Compounded tax liability remains fixed in full despite curfew-related closure; unilateral deduction and penalty demand upheld.

Once liability is compounded under section 3B of the Bihar Entertainments Tax Act, the fixed compounding fee remains payable in full despite temporary closure of cinema shows due to curfew. The compounding scheme makes payment independent of the number of shows actually exhibited, so the proprietor cannot unilaterally claim remission or proportionate deduction absent statutory authority. Where the assessee deducted part of the fixed amount on its own, the authority was entitled to demand the shortfall and impose penalty for breach of the compounding obligation. The remission principle from an excise case was held inapplicable because it did not involve a compounding arrangement.

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Issues: (i) whether a proprietor who had opted to compound liability under section 3B of the Bihar Entertainments Tax Act, 1948 could claim remission or proportionate deduction from the fixed compounding fee for the period during which cinema shows could not be exhibited because of a curfew; and (ii) whether the authority could lawfully demand the deducted amount and impose penalty for non-payment of the full compounding fee.

Issue (i): Whether a proprietor who had opted to compound liability under section 3B of the Bihar Entertainments Tax Act, 1948 could claim remission or proportionate deduction from the fixed compounding fee for the period during which cinema shows could not be exhibited because of a curfew.

Analysis: Section 3B permits the State Government, in lieu of tax payable under section 3A, to allow a proprietor to pay a fixed amount on prescribed conditions. The scheme of compounding makes the fixed payment independent of the actual number of shows held. Once the assessee elects to come within the compounding scheme, the obligation undertaken is to pay the fixed compounding fee irrespective of temporary closure or inability to exhibit shows. The closure of the theatres for a few days does not create a right to reduce the amount unilaterally, and the remission principle drawn from the cited excise case was inapplicable because that case did not involve compounding.

Conclusion: The claim for remission or proportionate deduction from the compounding fee was not sustainable and was decided against the assessee.

Issue (ii): Whether the authority could lawfully demand the deducted amount and impose penalty for non-payment of the full compounding fee.

Analysis: The assessee had on its own deducted amounts from the compounding fee, although no provision in the Act or the Rules authorised such deduction. The statutory obligation under the compounding arrangement remained binding, and section 16 empowered the authority to impose penalty for breach of the obligation to pay the amount fixed under the compounding scheme. The demand for the shortfall and the penalty order were therefore within jurisdiction and could not be treated as illegal.

Conclusion: The demand for the deducted amount and the penalty order were upheld and were decided against the assessee.

Final Conclusion: The statutory compounding election bound the petitioners to pay the fixed fee in full, and neither curfew-induced closure nor self-adjustment of the payable amount entitled them to relief.

Ratio Decidendi: Once liability is compounded under the statute, the fixed compounding fee becomes an absolute obligation unaffected by the actual number of shows or temporary closure, and no unilateral remission or deduction can be claimed in the absence of statutory authority.

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