonable opportunity of being heard, pass such order thereon as it thinks fit.

(4) The provisions of sub-sections (6), (7) and (8) of section 9D shall apply in relation to appeals preferred under sub-section (1) of this section as they apply in relation to petitions preferred under sub-section (1) of section 9D."

Sections 9B to 9F were inserted by the Act No. 24 of 1984 with effect from 1-1-1984. A reading of the provision extracted above, makes it clear that a right of appeal is provided to any proprietor objecting to an order passed by the Entertainments Tax Commissioner or Entertainments Tax Deputy Commissioner suo motu under sub-section (1) or sub-section (2) of section 9C of the Act and the period of limitation prescribed is 60 days from the date on which the order was communicated to him. Thus, it is seen that an appeal to the High Court u/s 9E is against an order under sub-section (1) or sub-section (2) of section 9C passed either by the Entertainments Tax Commissioner or Entertainments Tax Deputy Commissioner suo motu. A perusal of section 9C shows that power to call for and examine the record of any order passed or proceedings recorded by any authority, officer or person subordinate to him under the provisions of this Act, including the order passed by the Deputy Commissioner suo motu revising the order of his subordinates, is conferred on the Entertainments Tax Commissioner or the Entertainments Tax Joint Commissioner. It may be pointed out here that an order u/s 9C can be passed by (i) the Entertainments Tax Commissioner, (ii) the Entertainments Tax Joint Commissioner, or (iii) the Entertainments Tax Deputy Commissioner. However, section 9E provides an appeal against an order passed by the Entertainments Tax Commissioner or the Entertainments Tax Deputy Commissioner u/s 9C. From a reading of the relevant provisions of the Act, no reason is discernible as to why no appeal is provided against an order passed by the Entertainments Tax Joint Commissioner u/s 9C. This appears to be an obvious omission.

In the instant case, the order was passed by the Deputy Commissioner under rule 49(2). Rule 49(2) which is relevant for our purpose, reads as follows:

"(2)(a) The Entertainments Tax Commissioner, subject to the control of the Government, and the Entertainment Tax Deputy Commissioner of the range concerned, subject to the control of the Entertainments Tax Commissioner, shall have power to superintendence the administration of the Act and the collection of the tax thereunder.

(b) In particular and without prejudice to the generality of the foregoing power, the Entertainments Tax Commissioner or the Entertainments Tax Deputy Commissioner of the range concerned may, in his discretion, call for and examine the records relating to any order passed by or any proceedings of any Entertainments Tax Officer or any other officer or person under the Act or these rules including cases where an inferior officer has exercised powers under the rules, either suo motu at any time, or on application preferred within six months from the date of communication of such order or proceeding for the purposes of satisfying himself as to the legality or propriety of such order as to the regularity of such proceedings and may pass such order with respect thereto as he thinks fit."

Clause (a) of sub-rule (2) of rule 49 provides that the Entertainments Tax Commissioner shall have power of superintendence and administration of the Act and the collection of the tax thereunder subject to the control of the Government and the Entertainments Tax Deputy Commissioner shall have the power of superintendence and the administration of the Act and the collection of the tax subject to the control of the Entertainments Tax Commissioner. Clause (b) of sub-rule (2) of rule 49 provides that the Entertainments Tax Commissioner or the Entertainments Tax Deputy Commissioner of the range concerned may call for and examine the records relating to any order passed by or any proceedings of any Entertainments Tax Officer or any other Officer or person under the Act or these Rules. This power can be exercised either suo motu or on the application of a party. If it is invoked by filing an application, the period of limitation prescribed is six months from the date of communication of the order or proceedings, as the case may be. But if it is a case of exercise of power suo motu, it can be at any time. In the instant case, on 24-2-1984 after 6 years and 9 months the Deputy Commissioner of Commercial Taxes revised the order of the Commercial Tax Officer dated 1-11-1977 against which the appellant filed a revision application before the Commissioner of Commercial Taxes under the abovesaid provision and the same was disposed of on 31-5-1984. As there is no rule which provides further relief to the proprietor of any theatre against the order of the Commissioner of Commercial Taxes passed under rule 49(2) that order has, therefore, become final.

Sections 9C and 9D among other sections, as has been noticed above, were introduced with effect from 1-1-1984. Section 9C provides revision to the authorities mentioned therein within a period of four years from the date of service of the order on the proprietor. That order is appealable u/s 9E. Therefore, the provisions contained in rule 49(2) would be deemed to have been repealed by the newly inserted provisions of sections 9C and 9D which provide revision and the period during which the power to revise the order can be exercised on an appeal against the orders passed on revision. There is nothing in the said provisions which saves the proceedings initiated under the rules in force at the time of insertion of the said sections. In these circumstances, section 8 of the Andhra Pradesh General Clauses Act, 1897 would come into operation. The said section is as follows:

"8. Effect of repealing an Act -Where any Act to which this Chapter applies, repeals any other enactment, then the repeal shall not-

(a) affect anything done or any offence committed, or any fine or penalty incurred or any proceedings begun before the commencement of the repealing Act; or

(b) revive anything not in force or existing at the time at which the repeal takes effect; or

(c) affect the previous operation of any enactment so repealed or anything duly done or suffered under any enactment so repealed; or

(d) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(e) affect any fine, penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or

(f) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, fine, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such fine, penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed."

This section is analogous to section 6 of the A.P. General Clauses Act. The effect of section 8 of the said Act is that the proceedings already initiated by the Deputy Commissioner of Commercial Taxes by issuing notice under rule 49(2) on 26-8-1983 would be saved and the authority would have the power to pass orders pursuant thereto. This is clear from clause (f) of section 8.

In State of Orissa Vs. M.A. Tulloch and Co., the theory of implied repeal fell for consideration of the Supreme Court and it was observed by the Supreme Court as follows:

"...the effect in law of a repeal, if it is not subject to a saving as is found in section 6 of the General Clauses Act, is also not a matter of controversy. The repealed Act is to be considered, except as to past and closed transactions, as if it had never existed. The principle on which the saving clause in section 6 of the General Clauses Act is based is that every later enactment which supersedes an earlier one or puts an end to an earlier state of the law is presumed to intend the continuance of rights accrued and liabilities incurred under the superseded enactment unless there were sufficient indications - express or implied - in the later enactment designed to completely obliterate the earlier state of the law. The entire theory underlying implied repeals is that there is no need for the later enactment to state in express terms that an earliest enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word ''repeal'' in the later statute. As the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded there can be no incongruity in attributing to the later legislation the same intent which section 6 presumes where the word ''repeal'' is expressly used...." (p. 1285)

Thus, it follows that the Deputy Commissioner of Commercial Taxes had power to pass appropriate orders under rule 49(2) having issued notice before the newly added provisions came into force. In this case, the Deputy Commissioner of Commercial Taxes passed the said order pursuant to that power. That order is final as no appeal is provided against such an order or against the order of the Commissioner of Commercial Taxes revising the order of the Deputy Commissioner.

We, therefore, hold that u/s 9E the appeal filed against the order passed under rule 49(2) is not maintainable. That provision is confined to only appeals against orders passed u/s 9C. In this view of the matter, we do not consider it necessary to pronounce upon the merits of the contentions raised by the learned counsel for the appellant. For the aforesaid reasons we hold that the special appeal is not maintainable u/s 9E and it is accordingly dismissed. In the circumstances, we direct the parties to bear their own costs.