1991 (11) TMI 238 - HC - VAT and Sales Tax

Court rules demand notice for entertainment tax illegal, allows reduced rate due to seating capacity modification.

The Court ruled in favor of the petitioner, holding that the demand notice for entertainment tax at a higher rate was illegal and invalid. Despite an ... - Issues:Challenge to the demand for entertainment tax at a higher rate contrary to a court judgment.Analysis:The petitioner was granted a permit to pay entertainment tax at a specific rate for a particular period. Subsequently, the seating capacity was reduced, leading to a modification of the tax amount payable. However, the Commercial Tax Officer later demanded tax at the original higher rate, contrary to the court's previous judgment allowing the petitioner to pay at the reduced rate. The petitioner challenged the validity of this demand through a writ petition.The Court acknowledged that an amendment to the relevant rule did not empower the authorities to act against the court's judgment and demand payment at the higher rate. Despite an audit objection and retrospective amendment of the rule, the Court held that the petitioner was entitled to pay tax at the reduced rate as per the previous judgment. Therefore, the Court deemed the demand notice for the higher tax rate as illegal and invalid, ultimately quashing it.The Court did not delve into other contentions raised in the writ petition, as the primary issue of the demand notice's legality was resolved in favor of the petitioner. Consequently, the writ petition was allowed, with no costs imposed.