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M/S Prabhat Talkies And Another v. State Of U.P. & Others - WRIT TAX No. 1903 of 2002 [2005] RD-AH 237 (24 January 2005)


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Court no. 55

Civil Misc. Writ Petition no. 1903 of 2002.

M/S Prabhat Talkies at Chakiya, Chandauli & another ... Petitioners.


State of U. P. and others. ... Respondents.

Hon'ble Rajes Kumar, J.

The present petition is being filed challenging the order of State Government dated 25.5.2002 by which, a sum of Rs.20,000/- towards penalty levied had been confirmed.

The brief facts of the case are that the petitioners were running permanent Cinema Theatre in the name of Prabhat Talkies at Cakiya District Chandauli and have been granted license by the District Magistrate, Chandauli under the provisions of U. P. Entertainment and Betting Tax Act, 1979 (hereinafter referred to as ''Act').  On 11.6.2001 the Cinema Hall of the petitioners were inspected by the Entertainment Tax Inspector, in which, it was found at 1.40 P. M. that Form-B was not prepared and the same was not found in account of Talkies.  Consequent to the inspection, an order was passed on 16.2.2001 by the District Magistrate, in which, it was said that by not preparing Form-B, provisions of Rule 13 (2) of the Act has been violated which was punishable crime under Section 30 of the Act.  It has also been stated that creating hindrance in the inspection was also violation of Section 14 which was punishable under Section 29 of the Act.  In reply to the aforesaid notice dated 16.2.2001, petitioners filed explanation on 18.6.2001.  In the explanation, it was stated that the Entertainment Inspector had falsely written that the Form-B was not filled within time as provided by law and no illegality or irregularity was found in executing the film or tax evasion.  District Magistrate after considering the reply of the petitioner, levied penalty at Rs.20,000/- under Section 12 of the Act vide order dated 05.7.2001.  Being aggrieved by the said order, petitioners filed appeal before the respondent no. 2 which was dismissed by the impugned order.

Heard Counsel for the parties.

Learned Counsel for the petitioners has not disputed the facts stated in the impugned order and violation of provisions of the Act.  The short submission of learned Counsel for the petitioners are that unless the authority concern assessed petitioners to the best of his judgment amount of tax due, the penalty could not be imposed under Section 12(2) of the Act independently.  He submitted that the penalty can only be imposed when the tax would have been assessed to the best of his judgment.  He submitted that the word used in Section 12 of the Act "may also impose a penalty" means that the imposition of penalty could be alongwith the assessment of the amount of tax while in the present case, tax had not been assessed and only penalty had been levied illegally.  Learned Standing Counsel submitted that the word "may also impose a penalty" under Section 12 means that apart from having a power to assess to the best of his judgment the amount of tax, authority has also power to impose penalty and this power can be exercised independently and not necessarily to be alongwith the assessment.

I have considered the rival submissions of the parties and in my opinion, argument of learned Counsel for the petitioners have no force.  Section 12 of the Act reads as follows:-

Section 12- Assessment of Tax-(1) Where the Commissioner of the District Magistrate is satisfied that the proprietor of an entertainment-

(a) has failed to give information as required under sub section (1) of Section 5; or

(b) has failed to prepare or to submit true and full returns in the prescribed forms ; or

[c] possesses  or has used duplicate tickets ; or

(d) has fraudulently evaded or attempted to evade, the payment of tax due in any manner whatsoever,

he shall after giving the proprietor a reasonable opportunity of being heard, assess to the best of his judgment, the amount of the tax due from the proprietor, and may also impose a penalty not exceeding one thousand rupees,

Provided that where either of the aforesaid officers has commenced a proceeding under this sub section the other of them shall have no jurisdiction to proceed subsequently in respect of the same matter and any such subsequent proceeding, if commenced, shall be of no effect and shall be dropped.

(2) Any person aggrieved by an order under sub section (1) may, within fifteen days from the date of service of such order, prefer an appeal to the State Government in such manner as may be prescribed, and the order of the appellate authority shall be final.

In Section 12 of the Act, authority concern has two power (i) to assess to the best of his judgment, the amount of the tax due (ii) to impose penalty.  The word "may also impose" does not mean that the imposition of penalty can only be followed by the assessment and it could not be imposed independently.  In my opinion, both the powers could be exercised independently.

In the result, petition fails and is accordingly dismissed.




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