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2002 DIGILAW 364 (KAR)

KUDALA SANGAMESHWARA v. STATE OF KARNATAKA

2002-06-11

P.VISHWANATHA SHETTY

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P. VISHWANATHA SHETTY, J. ( 1 ) THOUGH this petition is posted for preliminary hearing in 'b' Group, with the consent of the learned counsel appearing for the parties, this petition is taken up for final hearing and disposed of by this order. ( 2 ) THE petitioner in this petition is a proprietary concern carrying on business in exhibition of cinematography shows. In this petition, the petitioner has called in question the correctness of the order dated 21st January 2002, a copy of which has been produced as Annexure 's' passed by the third respondent-Entertainment Tax Officer, Sindhanur, rejecting the prayer of the petitioner for grant of exemption from payment of entertainment tax for a period of three years from the date of holding the first cinematography show in his newly constructed theatre on 14/08/2000. ( 3 ) FEW facts which are not in serious dispute and which may be relevant for the disposal of this petition may be stated as hereunder :- ( 4 ) THE petitioner had constructed a cinema theatre and exhibited the first cinematography show on 14/08/2000. On 1 8/08/2000, the petitioner made an application before the Commercial Tax Officer, Sindhanur Taluk, Sindhanur requesting him to grant exemption from payment of entertainment tax. On the same day, he also made an application before the Director, Department of Information and Publicity, Govt. of Karnataka, Bangalore (hereinafter referred to as "director"), requesting him to certify that the cinema theatre constructed by the petitioner was a newly constructed one and the same has come into existence subsequent to the issue of the notification dated 30/10/1996 by the State of Karnataka. The Director gave a certificate to the petitioner on 24/02/2001 certifying that the cinema theatre established by the petitioner was a newly constructed one and the same had come into existence after the issue of the notification dated 30/10/1996. A copy of the said certificate has been produced as Annexure E to the writ petition. Thereafter on 19th March 2001, the petitioner produced the certificate Annexure E issued by the Director along with a covering letter before the third respondent-Entertainment Tax Officer, Sindhanur and requested him to grant exemption from payment of entertainment tax. The said covering letter is produced as Annexure F to the writ petition. Thereafter on 19th March 2001, the petitioner produced the certificate Annexure E issued by the Director along with a covering letter before the third respondent-Entertainment Tax Officer, Sindhanur and requested him to grant exemption from payment of entertainment tax. The said covering letter is produced as Annexure F to the writ petition. However, the third respondent, as noticed by me earlier, in the impugned order Annexure S, has rejected the prayer of the petitioner for grant of exemption mainly on the ground that the exemption certificate produced by the petitioner was beyond the period of 45 days prescribed under the Notification dated 30/10/1996. ( 5 ) SRI Rabinathan, learned counsel appearing for the petitioner submitted that since the petitioner had produced the certificate issued by the Director within thirty days from the date of issue of the certificate and since there was no default on the part of the petitioner in taking steps to obtain the certificate, the third respondent ought to have granted the exemption from payment of entertainment tax as prayed for by the petitioner. According to the learned counsel, the word "thirty days" prescribed for obtaining the certificate from the director must be understood as "from the date of issue of the certificate by the Director" and it cannot be understood as "from the date of commencement of exhibition of the first cinematography show". ( 6 ) HOWEVER, Sri Veda Murthy, learned Government Pleader, while supporting the impugned order, submitted that since the language employed in the Notification dated 30/10/1996 makes it amply clear that a certificate is required to be obtained from the Director within thirty days from the date of first commencement of exhibition of cinematography show and the discretion is conferred on the authority to condone the delay only for a period of fifteen days beyond the period of thirty days and since admittedly, the petitioner has failed to do so, the order impugned cannot be found fault with. ( 7 ) IN the light of the rival contentions advanced by the learned counsel appearing for the parties, the only question that would arise for consideration in this petition is as to whether the impugned order is liable to be quashed and the petitioner is entitled for the benefit of exemption from payment of entertainment tax as prayed for by him or not. ( 8 ) THE first respondent-State Government by means of its Notification dated 30/10/1996 in exercise of the power conferred on it under sub-sec. (1) of S. 7-A of the Karnataka Entertainments Tax Act, 1958 (hereinafter referred to as the "act"), granted exemption from payment of entertainment tax in respect of the entertainments held in newly constructed cinema theatres situated within the limits of a local authority, other than the Corporation of the City of Bangalore for a period of three years from the date on which the first cinematography show is held in such cinema theatre or from the date of the said notification whichever is later; however, subject to the several conditions and restrictions imposed in the said notification. The clause (a) of the said Notification stipulates that the proprietor of a newly