TaxTMI 
TaxTMI 
1999 (12) TMI 832
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....der dated 17th September, 1983. Permanent cinema houses constructed under the scheme depending on the population of the areas/towns wherein they were constructed were allowed grant-in-aid equivalent to 100%, 75%, 50% respectively for the first, second and third year of construction in the areas/places having the population of more than 20,000 but less than 1,00,000. In the areas/places having population of less than 20,000 the amount of grant-in-aid was equivalent to 100%, 75%, 50% respectively for the first two years, the third year and the fourth year of construction. There were a few conditions attaching with the entitlement to the benefit of the grant-in-aid. The conditions relevant for our purpose were: (1) that the grant-in-aid shall be admissible only to such cinema houses which fixed their maximum entrance rates inclusive of tax at not more than Rs. 2.50; (ii) that the District Magistrate shall permit the grant-in-aid after providing the licence in the performa enclosed with the Government Order; and (iii) that the permission shall be effective after the cinema owner signed the agreement contemplated by the scheme. The scheme was extended from time to time with ....
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....bsp; xxx xxx The amount of extra charge permitted for maintenance of the cinema premises was 25 paisa as introduced by Act No. 14 of 1992. It was revised to 1 rupee by U.P. Act No, 3 of 1995 with effect from 10.10.1994. The validity of the amendment was challenged by a number of cinema houses/cinema owners by filing several writ petitions. One such petition was filed by Kamla Palace. The principal ground of challenge was that the proviso appended to sub-section (I) of Section 3A of the Act was discriminatory in nature and violative of Article 14 of the Constitution. A batch of writ petitions led by the writ petition filed by Kamla Palace was heard by a Division Bench of the Allahabad High Court. By its judgment and order dated 10.7.1995 the Division Bench declared the proviso to sub-section (1.) of amended Section 3A as ultra vires of the Constitution. Broadly stated the Division Bench formed an opinion that the object sought to be achieved by clause (a) of sub-section (1) of Secti....
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....er a case for condonation of delay was made out nor a case for exercising jurisdiction to review was made out. C.A. No. 662/1997 has been preferred by the State of U.P. putting in issue the order dated 14.11.1996. We have heard the learned counsel for the parties in all the matters analogously. The issue arising for decision is whether the proviso appended to sub-section (1) of Section 3-A reproduced hereinabove suffers from the vice of invidious discrimination by carving out an artificial classification by dividing the cinema houses into two based on the criterion whether they receive or do not receive benefit of incentive scheme propounded by the State Government and whether such classification has no nexus with the object sought to be achieved. It was submitted by the learned counsel for the cinema owners whether a cinema receives or does not receive grant-in-aid by way of relief in the amount of entertainment tax does hot make any difference so far as the maintenance of cinema house is concerned. It cannot be said that a cinema house receiving grant-in-aid requires no maintenance or lesser maintenance. The proviso therefore brings into existence two classes of cinemas ....
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....ust and reasonable relation to the object sought to be achieved by the Legislature. [See :-Re : Special Court Bill, [1979] 20 SCR 476, 7 -judges Bench; R.K. Garg v. Union of India, [1981] 4 SCC 675, 5 -judges Bench.) It was further held in R.K. Garg's case that laws relating to economic activities or those in the field of taxation enjoy a greater latitude than laws touching civil rights such as freedom of speech, religion etc. Such a legislation may not be struck down merely on account of crudities and inequities inasmuch as such legalisations are designed to take care of complex situations and complex problems which do not admit of solutions through any doctrinaire approach or straight-jacket formulas. Their Lordships quoted with approval the observations made by Frank Furter, J. In Morey v. Doud (1957) 354 US 457- "In the utilities, tax and economic regulations cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The Courts have only the power to destroy, not to reconstruct. When these are added to th....
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....re than Rs. 2.50 or Rs. 5, Such classification is clear, well-defined and real. The object sought to be achieved was to encourage the cinema owners in boosting entertainment facilities available to the people. This was achieved by providing grant-in-aid under an incentive scheme to one class of cinema owners and by permitting recovery of certain amount by way of charges for maintenance to such another class of cinema owners as were not receiving any grant-in-aid. Thus it cannot be said that the classification had no nexus with the object sought to be achieved. The Full Bench has during the course of its judgment observed, and rightly in our opinion, that if the benefit conferred by the impugned amendment was made general, i.e., available to all the cinema owners then the cinema owners operating in rural area would have secured double benefit-one by way of grant-in-aid and other by way of recovering maintenance charges from the cinema-goers exempt from payment of entertainment tax and there is nothing wrong in the Legislature having chosen not to confer such double benefit on the cinema owners already enjoying benefit of an incentive scheme of the State Government, Moreover, it cann....