TaxTMI 
TaxTMI 
2008 (9) TMI 913
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....se (i) of clause (e) of section 2 at 70 per cent of such payment; and (b) specified in sub-clause (ii) of clause (e) of section 2 at 40 per cent of such payment. Table . . . . . . (1A) In respect of entertainments referred to in sub-clause (iii) of clause (e) of section 2, other than an entertainment on which tax is levied under section 4E or 4F, there shall be levied and paid to the State Government on each payment for admission excluding the amount of tax, to such entertainment, entertainments tax at the rate of ten per cent, if such payment for admission, excluding the amount of tax, is not less than fifty rupees: Provided that no tax shall be levied in the case of admission to a circus or drama or magic show or game or sport, where it involves no participation. (2) Notwithstanding anything contained in sub-section (1) and subsection (1A) there shall be levied and paid to the State Government (except as otherwise expressly provided in this Act) on every complimentary ticket issued by the proprietor of an entertainment, the entertainments tax at the appropriate rate specified in sub-section (1) and sub-section (1A) in respect of such entertainment, as if full payment had bee....
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...., Kodava, Konkani, Tulu or Banjara film produced in the State of Karnataka, the rates of entertainments tax payable shall be nil: Provided that in case of a Kannada film which is remake of a film of other language, which has secured a censor certificate from the Central Board of Film Certification on or before March 31, 2002, no tax shall be levied under sections 3 and 3A . . .: Provided further that tax at the rate of seventy-five per cent of the tax payable under sections 3 and 3A shall be levied from April 1, 2002 on a Kannada film which is a remake of a film of other language and which has secured a censor certificate from the Central Board of Film Certification. (b) in the case of a cinematograph show of a Kannada, Kodava, Konkani or Tulu film produced outside the State of Karnataka and which has secured censor certificate issued by the Central Board of Film Certification on or before the thirty-first day of December, 1987, the rates of entertainments tax payable shall be nil . . . Explanation.- . . (c) in the case of a cinematograph show of a Kannada film which is a remake of a film of any other language,- (i) having been remade in the State of Karnataka after a period ....
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....xceeds fifteen rupees but does not exceed twenty rupees sixty-eight rupees exceeds twenty rupees c. d. One hundred and eighteen rupees Provided that in the case of a cinematograph show of Kannada, Kodava, Konkani or Tulu film, in addition to tax leviable under sections 3 and 3A, the tax payable under this sub-section shall be at the following rates, namely: - Sl. No. Payment for admission (excluding entertainment tax) of a person to the highest class of seat or accommodation Rate of tax per show a. does not exceed five rupees Eighteen rupees exceeds five rupees but does not exceed fifteen rupees b. Thirty rupees exceeds fifteen rupees but does not exceed twenty rupees c. Thirty-eight rupees exceeds twenty rupees d. Forty-eight rupees Provided further that in respect of cinema theatres paying tax in the manner specified in section 4A, the tax under this section shall be paid at the following rates, namely: - Sl. No. Total payment for admission of a person to the highest class of seat or accommodation Rate of tax per show a. does not exceed eight rupees Forty rupees exceeds eight rupees but does not exceed ....
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....ion 4 of the Act. While the petitioners in both these writ petitions have sought for a declaration that sections 3(1)(b), 3A and 3C of the Act, are all bad in law being unconstitutional, there is a prayer seeking for a direction to the respondents to consider the cases of the petitioners in W.P. No. 11520 of 2007, for refund of the entertainment tax and additional tax so far paid by the petitioners under sections 3, 3A of the Act. In W.P. No. 19802 of 2007, it is additionally sought for a declaration that no tax can be collected under section 3A of the Act, as there is no corresponding liability on the Kannada, Kodava, Konkani, Tulu or Banjara language films and in respect of section 4A, a declaration is sought for that the rate of tax payable under this section in respect of non-Kannada, Kodava, Konkani, Tulu or Banjara language films shall be at the same rate of tax as is in respect of Kannada, Kodava, Konkani, Tulu or Banjara language films under this section, i.e., all movies should attract tax at the same rate as is applicable to screening of Kannada, Kodava, Konkani, Tulu or Banjara language films. The petitioners have also claimed that their fundamental right for fr....
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....m industry; that if such protection is not given, Kannada film industry may perish leading to the affectation of the culture and spreading of Kannada language and its people; that the taxation measures are also measures which can be used to achieve social welfare objectives; that the number of persons who patronize and view Kannada films is far less compared to viewers of films produced in other languages such as Hindi, Telugu, Tamil, etc., which have a larger market territory-wise and audience number-wise and therefore making a classification between the Kannada film industry and the film industries producing movies in other languages such as Hindi, Telugu, Tamil, etc., is a reasonable classification and having the object of promoting almost a sick Kannada film industry; that the petitioners cannot complain of any act of discrimination because of such classification for the reason that there is no discrimination so far as the petitioners are concerned; that they have not faced any disadvantage visa-vis other exhibitors in comparison to whom the petitioners can be sought to be at a disadvantage; that the provisions operate uniformly on all exhibitors; that the tax which is ultimate....
