TaxTMI 
TaxTMI 
2010 (3) TMI 999
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....ons. It appears that the State Government of Uttar Pradesh issued a Government order dated June 13, 2000 laying down policy for grant of exemption from entertainment tax in respect of films. One of the conditions for grant of exemption laid down in clause 6 of the said policy was that a maximum of 12 prints of the film would be exhibited at one time in the entire State of Uttar Pradesh, and only one print would be exhibited at one time in a District. The said Government order dated June 13, 2000 has been filed as part of annexure 2 to the aforementioned Civil Misc. Writ Petition No. 56 (Tax) of 2005. The said policy, as contained in the said Government order dated June 13, 2000, was amended by the Government order dated April 16, 2003 and by the Government order dated May 17, 2003. Copies of the said Government order dated April 16, 2003 and the Government order dated May 17, 2003 have been filed as part of annexure 2 to Civil Misc. Writ Petition No. 56 (Tax) of 2005. It further appears that by the Government order dated October 16, 2003, exemption from entertainment tax was granted in respect of film "Zamin" with immediate effect for a period of 90 days (three months) in ....
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....on dated November 25, 2004 to the Deputy Entertainment Tax Commissioner, Uttar Pradesh, Assistant Entertainment Tax Commissioner, Uttar Pradesh, District Entertainment Tax Officer, Uttar Pradesh and In-charge of Entertainment Tax Inspector, Uttar Pradesh, inter alia, directing them to take necessary action for computation and realization of entertainment tax for the relevant period in view of the withdrawal of exemption from entertainment tax granted to the film "Zamin". Copy of the said communication dated November 25, 2004 has been filed as annexure 3 to the aforementioned Civil Misc. Writ Petition No. 427 (Tax) of 2005. In view of the said Government order dated November 24, 2004 and the said communication dated November 25, 2004, proceedings were taken in respect of the petitioner in each of the aforementioned five writ petitions, as detailed below: 1.. Civil Misc. Writ Petition No. 427 (Tax) of 2005 In Civil Misc. Writ Petition No. 427 (Tax) of 2005, a notice dated December 15, 2004 under section 12 of the 1979 Act was issued by the District Magistrate, Varanasi, to the petitioner M/s. Abhay Cinema, Varanasi proposing to impose Rs. 47,668.94 as entertainment tax fo....
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.... Gorakhpur, proposing to impose Rs. 1,60,541.25 as entertainment tax for the exhibition of the film "Zamin" in the cinema hall of the petitioner during the period from October 24, 2003 to November 13, 2003 in view of the withdrawal of exemption from entertainment tax on account of violation of condition No. 1, as contained in the Government order dated October 16, 2003. Copy of the said notice dated December 15, 2004 has been filed as annexure 6 to the said writ petition. In response to the said notice, the petitioner submitted its reply dated December 17, 2004, copy whereof has been filed as annexure 7 to the writ petition. Thereafter, the District Magistrate, Gorakhpur, passed an order dated December 27, 2004, inter alia, assessing entertainment tax as Rs. 1,60,541.25 in respect of the exhibition of the film "Zamin" during the period from October 24, 2003 to November 13, 2003 and directing the petitioner to deposit the said amount or else the same would be realized as arrears of land revenue under section 34 of the 1979 Act. Copy of the said order dated December 27, 2004 has been filed as annexure 8 to the writ petition. It further appears that on December 2....
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....by the District Magistrate, Varanasi to the petitioner-Yamuna Picture Palace, Varanasi proposing to impose Rs. 31,667.52 as entertainment tax for the exhibition of the film "Zamin" in the cinema hall of the petitioner during the period from December 5, 2003 to December 11, 2003 in view of the withdrawal of exemption from entertainment tax on account of violation of condition No. 1, as contained in the Government order dated October 16, 2003. Copy of the said notice dated December 15, 2004 has been filed as annexure 4 to the said writ petition. In response to the said notice, the petitioner submitted its reply dated December 28, 2004, copy whereof has been filed as annexure 5 to the writ petition. Thereafter, the District Magistrate, Varanasi, passed an order dated February 8, 2005, inter alia, assessing entertainment tax as Rs. 31,667.52 in respect of the exhibition of the film "Zamin" during the period from December 5, 2003 to December 11, 2003 and directing the petitioner to deposit the said amount or else the same would be realized as arrears of land revenue under section 34 of the 1979 Act. Copy of the said order dated February 8, 2005 has been filed as annex....
