AASHIRWAD FILMS versus UNION OF INDIA & ORS.

Citation: [2007] 7 S.C.R. 310 · Decided: 18-05-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
AASHIRWAD FILMS 
::..:--· . 
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v. 
UNION OF INDIA & ORS. 
MAY 18, 2007 
B 
[S.B. SINHA AND MARKANDEY KA TJU, JJ,] 
Andhra Pradesh Entertainment Tax Act, 1939-Entertainment Tax-On 
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motion film-Rate of tax on Hindi films at 24% while on Telugu films at 
c JO<yo-Constitutionality of-Held: The /el'y being discriminatory is violative 
of Article 14 of the Constitution-The classification on the basis of language 
without anything more and particular(v with regard to difference in the rate 
of tax is arbitrary-The extent of reasonability of any taxation statute lies 
in its efficiency to achieve the object sought to be achieved by the statute-
The classification must bear the nexus with the object sought to be achieved-
D The object of the taxation statute must be read on the touchStone of social 
values-Court is generally not concerned with the rate of tar: unless the same 
is whol(v arbitratJ' or conjiscatory--Court may take adverse note of the 
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taxation statutes, if they disturb the social fabric-Constitution of India, 
1950-Articles 14, 19, 21 and 351 Schedule Vil, List 11, Entry 62. 
E 
Interpretation of Statutes-Taxing Statutes-Interpretation of-Held: 
Tar:ing statute like penal statutes should receive strict construction. 
The petitioner was the distributor of Hindi films in the State of Andhra 
Pradesh. State of Aildhra Pradesh enacted Andhra Pradesh Entertainment 
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Tax Act, 1939 whereby tax in respect of Telugu films was fixed at 10% and 
that of non-Telugu was fixed at 24%. Petitioners' representation for grant of 
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tax relief to the Hindi Films on par with Telugu films was rejected. Hence the 
present Writ Petition. 
Allowing the Writ Petition, the Court 
G 
HELD: 1.1. The purported classification only on the basis of language 
without anything more and in particular having regard to the difference in 
the rate of tax is exfacie arbitrary. The burden was, therefore, on the State to 
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show that the imposition was justified. f Paras 25) (320-G) 
Jr-" 
H 
310 
AASHIRWADFILMSv. U.0.1. 
311 
1.2. Though taxation laws must also pass the test of Article 14 of the A 
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Constitution of India, yet a taxation statute for the reasons of functional 
expediency and even otherwise, can pick and choose to tax some. Importantly 
there is a rider operating on this wide power to tax and even discriminate in 
taxation: that the classification thus chosen must be reasonable. The extent 
of reasonability of any taxation statute lies in its efficiency to achieve the B 
object sought to be achieved by the statute. Thus the classification must bear 
a nell.us with the object sought to be achieved. (Para 14) (316-C, DJ 
.J._ 
Mis Chhotabhai v. Union of India, AIR (1962) SC 1006, relied on . 
.,I, 
"' 
Moopil Nair v. State of Kera/a, AIR (1961) SC 552; East India Tobacco c 
' 
Co. v. State of Andhra Pradesh, AIR (1962) SC 1733; V. Venugopala Ravi 
Varma Rajah v. Union of India and Anr., AIR (1969) SC 1094; Assistant 
Director of Inspection Investigation v. Kum. A.B. Shanthi, AIR (2002) SC 2188 
and The Associated Cement Companies Ltd v. Government-ofAndhra Pradesh 
and Anr., AIR (2006) SC 928, referred to. 
1.3. Objective in a statute may have a wide range. But the entire matter D 
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should also be considered from a social angle. In any case, it cannot be the 
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object of any statute to be socially divisive in which even it may fall foul of 
broad constitutional scheme enshrined under Articles 19, 21 as also the 
Preamble of the Constitution oflndia. (Para 15) (316-F) 
E 
1.4. In that behalf, it is important to read the object of a taxation statute 
on the touchstone of social values as mentioned in the Constitution. An adverse 
conclusion can be drawn if a particular statute goes against such values. It is 
one thing to say.that the taxation statute does not further social good, but 
quite another when it disturbs the social fabric. The court may take adverse F 
note in respect to statutes falling in the latter category. 
_, -"y, 
[Para 16) [316-G; 317-A] 
Sri Srinivasa Theatre and Ors. v. Government of Tamil Nadu and Ors., 
[1992) 2 SCC 643 and Elel Hotels and Investments Limited and Ors. v. Union 
of India, (1989] 3 SCC 698, relied on. 
G 
1.S. It is difficult to laud tbe objective of the taxation statute in the instant 
matter which differentiates on the basis of language·alone. This is definitely 
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divisive of social attributes of the polity and Article 14 in its basic form i.e. 
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