1959 (1) TMI 24 - SC - Indian Laws

Supreme Court upholds Mysore Cinematograph Tax Act 1951, emphasizing legality of entertainment taxes.

YV. SRINIVASAMURTHY & ORS. Versus STATE OF MYSORE & ANR.

The Supreme Court dismissed the appeals challenging the validity of the Mysore Cinematograph Shows Tax Act of 1951. The Court upheld the tax imposition ... Validity of the Mysore Cinematograph Shows Tax Act of 1951 (Mysore Act XVI of 1951) challenged Held that:- The only other argument advanced by learned counsel for the appellants is that even if the tax comes under entry 62, its quantum is so large that it destroys the appellants' business. This is a point which necessarily involves an investigation into facts and depends upon the evidence that may be adduced. No such evidence has been led. Further, as stated in the same judgment, the court has no concern with the wisdom of the legislature and that it would be a dangerous precedent to allow the views of the members of the court as to the serious consequences of excessive taxation to lead to a conclusion that the law is 'ultra vires'. Moreover, this is a point which was never urged before the High Court and no evidence was led in support of it and in the circumstances the appellants cannot be permitted to raise this new point at this final stage. Appeal dismissed. Issues:1. Challenge to the validity of the Mysore Cinematograph Shows Tax Act of 1951 under Art. 276(2) and Art. 14 of the Constitution of India.2. Interpretation of the Mysore Cinematograph Shows Tax Act, 1951 in relation to entries in List II of the Seventh Schedule to the Constitution.3. Argument regarding the quantum of tax levied under the Act and its impact on the appellants' business.Analysis:1. The appeals arose from writ petitions filed in the High Court of Mysore challenging the Mysore Cinematograph Shows Tax Act of 1951. The appellants contested the validity of the Act under Art. 276(2) and Art. 14 of the Constitution of India. The Full Bench of the Mysore High Court dismissed the writ petitions, leading to the present consolidated appeals before the Supreme Court.2. The tax under scrutiny was levied under Section 3 of the Mysore Cinematograph Shows Tax Act, 1951, which authorized taxation on cinematograph shows based on specified rates. The respondents argued that the Act fell under entry 62 of List II of the Seventh Schedule, allowing taxes on luxuries, entertainments, amusements, betting, and gambling. The appellants contended that the Act pertained to entry 60 of List II, covering taxes on professions, trades, callings, and employments. The Supreme Court referenced a previous judgment to support the respondents' position, emphasizing the legislative intent behind the tax imposition.3. Additional arguments were presented regarding the interpretation of entries in List II of the Seventh Schedule. The appellants highlighted entry 33, which includes theatres, dramatic performances, cinemas, sports, entertainments, and amusements. However, the Court rejected this argument, stating that the omission of specific terms in entry 62 did not limit the State Legislature's authority to impose taxes on related activities. The Court emphasized the broad scope of terms like 'entertainments' and 'amusements' in entry 62.4. The appellants raised concerns about the excessive quantum of tax levied under the Act, citing potential adverse effects on their business. However, the Court held that such arguments required factual evidence, which was not presented during the proceedings. Additionally, the Court noted that challenging the wisdom of the legislature's tax decisions was not within its purview. The appellants were barred from introducing new arguments at the final stage of the appeal, as the issue was not raised before the High Court.5. In conclusion, the Supreme Court dismissed the appeals and awarded one set of costs. The judgment upheld the validity of the Mysore Cinematograph Shows Tax Act of 1951, emphasizing the legislative competence and constitutional framework governing taxation on entertainment activities.