TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 1117
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.... this court in a batch of writ petitions in W.P.Nos. 16668 of 1990, etc., dated January 20, 1994 (Devi Theatre v. Deputy Commercial Tax Officer). As common questions of law and facts are involved in all these writ petitions, they are taken up together, and disposed of by a common order. Facts leading to the writ petitions are as follows: The petitioners-theatre owners have registered themselves on the files of the Entertainment Tax Officer, Omalur, the fourth respondent herein, under the Tamil Nadu Entertainments Tax Act, 1939 (hereinafter referred to as, "the Act"). For the assessment years 1977-78 (December 26, 1977 to March 31, 1978, 1979-80, 1980-81, 1981-82, 1982-83 (April 1, 1982 to October 3, 1982) (in respect of petitioner in W.P.No. 35078 of 2002), 1981-82 (January 7, 1981 to March 31, 1981), 1981-82 (April 1, 1981 to March 31, 1982), 1982-83 (April 1, 1982 to October 3, 1982) (in respect of petitioner in W.P.No. 35087 of 2002), 1978-79 (December 11, 1978 to March 31, 1979), 1979-80,1980-81,1981-82 and 1982-83 (in respect of petitioner in W.P.No. 35123 of 2002) and 1981-82 (August 31, 1981 to March 31, 1982), 1982-83 (April 1, 1982 to October 10, 1982) (in respect of pe....
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....sider the scope and the purport of the amendment. Left with no other option, the petitioners filed further revision petitions to the Joint Commissioner (CT), Chennai, the first respondent herein, reiterating the contentions made earlier. It was also brought to the notice of the first respondent, a circular instruction issued by the then Board of Revenue and communicated by the Additional Secretary to Government (CT), Chennai to all the Entertainment Officers in Ref. No. R3/426/78, dated April 10, 1978, which states that, "it is open to the licencee to fix the rates of admission below the maximum for each class and that no orders are required for reduction". It was further contended by the petitioners that when the Entertainment Tax Officers were informed that permission from the licensing authority, viz., the District Collector. is not necessary for such reduction of rates of admission, the revision of assessment for the period in question on the ground of not obtaining prior permission from the licencing authority, is illegal and contrary to statutory provisions. Despite the contentions, the first respondent herein, has mechanically confirmed the revision of assessment and dismiss....
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....ficer, Omalur, that with regard to reduction in the rates of admission, the theatre owners were not required to obtain prior permission from the licensing authorities. He submitted that all the authorities have manifestly erred in confirming the revision of assessment made by the fourth respondent, without considering the effect of the amendment in proper perspective. Referring to rule 32M of the Tamil Nadu Entertainments Tax Rules, 1939, learned counsel for the petitioners submitted that when the rates of admission are modified or revised, the tickets bearing the modified or revised rates shall not be issued until they are stamped with the seal of the Entertainments Tax Officer. In the instant case, the Entertainments Tax Officer, Omalur, fourth respondent, after verifying the rates of admission, has stamped the tickets with the seal of the Entertainments Tax Officer, for the periods in question and after the issuance of the tickets, the appropriate rate of tax on the reduced rates of admission from the patrons were collected and that the returns submitted to the competent authority were also accepted. In these circumstances, he contended that once the tickets are stamped and sea....
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....se, it is necessary to have a cursory look at some of the provisions dealing with the prescription of rates of admission by the licensing authorities, under the Tamil Nadu Cinema (Regulation) Rules, 1957 and the Tamil Nadu Entertainments Tax Act, 1939 and the Rules made thereunder. Rule 83(1A)(a) of the Tamil Nadu Cinema Regulation Rules, 1957 deals with the power of the licensing authority to fix the actual rates of admission and the same is extracted hereunder: "The licensing authority shall fix the actual rates of admission to each class of accommodation, provided in the auditorium, after taking into account the proposals of the licensee, the amenities provided in the theatre, the prevailing rates of admission in similar theatres in similar localities within his jurisdiction and any other relevant factor." Clause (c) of rule 83(1)(a) of the abovesaid Rules states that the licensing authority may, on application by the licencee, alter the rates of admission for any class of accommodation, if there has been any change in the amenities provided either in that class or accommodation or generally in the theatre for any other valid reasons. Section 5A of the Tamil Nadu Entertainment....
