Laxmi Cinema v. STATE — 1997 DIGILAW 299 (GUJ)

K. R. VYAS, J. ( 1 ) THE petitioner, by way of this petition under Art. 226 of the Constitution of India, challenges the order, at Annexure "d", passed by the Deputy Secretary, government of Gujarat rejecting the appeal and confirming the order, at Annexure "c", passed by the District Magistrate, Valsad suspending the cinema and booking licence of the petitioner for 15 days. ( 2 ) THE facts givingrise to the present petition are that the petitioner is a proprietor of laxmi Cinema situated at Navsari. He has been granted cinema licnece as well as booking licence under the provisions of the Bombay Cinemas (Regulation) Act and the rules framed thereunder. On 10-6-1994, the Entertainment Tax Inspector, Valsad carried out a surprise composite inspection of the petitioner-cinema at 14. 00 hours during the first show between 12. 30 and 14. 30 hours and he found that the management had filled in form no. 17 for maintenance of accounts for sale of tickets. It was shown in the register of form No. 17 that in Balcony Class 14 spectators and in First Class 20 spectators were issued tickets. Thereafter, physical verification of the auditorium in the Balcony class as well as First Class was carried out by the said Inspector, and he found 17 spectators in balcony class and 28 spectators in the First class. According to the Inspector in all 12 more spectators than the number of tickets issued by the petitioner were there. Upon making report, the District Magistrate, Valsad, who is the licensing authority under the provisions of the Bombay Cinemas (Regulation) Act, issued a show cause notice on 1. 7. 94 wherein four allegations were made against the petitioner. They are as under :1. On the day of surprise visit/inspection, the management had filled in Form no. 17 for maintenance of accounts of sale of tickets. In balcony class 14 spectators and in First class 20 spectators were shown in the Register of Form no. 17. On physical verification of the auditorium in balcony class there were 17 spectators and first class 29 spectators were found. Thus totally 12 more spectators were there. 2. In balcony class, out of 17 spectators, 14 were holding tickets as per serial numbers of the ticket book whereas 3 spectators had the door keeper slips instead of spectator slips bearing Nos. 12366, 12371, 12374. Thereby evasion of tax is attempted. Thus totally 12 more spectators were there. 2. In balcony class, out of 17 spectators, 14 were holding tickets as per serial numbers of the ticket book whereas 3 spectators had the door keeper slips instead of spectator slips bearing Nos. 12366, 12371, 12374. Thereby evasion of tax is attempted. 3. In first class out of total 29 spectators, 20 spectators were holding tickets, but 9 spectators had no tickets, or complimentary tickets. Thus, evasion of tax is practised by non- issuance of tickets. 4. For a ticket or complimentary ticket, on each part of the ticket the rate of entrance serial number and book number, the date and show are required to be printed. During inspection it was noticed that the tickets did not bear the date as well as amended rate. ( 3 ) ACCORDING to the Licensing Authority, the petitioner has committed misconduct by contravening Rule 112 of the Bombay Cinema Rules, 1954 and Condition No. 23 of the licence. The petitioner was therefore called upon to show cause under Rule 131 of the rules as to why the cinema licence and the booking licence be not suspended/cancelled. ( 4 ) THE petitioner, vide its reply dated 30th August, 1994, inter alia, contended that due to mistake on the part of the keeper, while separating the parts of the tickets, instead of spectators counterfoils being given to the spectators, they were given the counterfoils which were required to be kept by the door-keeper. It was also submitted that out of 9 spectators found without tickets in the First class, there were 3 police men who had entered the auditorium without informing the Manager; 2 were sweepers, who were to clean the auditorium during interval and at the close of the show, and the other 2 persons were tiffin boys who had come with the tiffin for the staff of the cinema, and two boys had come to call some spectators as they were required immediately at home and were waiting in the auditorium for the spectators. It was, therefore, submitted that under these circumstances there was no question of any evasion of tax or intentional irregularity or misconduct on the part of the petitioner. It was, therefore, submitted that under these circumstances there was no question of any evasion of tax or intentional irregularity or misconduct on the part of the petitioner. ( 5 ) THE District Magistrate, vide his order dated 8-9-1994 directed suspension of the cinema licence and the booking licence of the petitioner-cinema