Partly allowed

Inox Leisure Limited v. State of Maharashtra and Ors.

Bombay HC21 Dec 2017WP/13926/2017

Case brief

AI extract

What is this about?

This writ petition challenged an appellate order and demand notice regarding entertainment duty. The court set aside the proceedings, noting the appellate authority failed to address the petitioner's claim of tax exemption versus non-leviability and lacked independence. The matter was remanded to the Principal Secretary for a rehearing.

What did the court decide?

Impugned order dated 19/09/2017 and demand notice dated 08/12/2017 quashed. Matter remanded to Principal Secretary, Dept. of Revenue and Forest for rehearing.

Inox Leisure Limited Vs State of… — Constitutional and Fundamental Rights | Bombay HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

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WRIT PETITION NO. 13926 OF 2017

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Inox Leisure Limited … Petitioner Vs. State of Maharashtra & Ors. … Respondents

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Mr. R. A. Dada, Senior Advocate a/w Mr. Harish Pandya, Ms. Kathleen Lobo & Ms. Shobhana Narayan i/by Khaitan & Co. for the Petitioner.

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Mr. P. P. More, AGP for Respondent-State.

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Ms. Sushma Chaudhari, Entertainment Duty Officer, Pune, present.

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CORAM : S. C. DHARMADHIKARI & SMT. BHARATI H. DANGRE, JJ.

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DATE : DECEMBER 21, 2017.

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P.C. :

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This Petition under Article 226 of the Constitution of India challenges the order passed on 19^th September, 2017 and a Demand Notice dated 8^th December, 2017.

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Mr. Dada, learned Senior Counsel appearing on behalf of the petitioners, on the earlier occasion and even today, submitted that the petitioners had been exempted from payment of entertainment duty under the Maharashtra Entertainments Duty Act, 1923.

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The argument is that there was some exemption known as tax holiday/exemption from tax for the initial period. The initial period commences from 2002-2003 till 2006-2007. The impugned order proceeds on the footing that the petitioners have collected the entertainment duty but have not remitted the same to the Government treasury. That is why the demand was justified. Mr. Dada would submit that there is a distinction but an important one in law, namely, tax holiday or exemption from payment of tax and tax/duty being not leviable or payable at all. In the former case, the enactment applies and the duty is leviable but the parties like the petitioners are exempt from payment thereof for a specified period. Through such mechanism, according to him, there is a notional recovery and not actual one, which can be deduced from the record. The records have been maintained only for the purpose of computation and calculation, but there is no actual collection. The customers or the viewers-public have not been called upon to pay the duty amount. All that they have to do is pay the price for ticket to the entertainment.

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Mr. Dada would submit that this vital distinction has completely missed the attention of the concerned appellate authority before whom a statutory appeal was filed challenging the order of assessment and the demand.

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Our attention is invited to the specific averments in that behalf in the Petition.

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On the last occasion and today, we perused the appellate order with the assistant of both, Mr. Dada, learned Senior Counsel and Mr. More, learned AGP. We find from the record that the register which is maintained by the petitioners/original appellants styled as “DCR Register” is relied upon to hold that there is recovery of entertainment tax from the audience. However, the position is quite otherwise. The petitioners had pointed out that notional calculations have been made of the entertainment duty liability, but there is no actual imposition, much less recovery of the amount from the viewer of the cinema/ cine goers . In the sense, that is not separately computed and recovered from the viewer in the price of the ticket. The records, therefore, could not have been relied upon to confirm the demand.

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We had invited the attention of Mr. More to the fact that there was a specific contention raised in the memo of Appeal and even in the oral arguments. In the order under challenge, the appellate authority in para 4 (sub-paras 4.1 to 4.12) notes the contentions of the petitioners-appellants. Though Mr. More would justify the conclusions which are in paras 5.1 to 5.3, what we find is, there is absolutely no discussion, much less independent application of mind to the contentions and arguments raised before the appellate authority. There is no reference made to the above distinction in law, nor to the argument that the judgment of the Hon'ble Supreme Cort on the point of unjust enrichment would be inapplicable on facts.

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We therefore, indicated to Mr. More that we are inclined to quash and set aside the order dated 19^th September, 2017, which even otherwise was not communicated to the petitioners in time. They became aware of such an order only when they were served with a notice of demand and seeking to recover the amount under the said notice as arrears of land revenue. Hence, the impugned orders are set aside.

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To enable Mr. More to take instructions, the matter was posted today and final orders were not passed earlier. Mr. More, on taking instructions from the concerned official, stated that the Department of Revenue, Government of Maharashtra is ready and willing to re-hear the Appeal preferred by the petitioners and it is for this Court to determine whether it can be heard by the same gentleman or a Secretary in the Department.

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We had indicated that we are not inclined to sent the matter back to the same gentleman, namely, Minister of Revenue, Relief & Rehabilitation and Public Works (Excluding Public Undertakings), for it seems from the impugned order that he has clearly indicated his mind to confirm the demand. We want an independent and impartial adjudication. The approach should be unbiased as well. In the circumstances, while we quash and set aside the impugned order and the notice of demand, we relegate the matter, as an Appellate Authority to the Principal Secretary in the Department of Revenue and Forest, Government of

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Maharashtra. He shall decide the subject Appeal of the petitioners. We clarify that we have not accepted either stand of the petitioners or that of the Government. All contentions on merits of the Appeal are kept open. Let the respondents give sufficient advance notice to the petitioners and when we say sufficient, at least 10 days advance notice of the date of hearing. The Writ Petition is disposed of with the above directions. There shall be no order as to costs.

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(SMT. BHARATI H. DANGRE, J.) (S. C. DHARMADHIKARI, J.)

Inox Leisure Limited v. State of Maharashtra and Ors.

Case brief

What is this about?

What did the court decide?

Inox Leisure Limited v. State of Maharashtra and Ors.

Case brief

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