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....ns' means the selection grade panchayat towns specified in Schedule II; (vi) 'Townships (Municipal)' means the townships specified in Part A of Schedule III; (vii) 'Townships (Panchayat)' means the townships specified in Part B of Schedule III. Explanation III.-For the purposes of this section and section 5B 'show' means one complete exhibition or the repeated exhibition, of a full length feature film with or without approved documentaries and news reviews, for one payment for admission. (2) The tax levied under sub-section (1) shall be recoverable from the proprietor. (3)(a) Every proprietor of a cinematograph exhibition who is liable to pay tax under this section or who opts to pay tax under section 5B shall submit a return relating to the actual number of shows held by the proprietor in a week to the prescribed authority in such manner and within such period as may be prescribed and also give prior notice to the prescribed authority of any proposed variation in the gross collection capacity per show in respect of the place of entertainment. Such prior notice shall not be less than such period as may be prescribed. (b) If the prescribed authority ....
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....and after giving the proprietor a reasonable opportunity to show cause against such assessment. (2) Where, for any reason, any payment for admission to any entertainment or any cinematograph exhibition or any amount collected for television exhibition has been assessed at a rate lower than the rate at which it is assessable under section 4, or 4E, or 4F or 4G or 5A or 5B as the case may be the authority prescribed under sub-section (1) of section 7A may, subject to the provisions of subsection (3) and at any time within such period as may be prescribed, reassess the tax due on such payment or exhibition under section 4 or 5A or 5B or on such amount collected for television exhibition under section 4E, or on such payment under section 4F, or on such payment for recreation parlour under section 4G as the case may be, after making such enquiry as it may consider necessary and after giving the proprietor a reasonable opportunity to show cause against such reassessment. (3) In making an assessment or reassessment under sub-section (1) or sub-section (2), as the case may be, the authority prescribed under sub-section (1) of section 7A may, if it is satisfied that due to wilful mi....
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....ere only the maximum rates and that it was open to the licensees to fix any actual rates of admission below these maximum for each class and that no orders were necessary to reduce the maximum and that suitable instructions might be issued to the Entertainments Tax Officers. A perusal of the circular of the Additional Secretary to Government, Commercial Taxes, Madras, dated April 10, 1978, shows that after considering the representations, dated December 30, 1977 and January 25, 1978 the said authority has issued following instructions: "All the E.T. Os are informed that the licensing authority under the Tamil Nadu Cinemas (Regulation) Act, 1955, fixes only the maximum rates of admission for each class. It is open to the licensee to charge less than these rates and he need not get this actual rate incorporated in the licence so long as it is less than the maximum fixed. The E.T. Os., are therefore informed that permission from the licensing authority, i.e., the Collector, is not necessary for such reduction and it is open to the theatre owners to fix the rates of admission within the maximum rates fixed by the licensing authority. For the purpose of the TNET Act 1939, the E.T. Os.....
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.... the amendment and as interpreted by the then Board of Revenue, in their proceedings, dated April 10, 1988, wherein all the Entertainment Tax Officers, were informed that the licensing authorities under the Tamil Nadu Cinema (Regulation) Act, 1955, fix only the maximum rates of admission, for each class and it was open to the licensees to charge, less than these rates and that they need not get the actual rates incorporated in the licence, so long as it was less than the maximum rate fixed. The instructions of the Additional Secretary, Commercial Taxes, Madras makes it clear that the Entertainments Tax Officers, were informed that permission of the licensing authority, viz., the District Collector, was not required for reduction of rates of admission and it is open to the theatre owners to fix the rates of admission within the maximum rates fixed by the licensing authority. At that time, for the purpose of the TNET Act, 1939, what was required was that the Entertainment Tax Officers should deal with requests for change or variation in the gross collection capacity by virtue of any modification or revision of the rate or rates of admission in accordance with rule 32E or 32M of the ....