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....19 of the said writ petition make it evident that the petitioner did not give any reply to the said notice dated December 16, 2004. In the circumstances, it appears that the respondents finalized the assessment of Rs. 17,536.70 as mentioned in the said notice dated December 16, 2004. In view of the above, we are of the opinion that the plea of the petitioner in the said writ petition that it (petitioner) was not given any opportunity before the assessment of entertainment tax is misconceived and incorrect. A perusal of the averments made in the aforementioned writ petitions shows that the petitioners have not disputed the fact that the film "Zamin" was exhibited at the same time in more than one cinema hall in various districts, and that more than 12 prints of the said film were at the same time exhibited in the State of Uttar Pradesh. However, in Civil Misc. Writ Petition No. 56 (Tax) of 2005 it has been alleged that while 12 prints of the said film were exhibited tax-free in the entire State of Uttar Pradesh, the remaining prints though exhibited at the same time were exhibited by charging entertainment tax as per law, therefore, condition No. 1, as contained in the Governm....
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....e policy as contained in the Government orders dated June 13, 2000, April 16, 2003 and May 17, 2003 was in operation during the said period, and the withdrawal of exemption from entertainment tax in respect of the film "Zamin" by the Government order dated November 24, 2004 was fully in accordance with the policy operative at the relevant time. Subsequent withdrawal of the restriction by amending the policy by the Government order dated February 17, 2005 was not relevant so far as the exhibition of the film "Zamin" during the relevant period was concerned. The amendment made in the policy by the Government order dated February 17, 2005 could not be applied retrospectively to the exhibition of the film "Zamin" during the relevant period. Let us now consider common questions involved in the aforementioned five writ petitions. Section 11 of the 1979 Act gives power to the State Government to exempt any entertainment or class of entertainments from liability to pay tax under the said Act. The said section 11 is as under: "11. Exemption.-(1) The State Government may, for promotion of peace, international goodwill, arts, sports or other public interest, by general or s....
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....g with his recommendations and other relevant records and the Commissioner may, subject to the Rules made under this Act, grant exemption to such entertainment from payment of tax under this Act on such terms and conditions as he may deem fit to impose. (5) Where any exemption from payment of tax is granted under sub-section (4), the proprietor of such entertainment shall furnish to the (District Magistrate or Entertainment and Betting Tax Commissioner, as the case may be) such documents and records and in such manner as may be prescribed. (6) If the proprietor of an entertainment exempted under subsection (4) fails to furnish the documents and records required under sub-section (5), or fails to comply with any conditions imposed or directions issued in this behalf, or if the (District Magistrate or Entertainment and Betting Tax Commissioner, as the case may be) is not satisfied with the correctness of such documents or records, the (District Magistrate or Entertainment and Betting Tax Commissioner, as the case may be) may cancel the exemption so granted and thereupon the proprietor shall be liable to pay the tax which would have been payable had not the entertainment been so....
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....n the circumstances, the Entertainment Tax Commissioner, Uttar Pradesh, sent the aforementioned communication dated December 6, 2003 to the State Government, inter alia, recommending for consideration of the withdrawal of the exemption granted to the film "Zamin" by the said Government order dated October 16, 2003. In view of the said communication dated December 6, 2003, the State Government by the Government order dated November 24, 2004 withdrew the exemption from entertainment tax granted to the film "Zamin" by the said Government order dated October 16, 2003. The withdrawal of exemption from entertainment tax by the said Government order dated November 24, 2004 was fully justified in view of clause (3) of the said Government order dated October 16, 2003 which gave power to withdraw exemption from entertainment tax in case of violation of any of the conditions mentioned in the said Government order dated October 16, 2003. It is noteworthy that the proviso to sub-section (3) of section 11 of the 1979 Act, inter alia, provides that the State Government may cancel exemption from entertainment tax if it is satisfied that the proprietor of such entertainment has failed to c....
