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of <h1>Court deems circular on entertainment tax assessment arbitrary and ultra vires, orders fresh review.</h1> <h3>State of Rajasthan and another Versus Rajasthan Taxation Tribunal and others</h3> State of Rajasthan and another Versus Rajasthan Taxation Tribunal and others - [2002] 127 STC 137 (Raj) Issues:Challenge to circular issued by Commissioner of Commercial Taxes for entertainment tax assessment under Rajasthan Entertainment (and Adver tisements) Tax Act, 1957.Analysis:The judgment arose from an order passed by the Rajasthan Taxation Tribunal quashing a circular issued by the Commissioner of Commercial Taxes related to assessment of entertainment tax under the Rajasthan Entertainment (and Adver tisements) Tax Act, 1957. The circular aimed to enhance tax assessment by estimating minimum receipts at 50% of sitting capacity, disregarding actual occupancy. The Court found the circular arbitrary and contrary to statutory provisions. It emphasized that the assessing officer must base assessments on material evidence, not arbitrary directives. The Court held that the circular violated principles of fair procedure, statutory functions, and the mandate of duty to act fairly under Article 14 of the Constitution. The Court concluded that the circular was ultra vires the Commissioner's authority, and assessment orders based on it were invalid.The Court criticized the circular for compelling assessing officers to assess tax at a minimum estimated level, irrespective of actual occupancy, without legal basis. It noted that the circular infringed on the discretion of assessing officers and imposed a compulsive presumption against taxpayers. The Court highlighted that the circular's directions lacked a legal foundation and were issued beyond the Commissioner's statutory powers. The judgment emphasized that assessments should be made based on relevant material, not arbitrary mandates.The Court rejected the Revenue's argument that the circular was not explicitly referenced in assessment orders. It noted that the Deputy Commissioner and Additional Commissioner's findings indicated that assessments were influenced by the circular, even if not expressly mentioned. The Court emphasized that the circular's impact on assessment orders rendered them invalid, regardless of other reasons cited by the assessing officer. It concluded that the circular's unauthorized directives tainted the assessment process and necessitated setting aside and remanding the cases for fresh assessment in accordance with the law.In conclusion, the Court held that the impugned circular was ultra vires the Commissioner's authority, violated statutory provisions, and contravened Article 14 of the Constitution. The judgment dismissed all petitions challenging the circular and upheld the Tribunal's decision to quash the circular and remand assessment orders for fresh consideration in line with legal requirements.
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