for a period of 15 days with effect from 19-9-1994 to 3-10-1994. ( 6 ) BEING aggrieved by and feeling dis-satisfied with the aforesaid order, the petitioner filed an appeal under Sec. 8 (3) of the Bombay Cinemas (Regulation) Act, 1953 before the gujarat Government, which was heard and decided by the Deputy Secretary, Information, broadcasting the Tourism Department. It appears that the proprietor of the petitioner cinema could not remain present at the time of hearing due to the death of his brother. Therefore, an ex-pane order was passed by the Deputy Secretary dismissing the appeal of the petitioner and vacating the stay and the District Magistrate was directed to re-fix the dates afresh for the period of suspension of 15 days. Accordingly, the District Magistrate refixed the dates of suspension with effect from 17th February, 1985. The said orders are under challenge in this petition. ( 7 ) MR. S. R. Shah, learned Advocate for the petitioner, after inviting my attention to the relevant provisions of the Act and the Rules, submitted that as the show cause notice does not refer to any recommendation having been made by the Prescribed Officer attributing contravention of any of the provisions or any of the conditions of the licence granted under the Rules, it was not open to the Licensing Authority to suspend or revoke the licence. In the submission of Mr. Shah, since the show cause notice is silent, even though it alleges contravention of the provisions of the Entertainment Tax Act and it refers to the breach of the provision of the Bombay Cinemas (Regulation) Act and Rules 113 of the Bombay Cinema Rules, 1954 and Condition No. 23 of the Licence, no order of suspension or cancellation of the licence under Sec. 8 or Rule 131 can be taken into consideration and, therefore, the impugned order passed by the Deputy Secretary confirming the order passed by the District Magistrate is ex-facie contrary to law, illegal, arbitrary and without any authority or jurisdiction and, therefore, the same is required to be quashed and set aside. ( 8 ) IN order to appreciate the submissions of Mr. Shah, it is necessary to refer to the relevant provisions of this Act as well as the Rules. Sec. 8 of the Bombay Cinemas (Regulation) Act, 1953 deals with the power to revoke of suspend licence and it reads as under:"8. In the event of any contravention by the holder of a licence of any of the provisions of this Act or the Rules made thereunder or of any of the conditions or restrictions upon or subject to which the licence has been granted to him under this Act, or of any of the conditions or restrictions imposed by an order of exemption made under Sec. 10, or in the event of his conviction of an offence under Sec. 7 of this Act or Sec. 7 of the Cinematograph Act, 1952 (XXX VII of 1952), the licensing authority may revoke the licence or suspend it for such period as it may think fit: provided that no licence shall be revoked or suspended unless the holder thereof has been given reasonable opportunity to show cause. " ( 9 ) SECTION 8-A of the said Act deals with appeal and it provides that any person aggrieved by an order of a licensing authority refusing to grant a licence, or revoking or suspending any licence under Sec. 8, may within such period as may be prescribed, appeal to the State Government and the State Government shall, on such appeal, make such order as it thinks just and proper, and such order shall be subject to provisions 8b and 8c be final. Rule 131 of the Bombay Cinema Rules, 1954 provides for suspension or cancellation of licence and it reads as under :"131. Suspension or cancellation of Licence : (1) The Licensing Authority may suspend or cancel any license granted under these Rules for contravention of any of these Rules or the conditions of licence granted under these rules provided that the Licensing Authority shall give the licensee an opportunity to show cause before taking any action under this Sub-rule. (2) Notwithstanding the provisions of Sub-rule (1), the Cinema license shall be liable to immediate suspension or cancellation by the Licensing Authority, if, in the opinion of the Licensing Authority, the appliances in the Cinema for protection against and for extinguishing fire are inadequate or in any way insufficient or in unsatisfactory condition. (2) Notwithstanding the provisions of Sub-rule (1), the Cinema license shall be liable to immediate suspension or cancellation by the Licensing Authority, if, in the opinion of the Licensing Authority, the appliances in the Cinema for protection against and for extinguishing fire are inadequate or in any way insufficient or in unsatisfactory condition. (3) Notwithstanding the provisions of Sub-rules (1) and (2), the Licensing authority may, in his absolute discretion, at any time cancel or suspend any license