JUDGMENT S.N. Mishra, J. In this writ application, the petitioner, M/s Shyam Talkies, Buniyadganj, Gaya, through its sole proprietor, Brijnandan Singh, has challenged the correct- ness and validity of the order, dated 27.5.1989. whereby there respondent District Magistrate, Gaya, has refused to renew the cinemas licence of the petitioner on the ground that the sales tax to the tune of Rs. 15,05,192/- is still due against the petitioner and has further directed the petitioner not to exhibit the cinema show. A copy of the said order is made Annexure-15 to this writ application. Shortly stated, the case of the petitioner is that the petitioner, which is a proprietary firm, applied for grant of the cinema hall registered on 14.6.81 under the Bihar Entertainment Tax Rules, 1967. After having satisfied the requirements in terms of the provisions of the Bihar Cinemas (Regulation) Act, 1954 and the Rules made thereunder, a temporary cinema licence was issued from time to time and ultimately, the permanent licence was granted to the petitioner, after having fully satisfied the requirements as envisaged under the provisions of the Act, and the rules framed thereunder. There was some confusion regarding the sitting capacity of the petitioner cinema hall, which was subsequently resolved. Initially, the permanent licence was granted vide letter, dated 11.10.85 wherein the sitting capacity was mentioned as 905. On subsequent, verification report, it was found that the sitting capacity was only 725 and, accordingly, the petitioner has applied for the amendment in the certificate regarding the sitting capacity from 905 to 725 on the basis of the report submitted by the Chief Town Planner. Accordingly, the permanent licence granted to the petitioner was amended and the sitting capacity was amended from 905 to 725. The prayer for amendment was made in terms of section 7 of the Act. As stated above, after the cinema hall having been inspected by the Chief Town Planner, the amendment was allowed, accordingly, the sitting capacity was reduced to 725, as stated above. 2. In this case, a counter-affidavit has been filed on behalf of the respondent District Magistrate wherein, inter alia, it is stated that in order to evade the payment of tax, the petitioner has filed a petition for reducing the sitting capacity. 2. In this case, a counter-affidavit has been filed on behalf of the respondent District Magistrate wherein, inter alia, it is stated that in order to evade the payment of tax, the petitioner has filed a petition for reducing the sitting capacity. It is alleged that since the permanent licence was granted on the basis of the sitting, capacity of 905, the petitioner cannot take resort to the provisions of section 7 of the Act for reducing the sitting capacity. On the basis of the sitting capacity originally mentioned in the licence, the tax amount seems to have been assessed by the respondent authority, which is under challenge in this writ application. Although from the order, it does not appear as to what is the basis for issuing the demand of Rs. 15 lacs and odd, yet it appears from the stand taken in the counter-affidavit that the amount so assessed is on the basis of the original sitting capacity mentioned in the licence issued to the petitioner. As stated above, on the report of the Chief Town planner, who inspected the cinema hall and submitted a report, the respondent State Government itself accepted the prayer of the petitioner for reducing the sitting capacity from 905 to 725, as it appears from the order, dated 27.6.89 as contained in Annexure-23. In that view of the matter, the plea taken by the respondents in the counter-affidavit cannot be accepted. 3. The second question for consideration is as to a whether the order passed by the Deputy Commissioner, Commercial Taxes is in accordance with the provisions of the Act and the Rules framed thereunder. Before answering the question, some provisions of the Bihar Entertainment Tax Act, 1948 as well as the Rules framed thereunder are to be noticed. Section 7A, provides suspension and revocation of licence. The Commissioner may order to revoke the licence for a period not exceeding there months under section 7A. Section 9 provides for filing of the returns and payment and recovery of entertainments tax. As it appears from the order, dated 27.6.89, as contained in Annexure-23 the case of the petitioner regarding sitting capacity is pending before the State Government and there cannot be any change in the same until final decision of the Government. Section 9 provides for filing of the returns and payment and recovery of entertainments tax. As it appears from the order, dated 27.6.89, as contained in Annexure-23 the case of the petitioner regarding sitting capacity is pending before the State Government and there cannot be any change in the same until final decision of the