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....n in the rates of admission, whereas section 83(1A)(c) speaks about the power of the licensing authority to grant permission to "alter" the rates of admission to be given in writing in case of "such increase". As the Revenue has placed strong reliance on the judgment of this court made in W.P.Nos. 16668 of 1990, etc., batch, dated January 20, 1994 (Devi Theatre v. Deputy Commercial Tax Officer [1994] 5 MTCR 183), it is necessary to consider as to whether there is any similarity of facts and whether the contentions raised in the present writ petitions, with reference to the interpretation of the word "alter" employed in condition No. 6 of the C form licence, as it stood in the year 1979 and later on amended in 1982, by G.O. Ms. No. 1016 were considered or not. Facts of the above unreported judgment are as follows: "Two theatres in Salem District have questioned the revision of assessment for the years 1981 to 1984 and the consequential demand notice issued to them for the difference of compound tax. The licensees of the said theatres opted to pay entertainment tax under section 5B of the Tamil Nadu Entertainments Tax Act, 1939 (Tamil Nadu Act X of 1939) every week. They had to spe....
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.... such away, as a matter of business prudence, to void the burden of tax is not bad in law. (3) The licensing authority-District Collector's approval for reduced rates of admission should be presumed to be retrospective in operation. (4) Entertainments Tax Officer has no powers of revision. (5) Entertainments Tax Officer acts in a quasi-judicial way in assessment proceedings and therefore, it is, he has to apply his mind in passing such orders, without his being mandated to do so in a particular manner by his superiors, by issuance of a circular, or order or instructions of any kind." In the above unreported judgment, though initially the reduced rates of admission were not approved by the competent authority, the returns submitted by the licencees on the reduced rates of admission and consequent payment of tax had been accepted by the Entertainments Tax Officer. Besides the tickets bearing the revised or modified rates of admission were also sealed for issuance to the patrons in the auditorium during the periods covered by the revision of assessment relatable to the years in question. Facts further disclose that the licensing authority, the District Collector, appeared to ....
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....ad in law. On the facts of the above case, finding that the licensing authority had not approved the reduction in rates of admission for various classes and after observing that the orders passed by the Entertainments Tax Officer, accepting the returns and the consequent issuance of the sealed tickets, as not in accordance with the mandate of law, the learned judge has sustained the revision of assessment and consequential demand notices, issued to the aforesaid licensees for the period stated surpa. Reading of the judgment in entirety would show that the correctness of the revision of tax and the consequential demand notices were decided on the ground of not obtaining prior approval from the licensing authority for the period in question, regarding the reduced rates of admission by the licensees, the points framed for consideration in the unreported judgment, with due respect, in my considered opinion, do not deal with the issue, raised in the present writ petitions, i.e., as to whether the theatre owners should obtain prior approval from the licensing authorities in the case of reduction in rates of admission, before the amendment to condition No. 6 of C form licence, which sub....
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.... to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasonings.' It is also necessary to keep in mind the following principles laid down in Government of Karnataka v. Gowramma AIR 2008 SC 863 with reference to precedential value of decisions: '. . . "Reliance on the decision without looking into the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a judge while giving (a) judgment that constitutes a precedent. The only thing in a judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates: (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the judge draws from the direct, or perceptible facts; (ii)....