granted under these Rules and may direct the Licensee to close the cinema either permanently or temporarily or direct him to comply with such directions and instructions that he may issue in order to prevent any obstruction, inconvenience, annoyance, risk, danger or damage to the residents or passers-by in the vicinity or for the maintenance of public safety and the prevention of disturbance in the Cinema and every licensee shall forthwith comply with any such directions or instructions given by the licensing Authority, and if the Licensee fails to comply with such directions and instructions his license shall be liable to immediate suspension or cancellation. " ( 10 ) READING the aforesaid provisions, it is clear that where an action for contravention of the provisions of the Entertainment Tax Act is required to be taken for suspension or revocation of licence, the condition precedent for the Licensing authority before issuing the order of suspension or revocation of the licence is that he must have received the recommendation from the Prescribed Officer and unless in the show cause notice or in the order, it is specifically stated or shown that there is a recommendation made by the Prescribed Officer under the Entertainment Tax Act for the contravention of the provisions of the Entertainment Tax Act or the Rules, no order of suspension or cancellation of licence either under Sec. 8 of the Act or Rule 131 (amended) of the Rules can be passed by the Licensing Authority. As far as the present case is concerned, there is no mention in the show cause notice or in the order passed by the District Magistrate suspending the licence of the petitioner that on account of the alleged breach of the provisions of the Entertainment Tax Act, as alleged in the show cause notice, he has received any recommendation from the Prescribed Officer. In view of this, allegation Nos. In view of this, allegation Nos. 2 and 3 made in the show cause notice regarding evasion of tax by the petitioner are without authority of law and, therefore, the said allegations are required to be ignored. ( 11 ) THE only allegation then remains against the petitioner is that on each part of the ticket the rate of entrance serial number and book number, the date and show are required to be printed, whereas during the inspection it was noticed that the tickets did not bear the date as well as the amended rate. In my opinion, reading the relevant provisions of the Act as well as the Rules, it is not necessary to have all such details on the tickets. Rule 113 of the Bombay Cinema Rules and Condition No. 23 of the License, which are relevant for our purpose, read as under :"rule 113. Price to be printed on the ticket etc. Every licensee shall print or cause to be printed on the face of every ticket, pass or other evidence of the right of admission to be sold or kept, offered or exposed for sale, the price charged therefor plus entertainment tax, if any, and he shall not at any time charge for any such ticket, pass or evidence of the right of admission a price in excess to that printed thereon. ""condition 23 :. . . The licensee shall comply with such other conditions as may be prescribed from time to time by Rules. " ( 12 ) READING the said Rule 113 and Condition No. 23, it is clear that it is not necessary that the rate of entrance, serial number and book number and the date and show are required to be printed since the requirement under Rule 113 is only to get printed the rate of the price charged plus the entertainment tax. Condition No. 23 of the license is only omnibus provision and is innocuous and it does not specify any specific condition which would attract the relevant provisions of the law. Therefore, no show cause notice can be issued on the basis of condition No. 23. Condition No. 23 of the license is only omnibus provision and is innocuous and it does not specify any specific condition which would attract the relevant provisions of the law. Therefore, no show cause notice can be issued on the basis of condition No. 23. Considering Rule 113 of the Rules and Condition No. 23 of the License, I am of the opinion that the show cause notice issued to the petitioner for the breach of Rule 113 is ex-facie vague, illegal and unauthorised and consequently the orders passed in pursuance of the said show cause notice are also illegal and without authority of law. In view of the above discussion, I am of the view that the orders at Annexures "c" and "d" to the petition passed by the authorities below are clearly illegal, bad and without authority of law and, therefore, they are required to be quashed and set aside. ( 13 ) IN the result, the petition is allowed. The orders at Annexures "c" and "d" passed by the respondents are quashed and set aside. Rule is made absolute accordingly with no order as to costs. .