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Madhya Pradesh High Court · body

2016 DIGILAW 1080 (MP)

Regency Agro Pvt. Ltd. v. State of M. P.

2016-11-28

SHEEL NAGU

body2016
ORDER 1. The present petition under Article 226 of the Constitution of India assails Annexure P-1 dated 3.7.2007 which are minutes of High Power Committee by which condition is imposed for availing the exemption under section 7 of the M.P. Entertainments Duty and Advertisement Act, 1936 ( for brevity “1936 Act”.) for a period of ten years to the extent that said exemption can be availed on the petitioner refunding and depositing with the treasury entertainment fee collected by him for the period from commencement of amusement park (Sun City) i.e. 5.1.2004 till date. 2. Learned counsel for the rival parties are heard. 3. It is submitted by the petitioner that under the policy of Government to attract tourism to the State of M.P. it was decided to grant exemption from payment of entertainment duty to entertainment centres including amusement park in regard to which notification under section 7 was issued vide Annexure P-6 was published in the M.P. Gazette Extraordinary dated 17.8.1995. It is submitted that the said exemption notice was subject to sole condition that amusement centre as defined in the said notification which included health farm (club), casino, exhibition centres, battery or electric operated train for children, amusement park and music/entertainment exhibition, would be certified by the State Government to be one of amusement centres. 4. It is further submitted and also not disputed by the State that the petitioner had established the amusement centre known as Sun City. After obtaining lease from the Gwalior Vyapar Mela Pradhikaran vide lease agreement 21.11.2003, it is further submitted that commercial operation of the said amusement park commenced on 5.1.2004. It is also submitted that on the strength of this exemption granted vide Annexure P-6 for a period of 10 years from the date of commencement of commercial operation. The said amusement park started its commercial operation from 5.1.2004. It is urged that passing of the impugned resolution dated 3.7.2007 (Annexure P-1) by the High Power Committee did not come to the knowledge of the petitioner as the same was not communicated to the petitioner and knowledge of the same could be acquired only when the sister concern of the petitioner was served with Annexure P-3 dated 25.4.2011 informing the petitioner that the FL3. Hotel license for the year 2011-12 would be renewed only when the arrears of entertainment tax of Rs.17,93,333/- are deposited. 5. Hotel license for the year 2011-12 would be renewed only when the arrears of entertainment tax of Rs.17,93,333/- are deposited. 5. It is also submitted by the petitioner that no admission fee was charged for entry of persons in the said amusement park and merely purchase coupons worth Rs.10/- were issued which were redeemable inside the park in exchange of food and other means of entertainment. 6. In the above factual background, it is submitted that once the State has granted exemption from levy of entertainment tax under section 7 by notification Annexure P-6, the High Power Committee had no authority to impose any condition for availing tax exemption and by doing so, the High Power Committee had in fact superseded the exemption notification which is statutory in nature. 7. The State, on the other hand, has sought to justify the impugned decision Annexure P-1 on the ground that condition imposed is reasonable. The State while denying the issuance of exemption notification Annexure P-6 under section 7 of 1936 Act contends that the petitioner was liable to pay entertainment tax for the period between 2004-2007. 8. After hearing learned counsel for the parties, it is seen that the exemption notification under section 7 is statutory in nature and is subjected only to one condition that the State certifies the entertainment activity commenced by the petitioner, falls within the expression “entertainment centres”. Undoubtedly, the amusement park which was established by the petitioner was one of the recognized entertainment centres. 9. However, there is nothing on record to indicate as to whether any certificate was issued by the State or any of its functionaries recognizing the amusement park established and run by the petitioner to be one of the entertainment centres as defined in the exemption notification dated 17.8.1995 (Annexure P-6). 10. However, it is noticeable that the State in its return has not denied the fact that any such certificate was issued in favour of the petitioner and thus, it can safely be presumed that the State impliedly recognized the amusement centre established and run by the petitioner to be one of the amusement centres. 11. The exemption notification under section 7 (Annexure P-6) is undoubtedly statutory in nature, having been issued by the State who has exclusive powers to do so by issuing general or special order. 11. The exemption notification under section 7 (Annexure P-6) is undoubtedly statutory in nature, having been issued by the State who has exclusive powers to do so by issuing general or special order. Annexure P-6, the exemption notification, is made subject to one condition of certification which has already been held by this Court to be impliedly fulfilled in the instant case. The impugned decision taken by the High Power Committee by imposing condition that petitioner shall deposit the entertainment fee collected from the visitors of the amusement park from 2004-2007 does not seem to be part of statutory exemption notification (Annexure P-6). Moreover the statutory notification has been issued by the State in the name and under the orders of the Governor by exercising its executive powers under Article 154 of the Constitution of India. If the State was required to make any alteration or impose any condition then it has to be done in the same manner and by the same authority. No such additional condition could be imposed by the High Court Committee. 12. Viewed from another angle, it is seen that Act of 1936 empowers the State to make rules under section 8 on various aspects which do not enable the State to make rules for delegating the power of exemption under said section upon any subordinate authority. 13. That being the legal position, the condition imposed by the impugned order issued by High Power Committee of refund/deposit of the entertainment fee collected from 2004-2007 for enabling availing of the exemption under Annexure P-6 is unjust and unlawful and is dehors the powers of the State under the Act of 1936. 14. Consequently, the petition stands allowed and the condition imposed in respect of amusement park run by the petitioner namely Sun City at Gwalior to the extent of imposing condition of refund/depositing of entertainment fee collected from 2004-07 stands quashed. As a necessary consequence, the RRC contained in Annexure P-2 paves the way of extinction. 15. No cost.