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....rietor" at two places in the said proviso would have the same meaning. The violation of the terms and conditions in the present case was committed by the distributor or the producer of the film "Zamin" and, therefore, the distributor or the producer of the film "Zamin" would be "proprietor" within the meaning of the said word as used in the proviso to sub-section (3) of section 11 of the 1979 Act. Evidently, therefore, the "proprietor" liable to pay entertainment tax, as mentioned in the said proviso, would be the distributor or the producer of the film "Zamin" and not the cinema hall owners/licensees. In reply, the learned standing counsel has made the following submissions: 1.. The definition of "proprietor" in clause (m) of section 2 of the 1979 Act is an inclusive definition. Sub-clause (ii) of clause (m) of section 2, inter alia, provides that any person "charged with the work of admission to the entertainment" would be included within the meaning of the word "proprietor". Section 3 of the 1979 Act, which is the charging section, levies entertainment tax on all payments for "admission to any entertainment". Reading section 3 and sub-clause (ii) of clause (m) of sectio....
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....ons of the exemption and collection of relevant details in this regard would evidently take time, and there was no responsibility on the licensing authority to intimate the cinema hall owners/licensees in this regard or to permit the cinema hall owners/licensees to charge entertainment tax despite the existence of the exemption. 4.. The definition of the word "proprietor" in clause (m) of section 2 of the 1979 Act is an inclusive definition. Sub-clause (i) of clause (m) of section 2 includes any person connected with the organization of the entertainment within the meaning of the word "proprietor". Sub-clause (i) may thus include the distributor and the producer of a film as they are the persons connected with the organization of the entertainment. Sub-clause (ii) of clause (m) of section 2 includes the cinema hall owners/licensees as they are the persons charged with the work of admission to the entertainment. The word "proprietor" in the proviso to sub-section (3) of section 11 will have to be interpreted in the wide sense in which it has been defined in clause (m) of section 2. Therefore, the word "proprietor" will include the producer, the distributor as well as the exhib....
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....iolation. The exemption from entertainment tax was granted under the said Government order dated October 16, 2003, and the petitioners, i.e., the cinema hall owners/licensees enjoyed the benefit of the exemption under the said Government order, and therefore, they were bound by the terms and conditions as contained in the said Government order. As such, in case of violation of any of the conditions laid down in the said Government order, the petitioners, i.e., the cinema hall owners/licensees became liable to pay the entertainment tax in respect of the period of exemption irrespective of the fact as to who committed such violation of the terms and conditions. As already noted above, condition No. 1, as contained in the said Government order dated October 16, 2003, was violated and in consequence, the State Government by the Government order dated November 24, 2004 withdrew the exemption from entertainment tax granted to the film "Zamin". Hence, in view of the provisions of clause (3) of the said Government order dated October 16, 2003, the petitioners, i.e., the cinema hall owners/licensees became liable to pay entertainment tax and it was not open to them to contend that the vi....
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....h increased tax shall also be collected by the proprietor and paid to the Government in the manner prescribed. (4) If in any entertainment, referred to in sub-section (1), to which admission is generally on payment, any person is admitted free of charge or on a concessional rate, the same amount of tax shall be payable as would have been payable had such person been admitted on full payment. (5) Where the payment for admission to an entertainment, referred to in sub-section (1), is made wholly or partly, by means of a lump sum paid as subscription, contribution, donation or otherwise, the tax shall be paid on the amount of such lump sum and on the amount of payment for admission, if any, made otherwise. (6) Where in a hotel or a restaurant, entertainment by way of cabaret or floor show (by whatever name called, but excluding a mere band in attendance or recorded music) is provided along with any meal or refreshment with a view to attracting customers, whether or not payment for admission is charged distinctly for such entertainment, twenty per cent of the amount payable by the customer for such meal or refreshment or the amount charged distinctly for such entertainment, wh....