constructed cinema theatre who claims exemption from payment of entertainment tax under the notification is required to produce before the authority, within thirty days from the date on which the first cinematography show is held, a certificate obtained from the Director, Department of Information and Publicity, Government of Karnataka, certifying that the cinema theatre is a newly constructed one and has come into existence after the date of issue of the notification dated 30/10/1996 and specifying the name of the local authority within the limits of which it is situated and the date on which the first cinematography show was held thereon. Proviso given to the said clause confers discretion on the assessing authority, on sufficient cause being shown by the properietor and for the reasons therein, to condone the delay in production of the certificate issued by the Director, for a period of further fifteen days after the expiry of thirty days therefrom. It is useful to extract the said clause (a) of the Notification which reads as hereunder :-"the proprietor claiming exemption under the notification shall - (a) produce before the authority, within thirty days from the date on which the first cinematography show was held, a certificate obtained from the Director, Department of Information and Publicity, Government of Karnataka, certifying that the cinema theatre is newly constructed and has come into existence after the date of this notification and specifying the name of the local authority within the limits of which it is situated and the date on which the first cinematography show was held thereon. Provided that the concerned authority may, on sufficient cause being shown by the properietor and for reasons to be recorded in writing, condone the delay in respect of the certificate produced after the expiry of such period of thirty days but within a further period of fifteen days therefrom; and" ( 9 ) AS noticed by me earlier, the claim of the petitioner for grant of exemption came to be rejected by the third respondent on the ground that the petitioner did not produce the certificate from the Director within the time prescribed, i. e. within the maximum period of forty five days i. e. from the date of commencement of exhibition of the first cinematography show in his newly constructed cinema theatre. From a reading of the Notification dated 30/10/1996, it can be easily spelt out that the object of granting exemption from payment of entertainment tax appears to be to encourage people in construction of cinema theatre within the limits of local authority other than the Corporation of the City of Bangalore so that new cinema theatre could come up which may in course of time earn entertainment tax, cess, surcharge, show tax etc. to the State and also provide entertainment to the members of the public of that area who have lesser opportunities for entertainment in those areas. With this object in mind, if the notification was issued by the State Government in exercise of the power conferred on it under sub-sec. (1) of S. 7-A of the Act, the benefit intended to be given to the properietors who construct the cinema theatres and exhibit cinematography shows cannot be deprived of by giving a strict meaning and placing a narrow construction with regard to the period prescribed for production of the certificate from the Director. Once a proprietor who has constructed the cinema theatre exhibits cinematography show, and makes a request for issue of the certificate with the Director, such a person has no control with regard to the time taken by the Director to issue the certificate. Once a proprietor who has constructed the cinema theatre exhibits cinematography show, and makes a request for issue of the certificate with the Director, such a person has no control with regard to the time taken by the Director to issue the certificate. Therefore, though the language employed in the notification indicates that a proprietor of a theatre claiming exemption under the notification is required to produce the certificate from the Director within thirty days from the date on which the first cinematography show was held, the time prescribed for production of the certificate from the Director must be understood as "from the date of issue of the certificate by the Director". Otherwise, the very object of the Notification which is intended to give benefit to the proprietor of a cinema theatre who constructs a cinema theatre and starts exhibiting the cinematography shows in areas other than the Bangalore City could be frustrated on account of inaction on the part of the Director. The experience shows that the authorities who are required to attend to several administrative work will not either have the will or the desire to attend to the request made by the members of the public immediately or they do not have sufficient time at their disposal to immediately attend to such requests. Further, there is no statutory obligation cast on the Director to issue the Certificate within the time prescribed from the date of application made on that behalf. Further, the Director is required to give the certificate only after being satisfied that the theatre constructed is a newly constructed one and the applicant-proprietor of the theatre who has made an application for issue of the certificate has exhibited cinematography show and the theatre is located in the local area other than the Bangalore City Corporation. All these require an enquiry to be held by the Director and the same takes sometime. Along with the duty of issuing the certificate, as noticed by me earlier, the Director is also required to discharge various other functions and duties. Therefore, any lapse or delay