Hari Krishna Lal Vs. State of Bihar & Ors.
EmailAppeal: Civil Appeal No. 1530 of 1980.
(Arising out of SLP No.(15066/87)
(Arising out of SLP No.(15066/87)
Petitioner: Hari Krishna Lal
Respondent: State of Bihar & Ors.
Apeal: Civil Appeal No. 1530 of 1980.
(Arising out of SLP No.(15066/87)
(Arising out of SLP No.(15066/87)
Judges: K.N. SINGH & M.H. KANIA, JJ.
Date of Judgment: Apr 20, 1988
Head Note:
BIHAR ENTERTAINMENTS TAX ACT, 1948:
Section 3A, category 10(J) – Notification dated 14-8-1985 – Categorisation of the Cinema House for the purposes of taxation – Held that the order of the Commissioner (Commercial Taxes) was based on irrelevant considerations – Order quashed and matter to be considered again.
JUDGEMENT:
O R D E R
1. Special leave granted.
2. This appeal is directed against the order of the High Court of Patna, Ranchi Bench, dated 15.9.1987 dismissing the appellant’s Writ Petition under Article 226 of the Constitution challenging the categorisation of the appellant’s Cinema House for the purposes of taxation.
3. The appellant is owner of a cinema house situate in village Hosir in the development block Gomia in the State of Bihar. The State Government in exercise of its powers under Section 3A of the Bihar Entertainments Tax Act, 1948 classified the village Hosir in category 10(J) by a Notification dated 14.8.1985 as a result of in category 10(J) by a Notification dated 14.8.1985 as a result of which the appellant was liable to pay consolidated amount of tax @ 15% of the seating capacity of the cinema hall. The appellant challenged the validity of the categorisation by means of a Writ Petition before the High Court which was allowed and the matter was remanded to the Government for reconsideration with a direction that a speaking order may be passed. The Commissioner (Commercial Taxes) of Bihar thereafter considered the matter and by his order dated 12.5.1987 reiterated the earlier classification categorising the Cinema House in category 10(J). The appellant again approached the High Court by way of Writ Petition which was dismissed in limine by the Order dated 15.9.1987. Hence this appeal.
4. Section 3A of the Bihar Entertainments Tax Act, 1985 provides for consolidated payment of tax and runs as under:
“3A: Notwithstanding anything contained in the Act, the State Government by Notification may levy consolidated amount of tax exceeding 45% and not below 10% of the gross collection capacity for every show and such amount of tax shall be paid by the proprietor of an Entertainment to the State Government. Provided that the State Government shall for the purpose of levy of consolidated amount of tax classify places in categories for the fixation of such percentage and the rate of consolidated tax shall be uniformaly for a particular class of places. The State Government shall for the purpose of classification take into account the types of places, its location, population, industrial growth and type of markets.
Provided:- Further that the consolidated tax payable under this section shall not be less than the higher amount of the tax every show payable by the proprietor of an entertainment during any of the three proceedings years, under sub-section (1) or (5) of the Section 3 or under this Section.
Explanation:
Gross collection capacity shall mean the total amount calculated for total seating capacity of the theatre which shall include the admission fees, tax calculated on the basis of rate notified under surcharge for any privilege, right, facility, service, or things combined with the right of admission to any Entertainment.”
A perusal of the proviso indicates that while categorising the places of the Cinema House, the State Government is required to consider location of the village where cinema hall is situated taking into account the type of place, its location, population, industrial growth and type of markets. In the impugned order of the commissioner (Commercial Taxes) the population of the entire block of Gomia urban and rural area has been taken into account instead of village Hosir or its neighbouring villages. Gomia consists of a large number of villages and its total population is 1,29,562 while the population of village Hosir is 6,400 only. Further village Hosir is situate at a distance of 5 kilometres from Gomia Town. These aspects have not been considered by the Commissioner (Commercial Taxes) instead he has taken into account entire population of Gomia Block which was not a relevant consideration. The Commissioner (Commercial Taxes) failed to consider relevant considerations set out in the proviso to Section 3A of the Act and passed the impugned order on irrelevant considerations.
