2019 (9) TMI 641

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....aining and running cinema theatres for exhibition of movies. It is a registered dealer under the Act of 1939 and an assessee on the rolls of the third respondent. While so, the erstwhile Government of Andhra Pradesh notified G.O.Ms.No.604, Revenue (CT.IV) Department, dated 22.04.2008, granting exemption from entertainment tax leviable under Sections 4(1) and 4(1A) of the Act of 1939 in relation to feature films/low budget films produced in the then State of Andhra Pradesh. According to the petitioner company, as and when such movies were exhibited in its theatres, it availed the benefit of G.O.Ms.No.604 dated 22.04.2008. While so, the third respondent issued show-cause notice dated 15.12.2015 calling upon it to explain as to how it had claimed exemption under the aforestated G.O. when it did not comply with the conditions mentioned therein during the tax periods 2011-12 to 2014-15. According to the third respondent, the petitioner company was liable to pay Rs. 99,46,735/- in this regard. The petitioner company sought four weeks time on 21.12.2015 so as to obtain documents and submit detailed objections to the show-cause notice. Thereafter, it submitted its reply on 11.01.2016, fu....

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....r company therefore assailed the action of the third respondent in passing the assessment orders solely on the ground that such certificates were not furnished in advance. According to the petitioner company, the authorities had at all times taken note of the fact that certificates would be issued by APFTTDC only after release of the movies and permitted submission of such certificates not in advance but after the release. According to it, a hyper-technical approach was being adopted by the third respondent and that too, only in its case as it had alone been singled out for denial of exemption though the same was extended and granted to all other similarly situated assessees. 3. The third respondent filed a counter stating as follows: The petitioner company responded to the show-cause notice dated 15.12.2015 issued for the tax periods 2011-12 to 2014-15, by filing copies of the certificates in relation to the sum of Rs. 86,30,675/- on 11.01.2016 but such certificates were not produced in advance, as required. As the assessment for the year 2011-12 was getting time barred, the assessment order dated 16.03.2016 was passed quantifying the differential tax amount payable by the petit....

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....re film means any film produced with not exceeding 35 prints. (3) The proprietor shall intimate the concerned Entertainment Tax Officer in advance in writing the particulars of screening the feature films/low budget films produced in Andhra Pradesh in the Application form appended to this notification; (4) In case the number of prints is increased beyond 35 prints, the said exemption available as per the amount for Low Budget films will not be available from the date of increase in the number of prints; and (5) Any misuse of this exemption will result in the cancellation of license under the Andhra Pradesh Cinema (Regulation) Act, 1955.' In terms of Clause (3) set out supra, the proprietor of the theatre was required to intimate to the concerned Entertainment Tax Officer, in advance and in writing, the particulars of the feature films/low budget films produced in Andhra Pradesh screened in the said theatre in the application form appended to the notification. The said application form specifically required certified copies of the affidavit of the producer and the certificates of the Andhra Pradesh Film Development Corporation. Therefore, as per this G.O., the theatre pro....

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....aulted in some minor or inconsequential aspects which could not be described as the 'essence' or the 'substance' of the requirement. Noting that a fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefit of an exemption clause, the Supreme Court observed that substantial compliance would be insisted upon with the enactment, where mandatory and directory requirements are lumped together. In such a case, per the Supreme Court, if mandatory requirements are complied with, it would be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance with directory requirements. The Supreme Court held that the doctrine of substantial compliance sought to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. 8. This principle was applied by a Division Bench of the High Court f....