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2015 DIGILAW 507 (AP)

Inox Leisure Ltd. v. State of Andhra Pradesh

2015-07-21

A.RAJASEKHAR REDDY

body2015
ORDER : A. Rajasekhar Reddy, J. 1. These writ petitions are filed declaring the action of the respondents in enhancing the trade licence fee for the petitioners' Cinema Theatre, as illegal and arbitrary and for a consequential direction to set aside the Resolution No. 18 dated 16.4.2010 of Municipal Corporation of Vijayawada in respect of Cinema Halls. Since the subject-matter of the writ petitions is one and same, they are heard together and are being disposed of by this common order. 2. The case of the petitioners is that they are running Cinema Theatres in various places in Vijayawada after obtaining Cinema Exhibition licence from the competent authority i.e., Joint Collector, under Cinematography Act. The licence granted by the Joint Collector enables the petitioners to conduct exhibition of Cinemas in accordance with the terms and conditions imposed under B-Form licence for exhibition of motion pictures. However, though there is no requirement of obtaining trade licence from the Municipal Corporation the respondent authorities have been insisting the petitioners to obtain trade licence and have been demanding for payment of trade licence fee. The Council of Municipal Corporation of Vijayawada unilaterally passed resolution dated 16.4.2010, enhancing the trade licence fee on the basis of monthly rental value of the Cinema Theatres. It is also stated that there are no guidelines, Rules, schedule prescribing levy of trade licence fee. The Legislature has delegated its essential function entrusted to it by Constitution, determining the procedure and the limits of taxes, fee that can be imposed by the respondent Municipal Corporation inasmuch as it has failed to formulate policy, provisions, rule and guidelines prescribing the minimum and maximum amount of fee that can be levied by the Municipal authorities safeguards/fetters are the procedure for levy and assessment of fees/taxes resulting in excessive delegation of legislative functions. The power to fix rates/fee in me absence of ceiling being prescribed the Act is arbitrary and contrary to the judgment of the Hon'ble Supreme Court. 3. Counter-affidavit is filed by the respondents in WP No. 22056 of 2012 stating that as per the Hyderabad Municipal Corporation Act (for short 'the Act') the petitioner has to pay D & O trade licence. 3. Counter-affidavit is filed by the respondents in WP No. 22056 of 2012 stating that as per the Hyderabad Municipal Corporation Act (for short 'the Act') the petitioner has to pay D & O trade licence. It is also stated that Council of Vijayawada Municipal Corporation in its Resolution No. 18/18, dated 16.4.2010 accepted the enhancement of trade licence for 23 different trades by suggesting certain modification in certain trades as mentioned in the list under Section 622(2) of the Act. Basing on the resolution the respondents 2 and 3 fixed the trade licence with a reasonable enhancement for 23 different trades and also published in newspapers. The petitioner never raised any protest with regard to the same in writing. It is further submitted that under Section 70-G of the Act, the Special Officer has got all powers to decide the trade licence fee and that the resolution passed by the Special Officer for enhancing the trade licence is proper. 4. Learned Counsel for the petitioners contend that though the impugned notices are issued under Sections 521, 516, 539, 622 and 623 of the Act, none of the provisions authorise the respondents to impose trade licence fee on the petitioners. He further submits that Section6 of the A.P. Cinemas (Regulation) Act, 1955 deals with grant of licence and since the petitioner have obtained licence under A.P. Cinemas (Regulation) Act, no further licence is required under Municipal Corporation Act. 5. In support of his contentions he relied on judgments reported in K.C. Varadachari, Partner, Madras Oil Mills and Products v. The State of Madras, by the Secretary to the Government of Madras, Food and Agriculture Department, 1952 (2) MLJ 410 ; M/s. Mohta Ispat Limited, Ratlam v. The Chief Municipal Officer, Ratlam and others, AIR 1981 MP 62 ; Corporation of Calcutta v. Liberty Cinema, AIR 1965 SC 1107 ; Y. Venkateswar Rao and others v. Prohibition and Excise Superintendent, Khamman District and another, 2006 (1) ALD 445 : AIR 2001 SC 1356 . 6. On the other hand, learned Standing Counsel for the 2nd respondent submits that. 7. Section 6 of the A.P. Cinemas (Regulations) Act, 1955 reads as follows: "6. 