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2004 DIGILAW 573 (PNJ)

NANDAN THEATRE v. STATE OF PUNJAB.

2004-05-17

N.K.SUD, S.S.GREWAL

body2004
JUDGMENT N.K. SUD, J. - This order will dispose of two writ petitions, viz., C.W.P. Nos. 1919 and 1920 of 2003 involving common question of law and facts. Since the arguments were advanced in Civil Writ Petition No. 1919 of 2003, facts are being taken from the said petition. Petitioner is running a Cinema Hall at Amritsar known as "Nandan Theatre". It was granted the necessary licence under section 5 of the Punjab Cinemas (Regulation) Act, 1952 (for short, "the 1952 Act") by the District Magistrate, Amritsar on April 17, 1975. The licence is subject to several conditions mentioned in the schedule of conditions in the licence itself. In the schedule of conditions, the seating capacity of the cinema hall has also been prescribed and a bar has been imposed against admission of persons, in excess of the number so specified. A copy of the said licence has been attached as annexure P/1 with the writ petition. Petitioner is liable to pay entertainment tax, commonly known as show tax under the Punjab Entertainment Tax (Cinematographic Shows) Act, 1954 (for short, "the 1954 Act"), which has been amended from time to time. The State of Punjab exercising powers under article 213 of the Constitution of India issued an ordinance dated June 10, 1994 making certain amendments in the said Act whereby entertainment tax was sought to be levied on lump-sum basis on the gross collection capacity at a fixed percentage. Gross collection capacity means the admission fee receivable in respect of total number of seats as prescribed in the licence. The petitioner thereafter received communications dated July 4, 1994 and October 28, 1994 demanding entertainment tax/show tax on lump-sum basis along with a security to the tune of Rs. 50,000. Copies of these communications are attached as annexures P/2 and P/3 with the writ petition. Since the cinema business had been adversely affected due to advent of video parlours, city cables and various other T.V. commercial channels, the attendance in cinema halls had fallen much below the prescribed seating capacity. Accordingly, petitioner made a representation to the District Magistrate, Amritsar for reduction of seats. Such an application is competent under section 3D of the 1954 Act. Since the District Magistrate failed to take any action on this application, petitioner served a legal notice dated June 8, 2000 to the same effect. Accordingly, petitioner made a representation to the District Magistrate, Amritsar for reduction of seats. Such an application is competent under section 3D of the 1954 Act. Since the District Magistrate failed to take any action on this application, petitioner served a legal notice dated June 8, 2000 to the same effect. Receiving no response, another legal notice dated May 8, 2001 was issued by the petitioner which also failed to evoke any response. The petitioner, therefore, was compelled to file Civil Writ Petition No. 17360 of 2002 in which notice of motion was issued on November 14, 2002 and recovery of the arrears against the petitioner was stayed. In the meantime, the District Magistrate has passed order dated December 5, 2002 (annexure P/7) whereby application of the petitioner dated April 1, 1996 for reduction in the seating capacity has been declined. It is against this order that the present writ petition has been filed. On notice, written statement on behalf of respondents 1 and 3 has been filed by the District Magistrate, Amritsar. Mr. Akshay Bhan, learned counsel for the petitioners contended that the reasons given by the District Magistrate for non-reduction in seating capacity are not tenable. He pointed out that the District Magistrate has rejected the application on the following two grounds : (i) The number of seats had earlier been revised and enhanced at the request of the petitioner firstly in 1974 and then in 1978 and thus, the petitioner was estopped from requesting for reduction in the seating capacity. (ii) By granting reduction in the seating capacity to the petitioner, there will be loss of revenue. He contended that the reduction in the searing capacity is governed by section 3D of the 1954 Act which does not provide any such conditions for refusing reduction in seats. Mr. Salil Sagar, learned Additional Advocate-General, Punjab, on the other hand supported the impugned order. He additionally submitted that the petitioner's application was liable to be rejected on the sole ground that it had not been made to the requisite authority. He pointed out that a plain reading of section 3D of the Act shows that such an application is to be filed before the Excise and Taxation Commissioner and not the District Magistrate. Thus, he contended that the application as well as the order of the District Magistrate are both nullity. He pointed out that a plain reading of section 3D of the Act shows that such an application is to be filed before the Excise and Taxation Commissioner and not the District Magistrate. Thus, he contended that the application as well as the order of the District Magistrate are both nullity. We have heard counsel for the parties and have perused the relevant record. Section 3D of the Act reads as under : "3D No proprietor of a cinema house shall be allowed to reduce the seating capacity once permitted at the time of grant of licence by the District Magistrate except with the prior approval of the Commissioner." A bare perusal of the above provision shows that the reduction in seats had to be granted by the District Magistrate, who is also the licensing authority under the 1952 Act, under which the licence is granted. Since, he is the granting authority who grants licences on certain conditions including the seating capacity, any application for altering the conditions would normally lie to him. The language of section 3D also shows that the reduction in seating capacity is to be allowed with the prior approval of the Commissioner. If the application was to be filed before the Commissioner himself, then there was no reason to add the words "except with the prior approval of the Commissioner". In our view, the application at the first instance lies before the licensing authority. In case, the licensing authority is of the view that the request is not to be granted, then it can reject the application at its own level. However, if it comes to the conclusion that the seating capacity has to be reduced then, he is to seek prior approval of the Commissioner. Thus, we find no merit in the contention raised by the learned Additional Advocate-General that the application filed by the petitioner before the District Magistrate is a nullity. We also find merit in the contention of the learned counsel for the petitioner that none of the two grounds given by the District Magistrate for rejecting the petitioner's prayer for reduction in seating capacity are sustainable. Section 3D of the 1954 Act does not disqualify a person from applying for reduction in seating capacity if on an earlier occasion, seating capacity was enhanced at his instance. Similarly, loss of revenue can be no ground to decline the request. Section 3D of the 1954 Act does not disqualify a person from applying for reduction in seating capacity if on an earlier occasion, seating capacity was enhanced at his instance. Similarly, loss of revenue can be no ground to decline the request. In any case, where reduction in seating capacity is granted, loss of revenue is bound to occur and if that was the consideration, then no application under section 3D of the Act can ever be allowed. We are, therefore, satisfied that the impugned order dated December 5, 2002 (annexure P/7) cannot be sustained. Accordingly, we set aside the impugned order and direct the District Magistrate, Amritsar-cum-licensing authority to decide the claim of the petitioners afresh in the light of observations made above. Since the matter has been hanging fire for a long time, the district Magistrate-cum-licensing authority, Amritsar shall take necessary action within two months from the date of receipt of a certified copy of this order. It is made clear that, till the decision by the District Magistrate-cum-licensing authority, the recovery of the disputed amount shall remain stayed. The writ petitions are accordingly allowed. No costs.