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....ays down that a proprietor of a cinema or cable operator in a local area having a population not exceeding one lac may, in lieu of payment under the said sub-section, pay a compounded payment to the State Government on such conditions and in such manner as may be prescribed and at such rate as the State Government may from time to time notify. Different rates of compounded payments may be notified for different categories of local areas. Sub-section (2) of section 3 of the 1979 Act provides that nothing in sub-section (1) of the said section shall preclude the State Government from notifying different rate of entertainment tax for different areas or for different classes of entertainment or for different payment for admission to entertainment. Sub-section (3) of section 3 of the 1979 Act shows that while collecting the payment for admission to an entertainment and the entertainment tax, charge for maintenance of cinema premises and extra charge for air cooling or air conditioning facility, may also be collected. Sub-section (4) of section 3 of the 1979 Act lays down that if in any entertainment, referred to in sub-section (1), to which admission is generally on payment, an....
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....y form shall be deemed to be payment for admission; (ll) . . . (m) 'proprietor' in relation to any entertainment includes any person- (i) connected with the organization of the entertainment, or (ii) charged with the work of admission to the entertainment, or (iii) responsible for, or for the time being in charge of, the management thereof; [(mm)] to (o) . . . . . (p) 'tax' means entertainment tax, betting tax or the totalizator tax, as the case may be, and includes surcharge, cess, penalty or any other charge levied under this Act; (q) 'ticket' means a ticket or a complimentary pass for the purposes of securing admission to an entertainment in accordance with the provisions of this Act or the Rules made thereunder, and a 'duplicate ticket', means a ticket or set of tickets used or intended to be used otherwise than in accordance with this Act or the Rules made thereunder; (r) to (t) . . ." Clause (a) of section 2 defines the phrase 'admission to an entertainment'. Accordingly, 'admission to an entertainment' includes admission to any place in which the entertainment is held. Clause (g) of section 2 de....
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....sub-section (1) of section 3 of the 1979 Act shows that the proprietor is a person who is charged with the work of admission to the entertainment as contemplated in sub-clause (ii) of clause (m) of section 2. In other words, "proprietor" as contemplated in sub-section (1) of section 3 of the 1979 Act, is the cinema hall owner/licensee. Hence, the responsibility to collect the entertainment tax is on the cinema hall owner/licensee. This is further borne out from the proviso to sub-section (1) of section 3, which contemplates a compounded payment by a "proprietor of a cinema". Again, sub-section (3) of section 3 permits charging for maintenance of cinema premises and extra charge for air cooling or air conditioning facility. Such charging will evidently be done by the cinema hall owner/licensee. The above conclusion that "proprietor" in the context of sub-section (1) of section 3, is the cinema hall owner/licensee, is further substantiated by a perusal of other provisions of the 1979 Act. Clause (q) of section 2 of the 1979 Act defines the word "ticket". Accordingly, "ticket" means a ticket or a complimentary pass for the purposes of securing admission to an entert....
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....d issued shall not, however, be kept for resale in the booking office." Sub-rule (1) of rule 39 provides that the tickets for admission to a cinematograph exhibition shall be "issued by the proprietor only from a booking office provided for the purpose". The requirement that the tickets are to be issued by the proprietor only from a booking office, shows that the word "proprietor" refers to the cinema hall owner/licensee. Rule 3 of the 1981 Rules deals with the manner of collection and levy of tax. The said rule 3 is as under: "3. Manner of collection and levy of tax.-(1) The proprietor of an entertainment in respect of which tax is leviable under section 3 of the Act shall intimate in writing to the District Magistrate the rates of admission, excluding tax, to various classes, and the rates of different kinds of tickets for each class, the amount of tax and the surcharge if any, leviable and extra charges realisable on each kind of ticket and the total value of the ticket. (2) Where payment for a programme or synopsis is compulsory, the tax shall be levied on the total sum paid for admission to the entertainment including the sum paid for the programme or synopsis. ....