Government. It was further directed that meanwhile the petitioner shall have to pay the entertainments tax provisionally on the proposed sitting capacity of 1151 only and the petitioner shall exhibit cinemas on that very condition provisionally. Sub-section 9(2) provides that if the proprietor fails to furnish the return within the prescribed time, the prescribed authority shall direct the proprietor to pay the penalty not exceeding rupees 100/- but not less than Rs.25/- after the expiry of the prescribed date. Sub-section (9) of the said section mandates that before issuance of the direction in terms of section 9, a notice has to be given to the proprietor and after giving the opportunity of being heard impose penalty which may extend to 3 per cent of the amount of tax for each of the first three months following the due date and to each 6 per cent for three subsequent months or part there of section 9A provides the special mode of recovery of the tax. Section 9A mandates the prescribed authority to issue notice for writing letter to the Government forwarding a copy thereof to the proprietor on his last address. Clause (A) of section 9A prescribing that if the proprietor fails to pay the amount by due date in terms of the notice issued to him, a notice of demand will have to be served upon the person concerned directing him to pay the tax or penalty or both under the provisions of the Act and the rules framed thereunder. Sub-Section (5) of section 9A envisages that the person to whom the notice has been served may appear before the authority and satisfy that the money demanded by him was not payable by him which the authority is required to consider the prayer and to proceed in accordance with law. Sections 14 and 15 of the Act provide for the appeal and revision respectively if anyone is aggrieved by the order passed by the authorities. Sections 14 and 15 of the Act provide for the appeal and revision respectively if anyone is aggrieved by the order passed by the authorities. Admittedly, in this case, without following the procedure prescribed under the Act and the rules framed thereunder, the respondent authority has issued the demand on 26,5.89 completely ignoring the order passed by the State Government on the basis of the report submitted by the Chief Town Planner. That apart, from a perusal of the demand notice, dated 26.5.89, copy of which is made Annexure 15 to this writ application, it does not appear as to what is the basis for calculating the amount to the tune of Rs. 15 lacs and odds. As stated above, no notice was ever served upon the petitioner. The procedure prescribed under Act and the rules framed thereunder has not been adopted before issuing the demand notice. It further appears that no notice was ever served upon the petitioner in terms of the provisions, as mentioned above, before issuing such demand notice. In this connection rule 16 of the Bihar Cinema (Regulation) Rules, 1974 has to be taken notice of which is in the following terms : "16. Power of State Government to issue direction. - The State Government shall have power to intervene at any stage and to issue necessary direction as it deems fit from time to time for proper implementation of the provisions of the Act and the rules framed thereunder and also to amend or to modify the terms of licence granted by the licensing authority and also any other order passed in connection with the exhibition of films in the interest of public." Learned counsel for the petitioner has submitted that pursuant to the provisions of the aforesaid rule, the State Government has issued direction to all the District authorities not to close the cinema halls in the State of Bihar on account of non-payment of the entertainments tax. A copy of the order is made Annexure-16 to this writ application. The respondent authority without following the procedure, prescribed by the State Government in terms of rule 16 of the Rules has issued the impugned notice, which, in my view, is wholly arbitrary, illegal and without jurisdiction. Accordingly, the demand notice, dated 26.5.1989, a copy of which is Annexure-15 to this writ application is hereby quashed and this writ application is, accordingly, allowed. Accordingly, the demand notice, dated 26.5.1989, a copy of which is Annexure-15 to this writ application is hereby quashed and this writ application is, accordingly, allowed. However, it is made clear that if the respondent authority so desires, may proceed in accordance with the provision of the Act and the Rules framed thereunder as well as after following the direction issued by the State Government under rule 16 of the Rules quoted above. However, the petitioner will be at liberty to file an application for renewal of the licence if not already renewed in accordance with law and the respondent authority will consider the prayer of the petitioner in accordance with law.