6. On the other hand, learned Standing Counsel for the 2nd respondent submits that. 7. Section 6 of the A.P. Cinemas (Regulations) Act, 1955 reads as follows: "6. Special Provisions for buildings constructed or reconstructed solely for cinematograph exhibitions:--(1) Nothing contained in the Hyderabad Municipal Corporations Act, 1955 (Act II of 1956), or in the Andhra Pradesh (Andhra Area) Places of Public Resort Act, 1888 (Act II of 1888) or in the Andhra Pradesh (Andhra Area) District Municipalities Act, 1920 (Act V of 1920) or in the Andhra Pradesh (Andhra Area) Town Planning Act, 1920 (Act VII of 1920), or in the Andhra Pradesh (Andhra Area) District Boards Act, 1920 (Act XIV of 1920) or in the Andhra Pradesh (Andhra Area) Village Panchayats Act, 1950) in regard to-- (a) the grant of permission for the construction or reconstruction of a building, or (b) the grant of licence for the use of any place or building for any purpose for which such licence is required under those Act, or (c) the grant of permission to install any machinery in any place or building, shall apply to the construction or reconstruction of, or the use of, or the installation of any machinery in any place or building to be used exclusively for the holding of cinematograph exhibitions; and in every such case, an application for licence or permission referred to in any of the Clauses (a) to (c) above shall be made to the licensing authority under this Act, in accordance with the rules made in this behalf under this Act. (2) Subject to the control of Government and to any rules made in this behalf, the licensing authority, after making such inquiry as it deems fit and consulting the Chief Executive Officer (by whatever designation he may be known) of the authority concerned, may, for reasons to be recorded either grant or refuse to grant the licence or permission applied for." 8. In A.P. Bankers & Pawn Brokers' Association v. Municipal Corporation of Hyderabad, 2001 (3) ALD 13 (SC) : (2001) 3 SCC 646 , the apex Court held as follows: "Merely because a pawnbroker or a money lender is likely to set up a shop in the thick of a residential locality or in a crowded place would be no ground for the Commissioner to come to a conclusion that the entire trade or occupation of money lending and pawn broking is dangerous or likely to create nuisance. It is clarified that this Court is not saying that the Commissioner cannot under Section 521(1)(e)(ii) notify a particular trade or operation, i.e., include all persons carrying on that particular trade or operation." 9. In view of law laid down in all the above cited decisions, the provisions under Section521 have no application to the trade of the petitioners. 10. A perusal of the other provisions under Sections 403, 404 and 624 and 625 reads as follows: Sections 403 and 404 of the Act reads as follows: 403. Licence for sale in public places: Except under and in conformity with the terms and provisions of a licence granted by the Commissioner in this behalf, no person shall hawk or exposed for sale in any public street any article whatsoever, whether it be for human consumption or not. 404. Licences for use of skill in handicraft of rendering services for purposes of a gain in public place or street: Except under and in conformity with the terms and provisions of a licence granted by the Commissioner in this behalf, no person shall, for purposes of gain, use his skill in any handicraft or in rendering services to and for the convenience of the public in public place or public street. Similarly Sections 624 and 625 of the Act reads as follows: 624. Licence for sale in public place: Except under and in conformity with the terms and provisions of a licence granted by the Commissioner in this behalf, no person shall use nay public place or any public street for the purpose of hawking or exposing for sale, any article whatsoever whether it be for human consumption or not. 625. Licence for sale in public place: Except under and in conformity with the terms and provisions of a licence granted by the Commissioner in this behalf, no person shall use nay public place or any public street for the purpose of hawking or exposing for sale, any article whatsoever whether it be for human consumption or not. 625. Licence for use of skill in handicraft or rendering services for purposes of gain in public place or street: Except under and in conformity with the terms and provisions of a licence granted by the Commissioner in this behalf, no person shall, for purposes of gain use any public street for the purposes of using his skill in any handicraft or in rendering service to and for the convenience of the public. The above said provisions deal with licences to do business in public places and streets. In the present case, petitioners are not doing business in public places or streets, as such the said provisions will not justify the issuance of impugned notices. 11. When the very basis of imposition of trade licence is set aside, the question of enhancement of trade licence fee may not be relevant to the present issue. Accordingly, these writ petitions are allowed No costs. As a sequel, miscellaneous petitions pending if any, shall stand closed.