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Krishna Talkies Etah v. State Of U.P. And Another - WRIT TAX No. 423 of 1997 [2004] RD-AH 669 (27 August 2004)


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Civil Misc. Writ Petition No. 423 of 1997


Krishna Talkies, Etah. Vs. State of U. P. and another.


Civil Misc. Writ Petition no. 624 of 1997


Krishna Talkies, Etah. Vs. State of U. P. and another.

Hon'ble R. K. Agrawal, J.

Hon'ble K. N. Ojha, J.

Both these connected writ petitions have been filed under Article 226 of the Constitution of India. In Writ Petition no. 423 of 1997 a prayer has been made to issue writ, order or direction in the nature of certiorari for quashing the order dated 26.4.1997 (Annexure no. 8 to the writ petition) passed by the respondent no. 2, Commissioner, Entertainment Tax, U. P. by which order was passed to realize Rs. 58029.17 from the petitioner. In Writ petition no. 624 of 1997 the same prayer was made for quashing order/notice dated 23.8.1997 issued by the Commissioner, Entertainment Tax, U. P. (Annexure no. 12 to the writ petition) whereby the amount for recovery of Rs. 58029.17 was enhanced to Rs. 1,04,452.50.

We have heard Sri A. N. Srivastava, learned counsel for the petitioner and Sri K. M. Sahai, learned Standing counsel for the respondents.

Briefly stated facts giving rise to these writ petitions are as follows:

The petitioner is a licensee to operate cinema known as Krishna Talkies, Etah. The license has been granted under the U. P. Entertainments and Betting Tax Act, 1979 (hereinafter referred to as the Act). It started to function since 1973. There are two classes in the Cinema house, Balcony class and First class. The Cinema house has the arrangement of Centrally Cooling Plant for the convenience of cine-goers. The entertainment tax is charged at the rate of 125% of entry fee. Under the orders issued by the State Government, it started realising maintenance charges of Rs. 1/- per ticket from the cine goers. The dispute is that maintenance charges have not been utilized for the maintenance of the cinema house as many short-comings were found by the Entertainment Tax Inspector when he made inspection of the cinema house on 20.11.1994. Consequently notice was issued by the Deputy Commissioner, Entertainment Tax, to the petitioner on 2.2.1995. A copy of the notice is at Annexure no. 1 of the first writ petition.

According to the respondents Entertainment Tax Inspector made inspection of the cinema house on 20.11.1994 and found the following shortcomings in the maintenance of the cinema house:

1. Four seats of 1st class and three seats of Balcony class were found in damaged condition. Besides it racksin of thirty seats of Balcony were in turned condition.

2. Urinal and bathrooms were dirty.

3. Chaff of groundnut and dirty materials were found in the lobby and verandah of the cinema hall.

4. Two of the exhaust fans were not in working condition.

5. Wooden articles and many other articles, which were of no utility were found beneath the stairs of the balcony.

6. Lady bathrooms were locked.

7. Lime etc. were not found in the spit pots.

Consequently notice no. 294 dated 2.2.1995 was sent to the petitioner that the maintenance charges realized from the cine-goers were not being used. The notice required the petitioner to explain as to why the tax be not fixed and realized from the petitioner according to Section 3A(3) of the Act. The petitioner submitted reply on 17.2.1995 that the Inspector did not mention any shortcoming in the maintenance at the time of inspection. It was also written in the reply that in note dated 21.11.1994 the number of damaged chairs and racksine were mentioned less than that mentioned in the notice. Other irregularities were denied and it was explained that cinema house was properly maintained.

The Entertainment Commissioner, U. P. vide order no. 8424 dated 22/26.4.1997 considered the reply and held that the contention of the petitioner was not maintainable and passed order for recovery of Rs. 58029.17, the amount of entertainment tax, which was not utilized. The order was passed under Section 3A(3) of the Act.

Section 14 of the Act provides for "Inspections". It reads as follows:

14(1) The Commissioner or any other officer authorized in this behalf by the Commissioner or by the State Government, in respect of the whole of Uttar Pradesh, and the District Magistrate or any other officer authorized by him, in respect of his district, may, with such assistance as may be necessary, enter, inspect and search any place of entertainment while the entertainment is proceeding, and any place ordinarily used or suspected to be used as a place of entertainment or for keeping records concerned therewith, at any reasonable time with a view to securing compliance of the provisions of this Act or the rules made there under.

(2) Any officer referred to in sub-section (1) may require the proprietor to produce for inspection before him or any other officer not below the rank of Inspector, all books of accounts and other records, relating to the entertainment as such officer may consider necessary.

(3) Any officer referred to in sub-section (1) or sub-section (2) may take in his possession all such books of accounts and other records relating to the entertainment as he may consider necessary.

(4) The proprietor of such place of entertainment shall give every, reasonable assistance to every officer referred to in sub-sections (1) and (2).