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....resorting to an act of discrimination by providing for such statutory provisions in a taxing statute, which amounts to discrimination and therefore the act is not free from the vice of discrimination; that the stand taken by the State to defend the statute is neither made out on facts nor tenable in law and therefore urged for allowing the writ petitions. It is on the premise of such pleadings, Sri B.G. Sridharan, learned Senior Counsel appearing for the petitioners in W.P. No. 11520 of 2007 and Sri K.V. Dhananjay, learned counsel for the petitioners in W.P. No. 19802 of 2007 have made submissions and are heard. Sri Udaya Holla, learned Advocate-General, argued on behalf of the State and its officers, defending the statutory provisions. Sri B.G. Sridharan, learned Senior Counsel, has submitted that section 3C of the Act, reducing the rate of tax in respect of Kannada, Kodava, Konkani, Tulu or Banjara films to be nil, which amounts to granting total exemption from payment of entertainment tax in respect of such films, and also section 4 of the Act, particularly the provisos which provide for a lower rate of tax in respect of movies made in languages in Kannada, Kodava, Konkani, Tu....
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....to be an independent section in the scheme of the Act, it is virtually in the nature of the proviso to section 3 and should be read as part of section 3 itself and if so read, the charging section produces an act of discrimination, as urged earlier and therefore section 3C being a separate section or in the nature of exemption cannot make much, difference to get over the allegations of discrimination and the provisions should be declared as unconstitutional and void. Sri Udaya Holla, learned Advocate-General, appearing for the State and its officers, has made valiant efforts to defend the validity of the statutory provisions. It is firstly contended that it is a well-settled principle of interpretation of the Constitution and the taxing laws that in the matter of levy of tax, the Legislature has a larger freedom to choose a specific person, place or goods, which should be brought within the net of taxation and as to who should be left out of the net of taxation and likewise, even in the matter of rates, as to who should be subjected to tax at a higher rate and who should be subjected to tax at a lower rate; that such measures are essentially within the policy domain of the State a....
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....producers and that can definitely help the Kannada film industry to raise and improve in quality and even achieve technical superiority in production, and all these things fully subserve the object of chieving the social causes even in terms of the provisions of Part IV of the Constitution of India and therefore submits that the statutory provisions are not in any way discriminatory nor do they in any way affect the rights of the petitioners guaranteed under article 14 of the Constitution of India and in this regard has placed reliance on the decisions of the Supreme Court in the case of Elel Hotels and Investments Ltd. v. Union of India [1989] 74 STC 146; [1989] 3 SCC 698 and Sri Srinivasa Theatre v. Government of Tamil Nadu [1993] 89 STC 201; [1992] 2 SCC 643. Sri Udaya Holla, has also placed reliance on the decision of the Supreme Court in the case of D.A.V. College, Bhatinda v. State of Punjab AIR 1971 SC 1731. While the general principles as they emerge from the decisions relied upon by the learned Advocate-General are well known and are not in dispute. In so far as the reliance placed on the decision of the Supreme Court in the case of D.A.V. College AIR 1971 SC 1731 is conc....
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..... In so far as the attack based on article 14 of the Constitution of India is concerned, while the petitioners per se alleged an act of discrimination and the learned counsel for the petitioners submits that the matter is squarely covered by the ratio of the decision of the Supreme Court in the case of Aashirwad Films [2007] 7 VST 714; [2007] 6 SCC 624, the stand of the State is that there is a distinguishing feature in the present case and particularly as explained by the State in its counter, which was conspicuously absent in the case of Andhra Pradesh legislation and which was the main cause for frowning upon that legislation. Strong reliance is placed by the learned Advocate-General on this aspect by referring to para 25 of the judgment of the Supreme Court in the case of Aashirwad Films [2007] 7 VST 714; [2007] 6 SCC 624, which reads as under: (page 723 of VST) "25. The purported classification only on the basis of language without anything more and in particular having regard to the difference in the rate of tax, in our opinion, is ex facie arbitrary. The burden was, therefore, on the State to show that the imposition was justified. Different rates of entertainment tax had ....
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....the basis of a reasonable and justifiable classification, it should not result in creating a division in the society based on artificial barriers and language being one such barrier and the provision also should not fall foul with any other provisions of Constitution, viz., even Part IV of the Constitution, and therefore was held to be violative of article 14 of the Constitution of India is a declaration which clearly applies to the present case, as language alone is made a criterion for bringing about the distinction in levying different rates of tax. It is no doubt true that to complain an act of discrimination, the complainant should demonstrate that the complainant is put to a disadvantage vis-a-vis another person, who is not so disadvantaged or is even at an advantageous position and an act of discrimination arises only in the context of a comparative analysis of the impact of the statutory provisions on two different persons and in the instant case, the petitioners are not complaining that they are discriminated vis-a-vis any other exhibitors, who are either at an advantageous position or who are not so disadvantaged, and therefore the very concept of discrimination may not ....
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....made applicable to non-Kannada, Kodava, Konkani, Tulu or Banjara films and not at the rates as are indicated in general or in the main part of the section. Submission is that the proviso alone should be declared valid and all other parts should be declared to be unconstitutional. I am afraid this is an exercise that can be undertaken more by the Legislature and the duty of the court is only to review and declare that legislative action which is offending. When it is found that it is the proviso which constitutes the offending part, as it seeks to carve out a class of films, viz., films produced in Kannada, Kodava, Konkani, Tulu or Banjara languages in which, it either exempts or subjects to a lower rate of tax resulting in an act of discrimination, it is only this offending portion which can be declared as unconstitutional and not the main provision which is general in nature. Therefore, the provisions of section 4, which constitute a proviso in the nature of levy of a lower rate of tax in the case of Kannada, Kodava, Konkani, Tulu or Banjara films, i.e., the following portion of section 4 of the Act is declared as unconstitutional: "Provided that in the case of a cinematograph s....