DARSHAN LAL MEHRA AND 23 OTHERS versus UNION OF INDIA AND OTHERS

Citation: [1992] 3 S.C.R. 704 · Decided: 04-08-1992 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
DARSHAN LAL MEHRA AND 23 OTHERS 
v. 
UNION OF INDIA AND OTHERS 
AUGUST 4, 1992 
B 
[KULDIP SINGH AND K. RAMASWAMY, JJ.) 
U.P. Nagar Mahapalika Adhiniyam, 1959-Sections 172, 2(77j-
Tlteatre tax under Lucknow Nagar Mahapalika Theatre Tax Rules, 1965-
Fixing rate of tax on the basis of annual rental value of Cinemas-Wltether 
C 
arbitrary or violative of Article 14 of the Constitution of India, 1950. 
The proposal of the Nagar Mahapalika, Lucknow to levy theatre tax, 
@ Rs.S per cinema show held in a building assessed on annual rental value 
of Rs. l~,000 or more and @ Rs. 3 per cinema show held in a building 
assessed on annual rental value of less than Rs. 10,000 was accepted by 
D the State Government by following the procedure laid-down under the U.P. 
Nagar Mahapalika Adhiniyam, 1959. 
The Lucknow Nagar Mahapalika Theatre Tax Rules, 1965 were 
framed and enforced with effect from December 15, 1965 and the theatre 
E tax was levied with effect from June 1,1967. · 
The rate of tax was increased from time to time and finally by a 
notification dated October 30, 1979 the theatre tax was enhanced to Rs. 25 
per show on all class-I cinemas with annual rental value of more than Rs. 
10,000 and Rs. 20 per show on all class II cinemas with annual rental value 
F 
of Rs. 10,000 or less. 
The theatre tax imposed by Nagar Mahapalika; Allahabad was chal-
lenged before the High Court under Article 226 of the Constitution of 
India. A Single Judge of the High Court dismissed the writ petition. Appeal 
G against the judgment of the Single Judge was dismissed by a Division 
Bench, which was reported as Niranjan Lal Bhargava Trust, Allahabad v. 
State of U.P. & others, (1972) All. L.J. 279. 
Petitioner No.6 challenged the initial imposition of theatre tax by 
filing a civil suit in the court of Civil Judge, which was dismissed. A Single 
H Judge of the High Court, following the judgment in Niranjan Lal Bhargava 
704 
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DARSHAN MEHRA v. U.0.1. 
705 
~-.-..( 
Tmst case, dismissed the second appeal filed by him. 
A 
About 20 days after the dismissal of the regular second appeal by , 
.the High Court, the petitioners ~led a Write Petition No.35Un6 in the ' 
High Court challenging the imposition of theatre tax. The said petition is 
still pending before the High Court. 
,B 
The petitioners - the cinema owners/lessees in these Writ petitions 
under Article 32 or the Constitution or India challenged the imposition of 
-------\ 
theatre tax by the Respondent-Nagar Mahapalika, Lucknow, contending 
that Section 172(2) of the Act was unconstitutional because the legislature 
abdicated its function by delegating the essential legislative powers upon c 
-
t~e Nagar Palikas to levy all or any of the taxes enumerated in the Section; 
that the classification of cinemas on the basis of annual rental value for 
the purpose of fixing the rate of tax was arbitrary and as such was violative 
~ 
of Article 14 of the Constitution of India; and that the classification had 
no nexus with the objects sought to be achieved. 
D, 
Dismissing the writ petitions of the cinema ownen/lessess, this Court, 
HELD : 1.01. The taxes under Section 172(2) of the U.P. Nagar 
Mahapalika Adhiniyam, 1959 can be levied by the Mahapalikas only for 
implementing those purposes and for no other purpose. The Mahapalikas 
/ 
have to provide special civic amenities at the places where cinemas/ E 
-., 
theatres are situate4. So long as the tax has a reasonable relation to the 
purposes of the Act the same cannot be held to be arbitrary. The rate of 
-
tax to be levied and the persons or the class of persons Hable to pay the 
same is determined by inviting objections, which are finally considered and 
decided by the State Government. (709 F-H] 
F 
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1.02. The tax is levied in accordance with the statutory rules framed 
by the State Government and the said rules are laid before each House of 
the State Legislature for not less than 14 days and are subject to such 
modifications as the Legislature may make during the session they are so 
laid. [710A] 
G 
' 
Gopal Narain v. State of Uttar Pradesh and Anr., (1964) 4 S.C.R. 869 
~ 
" 
and The Western India Theatres Limited v.Municipa/ Corporation of the City 
of Poona, (1959) Supp. 2 S.C.R. 71, followed. 
1.03. The annual rental value under the Act indicate the extent of the H 
706 
SUPREME COURT REPORTS 
{1992] 3 S.C.R. 
A 
accommodation, its quality, the locality in which it is situated and other 
factors which relate to the enjoymen

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