(5) Every officer referred to in sub-sections (1) and (2) shall be deemed to be a public servant within the meaning of Section 21 of the Indian Penal Code.

(6) Every officer referred to in sub-sections (1) and (2) may require a person who is suspected of contravening any of the provisions of this Act or the rules made thereunder to declare immediately his name and address, and if such person refuses or fails to give his name and address, or if the officer so empowered or authorized reasonably suspects him of giving a false name or address, he may arrest him and detain or get him detained at the nearest Police Station and the provisions of Section 42 of the Code of Criminal Procedure, 1973 shall apply."

Thus the Entertainment Tax Inspector, authorized by the District Magistrate, is competent to make inspection of the cinema house and report the matter to the District Magistrate and the Entertainment Commissioner may pass order.

The petitioner placed reliance on a judgment delivered by this Court in Civil Misc. Writ Petition no. 1187 of 1993, Sarju Chitra Mandir and another Vs. Commissioner of Entertainment Tax and others, in which it was held that if on one occasion chairs were found in broken condition, it cannot be taken that the cinema house was not being properly maintained and the fund of maintenance was not being properly utilized because cine-goers usually cause damage to furniture and other articles of the cinema house. In instant case irregularity in maintenance of cinema hall was not found on only one date but on inspection it was found on many dates. Prior to 20.11.1994 inspection was made on 3.1.1994, 3.2.1994, 14.2.1994, 23.5.1994 and 13.6.1994 and lack of maintenance was found and irregularities were specifically mentioned by the Entertainment Inspector.

In this case first when notice was sent to the petitioner, he denied that any inspection was made by any Entertainment Inspector on 20.11.1994. The inspection was denied on 17.2.1995 in writing and later on by letter dated 13.8.1996 inspection of the petitioner by Sri V. K. Jain, Entertainment Tax Inspector on 20.11.1994 at 3.20 P.M. and at 5.45 P.M. was admitted, but it was denied that any irregularity was found. Thereafter when record about maintenance of the petitioner was demanded from April 1994 to November 1994 vide letter dated 31.1.1997 it was reported by the District Magistrate, Etah, vide letter dated 18.2.1997 that register about maintenance of the petitioner was not produced in the office of the District Magistrate with the result it could not be sent to the entertainment tax department and adverse presumption was drawn that the register was not being produced, as it was not being properly maintained. Later on details of the fund collected and expenses made on maintenance of the Cinema house was demanded by the office of the Entertainment Commissioner vide letter dated 17.5.1995, but the proprietor of the cinema furnished details vide his letter dated 22.6.1995 from 20.10.1994 to 19.11.1994 only. It was written that Rs. 39852/- was obtained as maintenance fee and an amount of Rs. 21112/- only was spent. Photostat copies of bills and vouchers in support of the expenditure of Rs. 21112/- was not filed. Still it was accepted. The total amount, which found place in the bills and vouchers furnished by the petitioner was only Rs. 18812/- and not of Rs. 21112/-. From it also the Entertainment Commissioner rightly inferred that expenses of Rs. 21040/- out of Rs. 39852/- was not utilized and thus irregularity was committed in spending the maintenance allowance. It means the maintenance allowance realized from the cine-goers was not utilized and therefore, the order passed for recovery of Rs. 58029.17 and directing it to deposit in the head Account no. 0045 entertainment tax and betting tax through treasury challan is in accordance with Rules.

Section 15 of the Act provides for suspension or revocation of licence or permission for entertainment. It contemplates that before passing any order against the proprietor of the cinema house opportunity must be given to furnish explanation. This shows that if any order is passed against the proprietor of the cinema house, opportunity of being heard is his right. The order for depositing of Rs. 58029.17 P. was passed after issuing notice to the petitioner and after consideration of the explanation submitted by it. But the subsequent order passed by the Entertainment Commissioner for depositing Rs. 1,04,452.50 P. under head account no. 0045 was passed on the basis of judgment delivered in writ petition no. 1187 of 1993, Sarjoo Chitra Mandir, Rasra, Ballia Vs. State of U. p. on 11.1.1996 and in writ petition no. 502 of 1997, Ratan Talkies, Haridwar Vs. State of U. P. decided on 25.7.1997 by this Court. This order was passed without affording any opportunity to the petitioner therefore the order directing to deposit Rs. 1,04,452.50 cannot be affirmed by this Court.

In view of above discussion Writ Petition no. 423 of 1993 fails and it is dismissed and it is held that the petitioner is liable to deposit Rs. 58029.17P as directed by the Entertainment Commissioner. The Writ Petition no. 624 of 1997 is allowed and order for deposit of Rs. 1,04,452.50 is set aside. However, it will be open to the authorities to pass a fresh order in accordance with law after giving an opportunity of hearing to the petitioner. In view of part success the parties shall bear their own costs of these petitions.




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