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2020 DIGILAW 273 (AP)

Manasa Theatre v. State of A. P.

2020-03-24

BATTU DEVANAND, C.PRAVEEN KUMAR

body2020
JUDGMENT : C. Praveen Kumar, J 1. The present appeals are filed under Section 9E of A.P. Entertainment Tax Act, 1939 (for short, ‘the Act’) questioning the orders dated 26.09.2018 passed by the Appellate Deputy Commissioner, Tirupati, in ADC Order Nos.3634/28-09-2018, 3634/28-09-2018, 3633/28-09-2018, 3632/28-09-2018, 3635/28-09-2018, 3632/28-09-2018, 3634/28-09-2018, 3635/28-09-2018, 3635/28-09-2018, 3633/28-09-2018, 3633/28-09-2018 and 3632/28-09-2018 respectively. 2. The facts in issue are as under : The appellant theatres -Kavali management, have screened films and filed weekly returns in Form-V along with Daily Collection Reports under Andhra Pradesh Entertainment Tax Act, 1939. The details of which are reflected in the order. It is said that exhibitors have exhibited high budget/dubbing films in the guise of low budget films and thereby evaded entertainment tax to the Government, violating Section 4(1-A) of Andhra Pradesh Entertainment Tax Act and conditions of G.O.Ms.No.604 (Revenue (CT-IV) Department, dated 22.4.2008. After careful consideration of the objections filed by the managers of the theaters, Form-A was issued directing to pay the balance of tax after deducting the tax paid. Orders passed by the Entertainment Tax Officer, Kavali, came to be challenged before the Appellate Deputy Commissioner, who, after going through the facts in issue and also considering the objection raised with regard to the applicability of Section 4 vis-à-vis Section 9, dismissed the appeals. Challenging the same, these appeals are filed under Section 9E of the Act. 3. The main ground urged by the learned counsel for the appellants is that in the facts and circumstances of the case, entertaining an application under Section 4 of the Act without invoking Section 9-A of the Act is illegal and incorrect. The second ground urged by the learned counsel for the appellant is that the appellants herein are entitled to certain exemptions under the G.O., which were not properly brought to the notice of the authorities. These two objections were dealt with by the appellate authority and negatived the same. 4. In so far as entitlement to avail concessions or exemptions under the entertainment tax, it is to be noted that though notices were given to the appellants on four occasions on 13.7.2015, 13.6.2016, re-assessment show cause notice on 10.5.2017 and final notice on 12.6.2017, the appellants herein failed to file objections. The material on record show that if the appellants intend to differ with the proposal, they have to follow the conditions laid down in G.O.Ms.No.604, dated 22.4.2008. The material on record show that if the appellants intend to differ with the proposal, they have to follow the conditions laid down in G.O.Ms.No.604, dated 22.4.2008. They have to file documentary evidence of certified copy of the feature film/low budget film along with certified copy of certification obtained from A.P. Film Development Corporation to the effect the feature film/low budget film is produced in the State of Andhra Pradesh. The material indicate that the exhibitors should inform the Entertainment Tax Officer in advance, in writing, the particulars of screening the feature film/low budget film produced in A.P. in the application form represented in G.O.Ms.No.604, dated 22.4.2008. It is clear from the record that appellants neither filed any objections nor filed any documentary evidence to contradict the movies screened as per the UFO, Chennai, even after receiving the detailed date wise/movie wise information furnished by the Entertainment Tax Officer, Kavali. Therefore, the argument of the learned Government Pleader that appellants are not entitled for any exemptions cannot be brushed aside. 5. At the same time, learned counsel for appellants would contend that if a reasonable opportunity is given to appellants, they will file all the objections and documentary evidence contradicting the movies screened as per the UFO, Chennai. 6. In so far as the applicability of Section 4 and Section 9 of the Act is concerned, it will be useful to refer to Section 4(1-A) and Section 9-A of the Act, which are as under : Section 4(1-A) : There shall be levied and paid to the state government a tax on the gross collection capacity on every show (hereinafter referred to as the Entertainments Tax) in respect of entertainments held in the theatres specified in column (2) of the table below and located in the local areas specified in the corresponding entry in column (1) of the said table, calculated at the rates specified in the corresponding entry in column (3) thereof for the number of shows prescribed therein for every week. Local Authority Theatre Rate of tax on the gross collection capacity per show (1) (2) (3) (a) First Grade Municipality All categories of theatres 10% of the gross collection capacity per show multiplied by 21. Local Authority Theatre Rate of tax on the gross collection capacity per show (1) (2) (3) (a) First Grade Municipality All categories of theatres 10% of the gross collection capacity per show multiplied by 21. (b) Second Grade Municipality All categories of theatres 9% of the gross collection capacity per show multiplied by 21 (c) Third Grade Municipality All categories of theatres 8% of the gross collection capacity per show multiplied by 17 (d) Gram Panchayats townships and any local authorities (1) with a population of 15,000 and above (i) permanent and semi-permanent (ii) Touring and Temporary 7% of the gross collection capacity per show multiplied by 14 7% of the gross collection capacity per show multiplied by 10. (2) with a population of 7,500 and above but below of 15,000. (i) permanent and semi-permanent (ii) Touring and Temporary 6% of the gross collection capacity per show multiplied by 14. 6% of the gross collection capacity per show multiplied by 10. (3) with a population of less than 7,500 (i) permanent and semi-permanent (ii) Touring and Temporary 5% of the gross collection capacity per show multiplied by 14. 