TaxTMI 
TaxTMI 
2016 (9) TMI 310
X X X X Extracts X X X X
X X X X Extracts X X X X
....07-1.2.2008 and therefore, by virtue of the Govt. Notification dated 29.3.2008 (Annexure-I), the exhibitors seek exemption from the liability to payment of tax, for a period of five years. The exemption notification was issued under Sub-Section (2) of Section 8 of the Assam Act. The petitioners in this batch of litigations can be divided in two groups. The first is the M/s. PVR Ltd. who have filed the WP(C) No.4477/2014, WP(C) No.4480/2014 and WP(C) No.4479/2014 and they claim that they have not collected the tax, whereas the 2nd group of M/s. Mridul Properties (P) Ltd., in the other five cases, have admittedly recovered the entertainment tax, from the movie-goers. 3. The cases have common facts and hence for the sake of convenience, the narratives in this order are extracted from the WP(C) No.4477/2014, filed by the M/s. PVR Ltd. BACKGROUND FACTS 4. Through the notice dated 12.9.2012 (Annexure-IV), the Superintendent of Taxes alleged that the Exhibitors were unauthorisedly collecting tax from the movie-goers and accordingly demand was made for deposit of the collected amount or else, tax would be assessed under the Assam Act. In their response, the first group contended that en....
X X X X Extracts X X X X
X X X X Extracts X X X X
....demand like the first group, the aggrieved exhibitors filed Revision Petition(s) against the assessment order passed by the Superintendent of Taxes. But since those were rejected by the common order dated 20.5.2014 (Annexure-XXII), the first group having realized the futility of revision, have decided to challenge the order in the High Court. SUBMISSION OF PETITIONERS 9. Dr. A. Saraf, learned Senior Counsel submits that tax is to be charged, levied and paid to the Government under Section 3 of the Assam Act. Here incentive to set up multiplex/mini cinema halls was provided by the Government by exempting the liability to payment of entertainment tax to those, who set up their projects in Assam during 1.4.2007-1.2.2008. Accordingly it is argued that such incentive to the multiplex/mini cinema halls is intended to encourage business activities and since they are exempted from the tax liability, there can be no assessment for the exhibitors to tax, under Section 5-A of the Assam Act. 10. The petitioners refer to the fact that the exemption notice was issued under Sub-Section (2) of Section 8 of the Assam Act and therefore it is contended that there is no absolvement from charging ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itors is impermissible and the collected money has to be deposited in the state exchequer. 16. The respondents argue that tax is to be collected for entertainment of the movie-goers and the role of the exhibitors is only to collect the tax on behalf of the state. But when the tax is exempted under Section 8 of the Assam Act, the movie-goers are to be absolved and if any such tax is collected, the retention thereof in the hand of the exhibitors, will certainly be unjust enrichment. 17. The learned counsel for the Revenue submits that the benefit envisaged under Section 8 is for the movie-goers and the exhibitors are not the targeted beneficiary. In support Mr. Saikia refers to the manner of granting exemption, under the Assam Amusement and Betting Tax Rules, 1939 (hereinafter referred to as "the Rules'). Under Rule 2(4) read with Rule 12, every Exhibitor is required to keep at the place of entertainment, the register books of tickets and also registers of payments for admission and the records of stamps denoting the entertainment tax purchased and used in prescribed formats. He refers to Form No.V, prescribed under Rule 20 which certifies tax exemption. The exhibitor is obliged to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate. 23. Mr. Saikia refers to the Govt. Notification dated 30.3.2007, to contend that whenever tax is exempted under some incentive policy, the exemption notification lays down the manner and mode of disbursal of incentives. But here it was never indicated that the exhibitors are entitled to retain the collected tax and therefore it is argued that retention of the collected sum, can't be allowed. 24. The respondents' lawyer refers to the assessment proceedings to contend that the exhibitors were given opportunities to produce the ticket counter-foils and also the other documents mentioned in the Rules but they failed to produce them, despite due opportunities. Therefore it is argued that the authorities had rightly made assessment on the basis of best judgment, as provided under Section 5-A(2) of the Assam Act. DISCUSSION AND CONCLUSION 25. The submission made by the rival Counsel have received our earnest consideration. 26. We find that the charging section of the Assam Act refers to charge, levy and payment of entertainment tax and the taxable event is on admission to entertainment. Under sub-section (6) of Section 3, the proprietor of the entertainment is made liable to pay....