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.... unless tickets of the serial 90,000 in use have been exhausted and unless prior information of the same has been given to the District Magistrate and any ticket found in stock in contravention of this rule shall, unless proved to the contrary, be considered to be duplicate kept for use with the object of evading the tax." Sub-rule (1) of rule 5 of the 1981 Rules, thus, provides that the "proprietor" of an entertainment shall issue the outer and middle counterfoils of ticket to the purchaser thereof and shall retain inner counterfoil in the ticket book. This provision again makes it clear that the word "proprietor" refers to the cinema hall owner/licensee. Rule 12 of the 1981 Rules deals with admission without payment of tax. The said rule 12 is as under: "12. Admission without payment of tax.-If in any entertainment on which tax is leviable under the Act any person in respect of whom tax is payable is found witnessing the show without a ticket it shall, unless proved to the contrary, be presumed that such person has been allowed admission without payment of due entertainment tax by the proprietor of such entertainment." Rule 12, thus, provides that if any person is fou....
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....s realizable under the 1979 Act, collected. The responsibility of the "proprietor" as laid down in this sub-rule makes it evident that the word 'proprietor' refers to the cinema hall owner/licensee. Reading rule 39, rule 3, rule 4, rule 5, rule 12 and rule 13 of the 1981 Rules with sub-section (1) of section 3 of the 1979 Act, it is evident that the word "proprietor" in the context of sub-section (1) of section 3 of the 1979 Act refers to the cinema hall owner/licensee. This conclusion is further supported by certain other provisions of the 1979 Act and the 1981 Rules. Section 9 of the 1979 Act deals with refund of entertainment tax. The said section 9 is as under: "9. Refund of tax.-(1) Where the (Assistant Commissioner or Entertainment Tax Officer, as the case may be) is satisfied that the proprietor has deposited tax in excess of the amount actually due, he shall grant a refund in respect of such amount or allow its adjustment against future payments of tax. (2) When an entertainment is not completed for reasons beyond the control of the proprietor, and the (Assistant Commissioner or Entertainment Tax Officer, as the case may be) is satisfied that the proprie....
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....welve months of the deposit of the tax stating clearly the period to which the tax relates, the amount of tax actually due, the amount of tax actually deposited, the treasury challan number and the reasons for the deposit of the tax in excess. An application for refund not submitted within the aforesaid period of twelve months shall be liable to be rejected." Rule 28, thus, provides that the "proprietor" of an entertainment claiming refund of tax under sub-section (1) of section 9 of the 1979 Act shall submit an application in this behalf to the District Magistrate within the period and giving such details as mentioned in the said rule 28. The application claiming refund of entertainment tax will evidently be made by the cinema hall owner/licensee. Thus, the word "proprietor" in rule 28 refers to the cinema hall owner/licensee. Reading section 9 of the 1979 Act and rule 28 of the 1981 Rules with sub-section (1) of section 3 of the 1979 Act, it is evident that the word "proprietor" in the context of sub-section (1) of section 3 of the 1979 Act refers to the cinema hall owner/licensee. In view of the above provisions of the 1979 Act and the 1981 Rules, it is evident that the....