on the part of the Director cannot result in deprivation of the benefit conferred in terms of the Notification, to the proprietor of a cinema theatre who constructs the theatre and starts exhibiting the cinematography show after making huge investment. Therefore, any lapse or delay on the part of the Director cannot result in deprivation of the benefit conferred in terms of the Notification, to the proprietor of a cinema theatre who constructs the theatre and starts exhibiting the cinematography show after making huge investment. In the instant case, as noticed by me earlier, it is not in dispute that the petitioner has constructed a new cinema theatre and exhibited the first cinematography show on 14/08/2000 and he made an application before the Director for issue of certificate on 18/08/2000 and on the same day, he also made an application before the Commercial Tax Officer, Sindhanur, seeking grant of exemption from payment of entertainment tax in terms of the Notification dated 30/10/1996. However, since the certificate was not issued to the petitioner within forty five days from the date of commencement of the first cinematography show, i. e. . on 14/08/2000, the petitioner could not produce the certificate along with the application filed by him seeking exemption. However, he produced the certificate issued by the Director on 24/02/2001 with the covering letter Annexure F dated 19th March 2001 within thirty days from the date of issue of the Certificate by the Director. In my view, proper construction to be placed to the Government Notification which prescribes thirty days for production of the certificate from the Director is to understand that the thirty days time prescribed for production of certificate is from the date of issue of the certificate by the Director; and not from the date of first exhibition of the cinematography show. This is clear from the fact that the contents of the certificate to be issued by the Director also requires the Director to state the date on which the first cinematography show came to be exhibited. Therefore, in the light of the discussion made above, I am of the view that the petitioner was entitled for the benefit of exemption from payment of entertainment tax in terms of the Government Notification Annexure A dated 30/10/1996. Therefore, in the light of the discussion made above, I am of the view that the petitioner was entitled for the benefit of exemption from payment of entertainment tax in terms of the Government Notification Annexure A dated 30/10/1996. ( 10 ) HOWEVER, the next question that would arise for consideration is that since the period of three years from the date of exhibition of first cinematograpy show has expired and in the meanwhile, the petitioner has already collected the entertainment tax from the members of the public who have been visiting his theatre, what should be the nature of relief that is required to be given to the petitioner. As noticed by me earlier, the claim of the petitioner for exemption from payment of entertainment tax was rejected on the ground that the petitioner did not produce the necessary certificate from the Director within the time prescribed. The said view, as I have already held, is unsustainable in law and the petitioner was in the facts and circumstances of the case, entitled for the benefit of exemption from payment of entertainment tax. Therefore, the question would be for the lapse on the part of the authorities in not properly construing the Government Notification and denying the relief to the petitioner whether the petitioner should be deprived of that benefit which he was entitled to in law. In my view, the default on the part of the authorities in not properly construing the Government Notification, referred to above, should not deprive the petitioner the benefit of the Government Notification which allows exemption from payment of entertainment tax merely on the ground that the period has already expired. In my considered view, in a situation like this, it is the duty of the court to evolve a principle in furtherance of justice to give relief to the party. In the facts and circumstances of the case, I am of the view that it would be in the interest of justice to direct the respondents to grant exemption to the petitioner from payment of entertainment tax which was leviable for the period commencing from 14/08/2000 i. e. the date on which the petitioner first exhibited the cinematography show, for a period of three years, within a time to be fixed by the respondent, in the light of the order made in this petition. However, it is necessary to point out that if the entertainment tax fixed or to be fixed is more than the entertainment tax payable for a period of three years from 14/08/2000, the petitioner is required to pay such additional differential entertainment tax. ( 11 ) THEREFORE, in the light of the discussion made above, I make the following order :- order (I) Order Annexure S dated 21/01/2001 passed by the third respondent - Entertainment Tax Officer, Sindhanur, is hereby quashed. (ii) The third respondent is directed to grant exemption for a period of three years, from payment of entertainment tax equal to the amount payable by the petitioner from 14/08/2000 in terms of the Notification dated 30/10/1996 from the date subsequent to the date of passing of this order, to be fixed by the third respondent. However the third respondent shall comply with the direction given above, within a period of one month from the date of receipt of a copy of this order. ( 12 ) IN terms stated above, this petition is allowed and disposed of. Rule is issued and made absolute. However, no order is made as to costs. Petition allowed. --- *** --- .