Liability for Entertainment Duty Imposed on Proprietor, Not Visitor. Compliance with Prescribed Collection Method Required

The High Court held that the liability for payment of entertainment duty is imposed upon the proprietor, not the visitor. The method of collection of entertainment duty prescribed by the Act must be followed, despite any hardships faced by the proprietors. The Court emphasized that once assessments are made and payments accepted, the State cannot reopen concluded assessments to levy additional taxes or duties. The appeals were dismissed, except for the amount claimed for a specific period, with no costs awarded.

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Issues Involved:
1. Validity of the memorandum dated January 11, 1962.
2. Liability for payment of entertainment duty.
3. Method of collection of entertainment duty.
4. Reopening of assessments already made.

Issue-wise Detailed Analysis:

1. Validity of the memorandum dated January 11, 1962:
The appellants challenged the validity of the memorandum dated January 11, 1962, which directed that entertainment duty should be charged on the total amount payable by the person buying the ticket, including any sum charged separately by way of duty. The High Court rejected the petitions challenging this memorandum, and this appeal was preferred against that order.

2. Liability for payment of entertainment duty:
The primary issue was whether the liability for payment of entertainment duty was on the visitor or the proprietor. The court held that the statutory liability to pay the entertainment duty is imposed upon the proprietor and not on the visitor. The proprietor is permitted by the Act to collect entertainment duty on the net amount receivable by him, but he does not become an agent for the Government. The charge is by section 3 on payments received by the proprietor for admitting visitors to entertainment. The liability for payment of the duty is imposed upon the proprietor and not upon the visitors to the theatre.

3. Method of collection of entertainment duty:
The method of collection of entertainment duty was prescribed by the Act and the Rules framed thereunder. Under section 4(1), on the ticket for admission to any entertainment, an impressed, embossed, engraved, or adhesive stamp issued by the State Government of the value specified in section 3 must be affixed. The proprietor pays the entertainment duty determined in the manner provided by clauses (a), (b), and (c) of sub-clause (2) of section 4. The court observed that the method of levy of entertainment duty from the proprietors involves some hardship, as the proprietor will never be able to collect the full entertainment duty from the visitor. A part of the duty payable by him will have to come out of the amount received by him as a net charge for the ticket. However, the court held that questions of hardship cannot justify departing from the provisions of sections 3 and 4 of the Act.

4. Reopening of assessments already made:
The court noted that between March 18, 1960, and January 11, 1962, the appellants collected and paid the duty which was actually received from the visitors to the theatre by stamps affixed on the tickets issued to them according to the notification issued by the Collector. The Government of Gujarat later advised that the method of collection notified by the Collector was not correct. However, the Act contains no provision for reopening assessments already made. When payments were made and accepted under section 4(2)(b), the tax may be deemed to be assessed and paid, and the State cannot thereafter reopen the concluded assessments and seek to levy tax or duty which has escaped.

Conclusion:
The appeals were dismissed except as to the amount claimed to be due for the period between March 18, 1960, and January 11, 1962. There was no order as to costs.

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