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...., and the responsibility for collection and payment of entertainment tax has been imposed on the cinema hall owner/licensee. Therefore, in view of the withdrawal of exemption from entertainment tax in respect of the film "Zamin" on account of violation of condition No. 1, as contained in the said Government order dated October 16, 2003, the petitioners, i.e., the cinema hall owners/licensees became liable to pay entertainment tax in view of the provisions of the 1979 Act and the 1981 Rules framed thereunder. As regards the submission made on behalf of the petitioners that violation of condition No. 1, as contained in the said Government order dated October 16, 2003 had been committed by the distributor or the producer of the film "Zamin" and not by the petitioners (cinema hall owners/licensees), it is noteworthy that clause (3) of the said Government order came into play in case of violation of the conditions laid down in the said Government order, and it was not material or relevant as to who committed such violation. The exemption from the entertainment tax was granted under the said Government order dated October 16, 2003, and the petitioners, i.e., the cinema hall ....
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....ns imposed or directions issued in this behalf on account of the own fault or on account of the fault of someone else. Whether on account of the own fault of the cinema hall owner/licensee or on account of the fault of someone else, the inevitable consequence will be that the cinema hall owner/licensee shall be liable to pay the tax which would have been payable had not the entertainment been so exempted. The above interpretation is in consonance with the conclusion that under the Scheme of the 1979 Act and the 1981 Rules, the responsibility for collection and payment of entertainment tax has been imposed on the cinema hall owner/licensee. Therefore, even if we were to accept the submission made on behalf of the petitioners that the violation of condition No. 1 was committed by the distributor or the producer of the film "Zamin" and not by the petitioners (cinema hall owners/licensees), still the liability to pay entertainment tax for the period of exemption was on the petitioners (cinema hall owners/ licensees). It is well-settled that there is no equity about a tax. Reference in this regard may be made to certain judicial decisions. 1.. In Commissioner of Income-ta....
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....n's case [1584] 3 Rep. 7b, yields better results: 'To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope, and object of the whole Act; to consider, according to Lord Coke: 1. What was the law before the Act was passed; 2. What was the mischief or defect for which the law had not provided; 3. What remedy Parliament has appointed; and 4. The reason of the remedy." (emphasis Here italicised.supplied) 2. In Income-tax Officer, Tuticorin v. T.S. Devinatha Nadar [1968] 68 ITR 252 (SC); AIR 1968 SC 623, it was observed as under (paragraph 24 of the said AIR) (at page 267 of 68 ITR): "24. Rowlatt, J. observed in Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 1 KB 64 (at page 71): 'in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.' These principles have been accepted as correct both by the English courts and the superior courts in this country. It is now well-settled that if....
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.... . . 29.. The true implication of the principle that a taxing statute must be construed strictly is often misunderstood and the principle is unjustifiably extended beyond the legitimate field of its operation. Indeed, the more well expressed the principle as in the Cape Brandy case [1921] 12 Tax Cas 358 greater the reluctance to see its limitations. In that famous passage marked by a happy turn of phrase, Rowlatt J. said, "there is no equity about a tax. There is no presumption as to a tax". There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. If the subject falls squarely within the letter of law he must be taxed, howsoever inequitable the consequences may appear to the judicial mind. If the Revenue seeking to tax cannot bring the subject within the letter of law, the subject is free no matter that such a construction may cause serious prejudice to the Revenue. In other words, though what is called equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, ....
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....iable to pay the entertainment tax for the period of exemption irrespective of the fact that they did not collect the entertainment tax from the public during the said period. This conclusion is also supported by an examination of the various provisions of the 1979 Act and the 1981 Rules framed thereunder which show that unless exempted from such liability, the proprietor, i.e., the cinema hall owner/licensee is liable to pay entertainment tax in full if the proprietor admits any person to entertainment irrespective of the fact that such person is admitted free of charge or on a concessional rate. It is well-settled that levy of tax or duty is not dependent on the realization of such tax or duty having been made by the assessee. Reference in this regard may be made to certain judicial decisions: (1) In Tata Iron & Steel Co., Ltd. v. State of Bihar [1958] 9 STC 267 (SC); AIR 1958 SC 452, the Supreme Court considered the validity of section 4(1) of the Bihar Sales Tax Act, 1947, as amended by the Act No. 6 of 1949. It was contended that the retrospective levy by reason of the amendment of section 4(1) destroyed its character as a sales tax and made it a direct tax on the dealer....