5. The High Court committed error in dismissing the writ petition in limine. We accordingly allow the appeal, set aside the order of the High Court and quash the order of the Commissioner (Commercial Taxes) dated 12.5.1987. We further direct the respondents to consider the matter again in the light of our observations. There will be no order as to costs.
1. Special leave granted.
2. This appeal is directed against the order of the High Court of Patna, Ranchi Bench, dated 15.9.1987 dismissing the appellant’s Writ Petition under Article 226 of the Constitution challenging the categorisation of the appellant’s Cinema House for the purposes of taxation.
3. The appellant is owner of a cinema house situate in village Hosir in the development block Gomia in the State of Bihar. The State Government in exercise of its powers under Section 3A of the Bihar Entertainments Tax Act, 1948 classified the village Hosir in category 10(J) by a Notification dated 14.8.1985 as a result of in category 10(J) by a Notification dated 14.8.1985 as a result of which the appellant was liable to pay consolidated amount of tax @ 15% of the seating capacity of the cinema hall. The appellant challenged the validity of the categorisation by means of a Writ Petition before the High Court which was allowed and the matter was remanded to the Government for reconsideration with a direction that a speaking order may be passed. The Commissioner (Commercial Taxes) of Bihar thereafter considered the matter and by his order dated 12.5.1987 reiterated the earlier classification categorising the Cinema House in category 10(J). The appellant again approached the High Court by way of Writ Petition which was dismissed in limine by the Order dated 15.9.1987. Hence this appeal.
4. Section 3A of the Bihar Entertainments Tax Act, 1985 provides for consolidated payment of tax and runs as under:
“3A: Notwithstanding anything contained in the Act, the State Government by Notification may levy consolidated amount of tax exceeding 45% and not below 10% of the gross collection capacity for every show and such amount of tax shall be paid by the proprietor of an Entertainment to the State Government. Provided that the State Government shall for the purpose of levy of consolidated amount of tax classify places in categories for the fixation of such percentage and the rate of consolidated tax shall be uniformaly for a particular class of places. The State Government shall for the purpose of classification take into account the types of places, its location, population, industrial growth and type of markets.
Provided:- Further that the consolidated tax payable under this section shall not be less than the higher amount of the tax every show payable by the proprietor of an entertainment during any of the three proceedings years, under sub-section (1) or (5) of the Section 3 or under this Section.
Explanation:
Gross collection capacity shall mean the total amount calculated for total seating capacity of the theatre which shall include the admission fees, tax calculated on the basis of rate notified under surcharge for any privilege, right, facility, service, or things combined with the right of admission to any Entertainment.”
A perusal of the proviso indicates that while categorising the places of the Cinema House, the State Government is required to consider location of the village where cinema hall is situated taking into account the type of place, its location, population, industrial growth and type of markets. In the impugned order of the commissioner (Commercial Taxes) the population of the entire block of Gomia urban and rural area has been taken into account instead of village Hosir or its neighbouring villages. Gomia consists of a large number of villages and its total population is 1,29,562 while the population of village Hosir is 6,400 only. Further village Hosir is situate at a distance of 5 kilometres from Gomia Town. These aspects have not been considered by the Commissioner (Commercial Taxes) instead he has taken into account entire population of Gomia Block which was not a relevant consideration. The Commissioner (Commercial Taxes) failed to consider relevant considerations set out in the proviso to Section 3A of the Act and passed the impugned order on irrelevant considerations.
5. The High Court committed error in dismissing the writ petition in limine. We accordingly allow the appeal, set aside the order of the High Court and quash the order of the Commissioner (Commercial Taxes) dated 12.5.1987. We further direct the respondents to consider the matter again in the light of our observations. There will be no order as to costs.