5% of the gross collection capacity per show multiplied by 7. “Section 9A : Payment for Admission, etc., escaping assessments : “(1) Where, for any reason any entertainment show has escaped assessment to tax under section 4 or section 4A, the prescribed authority may, subject to the provisions of sub-section (3) and at any time within such period as may be prescribed, assess to the best of its judgment the tax due on such entertainment show under section 4 or section 4A, as the case may be, after making such enquiry as it considers necessary and after giving the proprietor a reasonable opportunity to show cause against such assessment (2) Where, for any reason any entertainment show has been assessed at a rate lower than the rate at which it is assessable under section 4 or Section 4-A, as the case may be, the prescribed authority may, subject to the provisions of subsection (3) and at any time within such period as may be prescribed, re-assess the tax due on such payment or entertainment show under section 4 or Section 4-A as the case may be, after making such enquiry as it may consider necessary and after giving the proprietor a reasonable opportunity to show cause against such re-assessment. (3) When making an assessment to the best of Judgment under sub-section (1) or sub-section (2) the prescribed authority may also direct the proprietor to pay in addition to the tax assessed, a penalty as specified in sub-section (4). (4) The penalty leviable under sub-section (3) shall,-- (a) in a case where the prescribed authority is satisfied that the failure of the proprietor to disclose the whole or part of the particulars correctly or to submit the return before the prescribed date, was willful, not exceed one and half times the entertainments tax or the tax on entertainment shows due; (b) in a case where such failure was not wilful, not exceed on half of such tax : Provided that where such failure occurred due to a bonafide mistake on the part of the proprietor, no such penalty shall be levied. Provided further that no penalty under this sub-section shall be imposed unless the proprietor affected has had a reasonable opportunity of showing cause against such imposition.” 7. A reading of the two provisions makes it clear that Section 9-A applies when any entertainment shows escaped assessment of tax under Section 4 or 4-A. In such an event, the prescribed authority shall assess to the best of its judgment, the tax due on such entertainment shown under section 4 or section 4A after making such enquiry as it considers necessary within a limited period. Section 9-A does not apply as no assessment was done previously and the appellant is not assessed under Section 4 or Section 4(1-A) or Section 4A earlier. If any entertainment tax was assessed under section 4 or section 4(1-A), and if tax escaped the assessment in such past assessment, the invocation of section 9-A comes into picture so as to assess the escaped tax. Since, the proceedings of the Entertainment Tax Officer are assessed for the first assessment, the provisions of Section 9A have no relevance. In the instance case, enquiry, as required under Section 9, has been carried out by giving a notice, but no objections were filed. Therefore, it cannot be said there was any illegality in invoking Section 9, more so, when there is escaped assessment. 8. The main plea of the learned counsel for appellants appears to be that if an opportunity is given to appellants, they would fulfil the requirements by claiming exemptions or concessions as per the said G.O. 9. Therefore, it cannot be said there was any illegality in invoking Section 9, more so, when there is escaped assessment. 8. The main plea of the learned counsel for appellants appears to be that if an opportunity is given to appellants, they would fulfil the requirements by claiming exemptions or concessions as per the said G.O. 9. The same is strongly opposed by the learned Government Pleader for Commercial Taxes contending that enough opportunities have been given to appellants, but, in spite of the same, they never utilized. She also contends that there is any amount of doubt as to whether really the appellants are entitled to any exemptions or concessions as urged by them. According to her, even if such exemptions or concessions are given, still appellants would be liable to pay certain amounts. 10. A perusal of the orders impugned shows that it is not as if the appellants have not paid any money. They have paid some amount which was adjusted and thereafter the amount due is reflected in the orders. Having regard to the facts and circumstances of the case and with a view to give the appellants an opportunity, we feel that it is a fit case where the matter can be remanded back directing the appellants to fulfil the requirements as pleaded here on certain terms and conditions within a period of four weeks from today. In which event, the primary authority shall pass appropriate orders within a period of four weeks thereafter. 11. As the orders of the appellate authority indicate that the appellants have paid some amounts out of disputed amounts, and with a view to give an opportunity to appellants (only to the extent of producing material for availing concessions or exemptions) the matter shall be remanded back, setting aside the orders under challenge, subject to appellants paying ½ (half) of the demanded (disputed) amount, which would be inclusive of the disputed amount already paid. Further, the appellants shall comply with the order within four weeks from today, in which event the primary authority shall pass orders in accordance with law within four weeks thereafter. If the appellants fail to deposit the amount within four weeks, as directed above, the authorities shall proceed further basing on the earlier orders passed. 12. With the above directions, the Appeals are allowed. No orders as to costs. If the appellants fail to deposit the amount within four weeks, as directed above, the authorities shall proceed further basing on the earlier orders passed. 12. With the above directions, the Appeals are allowed. No orders as to costs. Consequently, interlocutory applications pending, if any, shall stand closed.