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.... the seller. The buyer is under no liability to pay sales tax in addition to the agreed sale price unless the contract specifically provides otherwise, See Love v. Norman Wright (Builders) Ltd. [1944] 1 KB 484. If that be the true view of sales tax then the Bihar Legislature acting within its own legislative field had the powers of a sovereign Legislature and could make its law prospectively as well as retrospectively. We do not think that there is any substance in this contention either." (emphasis Here italicised. supplied) (2) In J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh [1961] 12 STC 429 (SC); AIR 1961 SC 1534, the Supreme Court considered the validity of section 3A of the U.P. Sales Tax Act, 1948 as amended, inter alia, by the U.P. Sales Tax (Validation) Act, 1958 (U. P. Act XV of 1958) and the notifications issued under the said section. It was held as under (pages 436 and 437 of the said STC; paragraphs 11 and 13 of the said AIR): "11. The point for decision, stating it succinctly, is whether the Validation Act is within the ambit of entry 54 in List II of the Seventh Schedule to the Constitution. That entry confers on the States authority to enact a law wi....
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...., when the seller is not in a position to pass it on to the consumer, is a matter of policy and does not affect the competence of the Legislature. This question is concluded by the decision of this court in Tata Iron & Steel Co., Ltd. v. State of Bihar [1958] 9 STC 267 (SC); [1958] SCR 1355; AIR 1958 SC 452. The following observations of Das, C.J., bearing on this question might be quoted: 'Under the 1947 Act the primary liability to pay the sales tax, so far as the State is concerned, is on the seller. Indeed before the amendment of the 1947 Act by the amending Act the sellers had no authority to collect the sales tax as such from the purchaser. The seller could undoubtedly have put up the price so as to include the sales tax, which he would have to pay but he could not realise any sales tax as such from the purchaser. That circumstance could not prevent the sales tax imposed on the seller to be any the less sales tax on the sale of goods. The circumstances that the 1947 Act, after the amendment, permitted the seller who was a registered dealer to collect the sales tax as a tax from the purchaser does not do away with the primary liability of the seller to pay the sales tax....
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....n holding that 'there have been no finding by the Tribunal that the assessee acted mala fide in not depositing the tax at the rate of seven per cent. The demand of interest was not justified'. 3.. We are unable to see any relevance of the mala fides in this case. Section 8(1) does not say that the non-payment should be mala fide. This is also not a case where the rate of tax applicable was in dispute or disputed by the dealer. This is simply a case where the dealer calculated the tax at an inapplicable rate. He did not and could not plead ignorance of the change in rate of tax effected two years earlier. In the circumstances, the concept of mala fides was not relevant in the context." (emphasis Here italicised. supplied) (4) In Devi Dass Gopal Krishen Ltd. v. State of Jammu and Kashmir [2001] 121 STC 388 (SC); AIR 2001 SC 272, the facts were as follows: A notification dated March 7, 1991 issued under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 granted exemption from payment of sales tax to all the units manufacturing and carrying on business in edible oil in the State of Jammu and Kashmir. The result was that the manufacturers of the State ....
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.... J.K. Udaipur Udyog Ltd. [2004] 137 STC 438; [2004] 8 JT 137 (SC), the Supreme Court referred to the provisions of the Rajasthan Sales Tax Act, 1994 (in short, "the RST Act ") and the Central Sales Tax Act, 1956 (in short, "the CST Act"), and discussed the nature of exemptions granted under the said Acts, and the power of the State Government to modify or revoke such exemptions and the consequent liability to pay the sales tax irrespective of its collection from the customers. It was observed as under (paragraphs 25, 26, 27, 28, 31, 35 and 36 of the said STC and JT): "25. An exemption is by definition a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government so that the beneficiaries of such concession are not required to pay the tax or duty they are otherwise liable to pay under such statute. The recipient of a concession has no legally enforceable right against the Government to grant a concession except to enjoy the benefits of the concession during the ....