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....ts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclid's theorems nor as provisions of (the) statute and that too taken out of (the) context. These observations must be read in the context in which they appear to have been stated'." (emphasis1 supplied) The position as on May 18, 1979, till condition No. 6 was amended by G.O. Ms. No. 1016, Home (Cinema) Department, dated April 23, 1987, is as follows: "(1A). (a) The licensing authority shall fix the actual rates of admission to each class of accommodation, provided in the auditorium after taking into account the proposals of the licensee, the amenities provided in the theatre, the prevailing rates of admission in similartheatres in similar localities within his jurisdiction and any other relevant factor. (b) The rates prescribed for each class of accommodation in the auditorium shall be clearly indicated by means of a beard or otherwise. (c) The licensing authority may, on application by the licensee, alter the rates of admission for any class of accom....
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....ass of accommodation, then approval in writing would be required for any alteration in the rates of admission, whether reduction or increase. Literal meaning of the sentence conveys that permission is required only in the case of increase. If the word "alteration" employed in condition No. 6 of C form licence has to be meant to include reduction or increase, even prior to the amendment, then there is no necessity for amending the rule by substitution. By bringing in an amendment, i.e., substitution of the word, "increase" as "alteration", it could be easily be inferred that the Legislature has intended to extend the scope of the word, "alteration" and the power of the licensing authority. Substitution of the word must have been done with some purpose and the purpose, which this court could understand from the earlier proceedings of the Board of Revenue and the Government Order in G.O. Ms. No. 1245, Home (Cinema) Department, dated May 18, 1979, is that the Legislature has intended to employ an appropriate word or expression of connotation to include not only the increase in rate of admission, but also other kinds of alteration. It is well-settled principle that courts cannot aid t....
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....he section in such manner as to render it to some extent otiose. Section 8(1) says that the special judge shall take cognizance of an offence and shall not take it on commitment of the accused. The Legislature provided for both the positive and the negative. It positively conferred power on special judge to take cognizance of offences and it negatively removed any concept of commitment. It is not possible therefore, to read section 8(1) as canvassed on behalf of the appellant that cognizance can only be taken upon a police report and any other view will render the safeguard under section 5A illusory." In State of Kerala v. Mathai Varghese reported in [1986] 4 SCC 746, where at paragraph 6, the Supreme Court held as follows: "The court can merely interpret a provision so as to make explicit the intention of the Legislature. It cannot rewrite, recast or redesign the provision since the power to legislate has not been conferred on the court. The court should make a purposeful interpretation so as to 'effectuate' the intention of the Legislature and not a purposeless one in order to 'defeat' the intention of the legislators wholly or in part." In Gwalior Rayons Silk ....
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....hat the words themselves best declare the intention of the law-giver. The courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the Legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute. . ." At paragraph 14, the Supreme Court in J.P. Bansal v. State of Rajasthan reported in [2003] 5 SCC 134, held as follows: "14. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the Legislature is clearly conveyed, there is no scope for the court to innovate or take upon itself the task of amending or altering the statutory provisions. In that situation the judges should not proclaim that they are playing the role of a law-maker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed or erased.This can be vouchsafed by 'an alert recognition of the necessity not to cross it and instinc....
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.... is well-settled that unless the language of G.O., by which, an amendment is made, clearly expresses the intention of the rule-making authority to the effect that the amended rule should be given retrospective effect, the same must be presumed to have only prospective effect. In the case on hand, condition No. 6 in C form licence as it stood prior to the amendment, is indicative of only increase in rates of admission. By way of an amendment in G.O. No. 1016, the word "increase" has been substituted as "alteration". The amendment does not speak about any retrospective effect. In this context, it is useful to refer to few decisions of the Supreme Court regarding retrospective effect. In Municipal Corporation for the City of Poona v. Bijlee Products (India) Ltd. reported in [1978] 4 SCC 214, the Supreme Court held that the interpretation that the exemption already granted shall continue until the expiry of the respective periods of their grants will be fully in consonance with the principle that any amendment affecting the legal rights of an individual must be presumed to be prospective unless it is made expressly clear or by necessary implication that it is retrospective. In case th....