Gazette publication controls municipal grade for entertainments tax, so enhanced levy cannot apply before notification.

A municipality acquires a higher grade only when the notification is published in the Andhra Pradesh Gazette, and entertainments tax linked to that grade cannot be levied for an earlier period. The text explains that tax under sections 4 and 5 of the A.P. Entertainments Tax Act depends on the theatre's municipal location and grade, and that the option exercised under section 5 operates for the financial year. Because Kamareddy's upgradation to second grade was gazetted only on 11 April 1988, the enhanced rate could not be demanded from 7 September 1987. The demand notices were therefore without legal basis and were quashed.

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Issues: Whether the enhanced entertainments tax rate applicable to theatres situated in a second grade municipality could be demanded from 7 September 1987, when the municipal upgradation had not yet been published in the Gazette, but only from the date of Gazette publication on 11 April 1988.

Analysis: Under the A.P. Municipalities Act, a municipality attains a particular grade only upon notification published in the Andhra Pradesh Gazette. The entertainments tax under sections 4 and 5 of the A.P. Entertainments Tax Act depends on the location and grade of the municipality in which the theatre is situated. The option exercised under section 5 continued only for the financial year, and the authority could vary the tax during the option period only if the local area had been upgraded. Since the notification declaring Kamareddy as a second grade municipality was published only on 11 April 1988, the local area could not be treated as upgraded for the earlier period, and the demand issued before such publication lacked legal basis.

Conclusion: The enhanced demand from 7 September 1987 was invalid and the demand notices were rightly quashed in favour of the petitioners.

Ratio Decidendi: A municipality acquires the notified grade only from the date of Gazette publication, and enhanced tax linked to that grade cannot be levied for an earlier period unless the upgradation has been duly notified.

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