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....om the date of the certification of their application under clause 4(h), the right could be modified with effect from the date on which the scheme was modified. The further argument of the respondent that the subsequent notification could not be construed as a modification and would apply only to subsequent applicants is unacceptable. There is no ambiguity in the language of the subsequent notification. On the contrary the use of the word corrigendum itself indicates the intention was to correct and to rectify what the State Government thought had been erroneously done. 31.. It was to clarify this ambiguity that the subsequent notification was issued by the State Government to correct or amend annexure B to the extent that it could be interpreted in a manner not in keeping with the published industrial policy of the State and the substantive provisions of the scheme. 35.. This brings us to the last argument of the respondent-companies, viz., that they should not be made liable for the sales tax on the basis of the corrigendum for the period they had availed of the exemptions after the decision of the High Court. The submission proceeded on the basis that the High Court had qu....
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....ies. It is said that the recovery of the tax would lead to the ultimate closure of the respondent's unit which would be contrary to the very concept, object and intention of the exemption provision and policy of the State. 75.. The appellants on the other hand have relied on the State of Rajasthan v. J.K. Udaipur Udyog Ltd. [2004] 137 STC 438; [2004] 7 SCC 673, to contend that even if the respondent had not passed on its liability to and collected tax from its consumers, it was bound to pay the tax which it could and should have paid on the tiles sold by it during the period of facility. The factual basis of the respondent's claim that it had not collected tax from its customers is also disputed. It is said that the respondent had the option of collecting the tax and applying for refund under section 29A of the Act in terms of paragraph II of the industrial policy. 76.. A similar contention was considered by us in State of Rajasthan v. J.K. Udaipur Udyog Ltd. [2004] 137 STC 438; [2004] 7 SCC 673 where after considering the authorities on the issue we held: 'The mere circumstance that the respondent-companies having availed of the exemption scheme were prohib....
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....cinema hall owners/licensees). Coming now to the third submission made by the learned counsel for the petitioners, namely, that it was the duty of the licensing authority to inform the petitioners regarding violation of the aforementioned condition No. 1 by the distributor or the producer of the film "Zamin" so that the petitioners could start collecting entertainment tax from the public, we are of the view that the said submission is misconceived. The petitioners, i.e., the cinema hall owners/licensees were fully aware that under the Government order dated October 16, 2003 granting exemption from entertainment tax, the liability for payment of entertainment tax for the period of exemption could be fastened on the petitioners in case of violation of the terms and conditions of the exemption-whether by the petitioners or by the distributor or by the producer. Thus, it was the responsibility of the petitioners to ensure full compliance of the terms and conditions of the exemption. It was not the duty or the responsibility of the licensing authority to inform the petitioners (cinema hall owners/licensees) regarding any violation of the terms and conditions of the exemption by the dist....
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....rselves unable to accept the same. Proviso to sub-section (3) of section 11 of the 1979 Act, inter alia, provides that "the State Government may cancel such exemption if it is satisfied that . . . the proprietor of such entertainment has failed to comply with any of the terms or conditions imposed or directions issued in this behalf and thereafter the proprietor shall be liable to pay the tax which would have been payable had not the entertainment been so exempted". As considered in detail above, the word "proprietor" as used at two places in the above proviso has the same meaning as in section 3 of the 1979 Act, i.e., the cinema hall owner/licensee. Therefore, irrespective of the fact that the violation of the terms and conditions has been committed by the distributor or the producer of the film, the failure to comply with the terms and conditions would be attributed to the proprietor, i.e., the cinema hall owners/licensees, and the cinema hall owners/licensees would be liable to pay the entertainment tax for the period of exemption. The question may be examined from another angle also. Under subclause (i) of clause (m) of section 2 of the 1979 Act, the word "proprietor" ....