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee had collected sales tax in respect of its sale turnover for which exemption was claimed and as such, the said amount was refundable under Section 8(B) of the Jammu & Kashmir General Sales Tax Act, 1962. The Court while leaving the question of applicability of Section 8(B) in that case open, held that whether any element of sale tax had merged in the fixation of the sale price and that amounts to collection of sales tax, would have to be decided in a separate proceeding that may have to be initiated under Section 8(B) of the said Act, if the State demands payment under the said provision of the Act. 30. In a similar situation, where the assessment was completed by levying tax during the period of exemption on the ground that in spite of the exemption being granted, the assessee charged and collected tax, this Court in Mahabir Coke Industries Pvt. Ltd. Vs. Commissioner of Taxes reported in (2003)5 GLR 175 quashed the orders of assessment by holding that if any allegation of unauthorized collection of tax is established, the consequences as provided in Section 65A of the Assam General Sales Tax Act, 1993 which related to forfeiture of the unauthorized collection of tax and/or S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d (cine-goer) but also the one who admits (exhibitor). Therefore in our analysis, the person entertained and the person providing entertainment should stand together and this is possible only when, we interpret the words in the charging section in their natural meaning. In other words, admission to entertainment can't have the same meaning as the person entertained. Thus we hold that the decision in State of Karnataka vs. Drive-in-Enterprises reported in (2001) 4 SCC 60 will not apply in these cases in the context of the Assam Act. 33. The scheme of the Assam Act is that notwithstanding the collection of tax from the cine-goers, the liability to pay the tax remains with the exhibitors. To understand the implication thereof, we may again benefit by referring to the levy of sales tax where the charge is on the dealer. Similarly for central excise duty, the charge is on the manufacturer. But in both process, while the taxable event is sale or manufacture as the case may be, the tax is collected from the consumer. But non-payment of tax by the consumer is never a relevant factor to determine the liability of the dealer/manufacturer. Therefore tax liability and actual payment of tax ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h one operates on a different field. The sub-section (1) speaks of not charging tax on certain exigencies whereas sub-section (2) speaks of exemption from liability to pay the entertainment tax. When such distinction is made by the law makers in Section 8 itself, the formats and certificates specified under the Assam Rules has to be understood in the context of the exemption under Section 8(1). Blind application of the prescribed forms, certificates and registers in the Assam Rules for the sub-section (2) exemption (where they do not fit in), will naturally lead to an absurd situation. 38. The plain reading of Rule 19 and 20 of the Assam Rules would show that the same is applicable only in respect of exemption granted under Section 8(1) of the Act. While the Rule 19 do make reference to Section 8 generally but if we read Rule 19 together with Rule 20 and Form V, it becomes clear that the Rules are not applicable for exemption granted under Section 8(2) of the Assam Act. In this connection, the contention of the petitioner gets fortified by the circular No.CTA-41/84/9 dated 06.02.1987 issued by the Commissioner of Taxes, Assam. The govt. circular says that the exemption is to be ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... learned Addl. Advocate General that the exemption notification shouldn't be construed in favour of the petitioners since mode and manner of disbursal of incentives is not prescribed here unlike in the Govt. notification dated 30.3.2007 issued under the State's Industrial Policy. The context in which tax incentive was granted by the Govt. notification dated 30.3.2007 are clearly distinguishable from the present situation. In our perception, elaborate mechanism is unnecessary here since the exhibitors are simply made free of their obligation to pay to the State, the collected tax. Therefore the argument on this issue do not aid the respondents. 42. The Madras High Court in P. Sankara Narayanan (supra) while examining a challenge to levy of higher tax for dubbed films had described that exhibitors is simply a collection agent since the burden of taxation is ultimately passed on the cine-goers. But in the face of the exhibitor's obligation under Section 3(6) of the Assam Act, the primary liability to pay the entertainment tax under the enactment we are considering, is on the exhibitors and therefore the passing observation of the learned Judge of the Madras High Court in the context ....