TaxTMI 
TaxTMI 
1991 (11) TMI 227
X X X X Extracts X X X X
X X X X Extracts X X X X
.... entertainment tax and show tax levied under the A.P. Entertainments Tax Act, 1939 (hereinafter referred to as "the Act") and the Rules made thereunder. In these writ petitions, only the levy and payment of show tax under section 4-A of the Act as amended by Ordinance No. 8 of 1988 is challenged and there is no dispute about the levy and payment of the entertainment tax under section 4 of the Act. Prior to 20th May, 1988, the rates of show tax were as follows: ------------------------------------------------------------------------ Sl. Local area Rate of tax for No. every show ------------------------------------------------------------------------ 1 Municipal corporations, Secunderabad cantonment Rs. 6.00 area and the contiguous area of two kilometres thereof. 2 Selection grade, special grade and first grade Rs. 6.00 municipalities and the contiguous area of two kilometres thereof. 3 Second grade and third grade municipalities and the Rs. 4.00 contiguous area of two kilometres thereof. 4 Gram panchayats, selection grade gram Rs. 2.00 panchayats, townships and any other local area. -----------------------------------------------------------------------....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... amounts that all the aspects have been examined before issue". The petitioners are not prohibited from carrying on the trade or business of screening the films on video and the State Government has the power to levy different rates of tax "in the larger interest of public and revenue." It is denied that the levy is either discriminatory or arbitrary or unreasonable. It may be noticed that the enhancement of show tax with effect from 20th May, 1988, in respect of cinema theatre situated within the local limits of (1) the Municipal corporations, Secunderabad cantonment area, selection grade, special grade and first grade municipalities was from Rs. 6 to Rs. 12 per show; (2) Second grade and third grade municipalities was from Rs. 4 to Rs. 8 per show; (3) Gram panchayats with a population of 15,000 and above was from Rs. 2 to Rs. 4 per show. So far as the cinema theatres situated within the local limits of gram panchayats with a population of less than 15,000 are concerned, there was no enhancement in the rate of show tax and it continues to be Rs. 2 per show. The main contention advanced on behalf of the petitioners is that the exhibitors of films on television screen through ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or even rates of tax, if it does so reasonably. But at the same time, the Legislature shall refrain from making a hostile discrimination against a particular class of persons. Whereas the owner of a cinema theatre whose income per show will be much more than that of the owner of a video parlour, is subjected to levy of maximum show tax of Rs. 12 per show, we see no justification in levying show tax of Rs. 50 per show in respect of a video parlour. Thus, the provision is per se discriminatory. Both of them have a fundamental right to carry on the trade or business of exhibiting films. It will not be inappropriate to say that the owners of cinema theatres have the potential to earn more than the owners of video parlours. In such a situation, it will be clearly arbitrary and unreasonable to subject a person, who earns less in the business to a higher rate of tax than the person, who earns more in carrying on the same or similar business. There need not be mathematical precision in levying the rates of tax, but there should be some classification where one is required, in order to eliminate obviously unjust results. If the sole intention of the Legislature is to eliminate the....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., it would be apposite to refer to the observations of the Constitution Bench of the Supreme Court in Rai Ramkrishna v. State of Bihar [1963] 50 ITR 171 (SC); AIR 1963 SC 1667: "In view of the recent decisions of this Court, Mr. Sastri also concedes that taxing statutes are not beyond the pale of the constitutional limitations prescribed by articles 19 and 14, and he also concedes that the test of reasonableness prescribed by article 304(b) is justiciable. It is, of course, true that the power of taxing the people and their property is an essential attribute of the Government and Government may legitimately exercise the said power by reference to the objects to which it is applicable to the utmost extent to which Government thinks it expedient to do so. The objects to be taxed so long as they happen to be within the legislative competence of the Legislature can be taxed by the Legislature according to the exigencies of its needs, because there can be no doubt that the State is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters withi....