LexENTERTAINMENT TAX OFFICER, MADHAPUR CIRCLE, HYDERABAD versus M/S. HI TECH THEATRE, MADHAPUR, HYDERABAD
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ENTERTAINMENT TAX OFFICER, MADHAPUR CIRCLE,
A
HYDERABAD
v.
MIS. HI TECH THEATRE, MADHAPUR, HYDERABAD
SEPTEMBER 24, 2007
B
)...!
[S.B. SINHA AND H.S. BEDI, JJ.]
Andhra Pradesh Entertainment Tax Act, 1939:
S.5-Tax payable by cinema owner dependant on gradation of c
municipality-Upgradation of municipality-Assessing officer
ignorant of upgradation-:-Mistake thereby in computation of tax
payable-Held: Mistake can be rectified-Question as to quantum of
difference may be determined by appropriate authority after giving D
opportunity of hearing to assessee-However, assessee not liable to
pay any penalty and interest on the said amount.
Respondent owner of a cinema theatre was liable to payment
of entertainment tax. S. 5 of Andhra Pradesh Entertainment Tax Act,
provided for computation of tax on the basis of an option to be E
exercised by the owner of the theatre subject to the conditions as
may be prescribed therefor. The scheme for exercise of such an
option is that; (i) a proprietor has to file an application in the
::-{
prescribed form before the prescribed authority; (ii) the authority
would pass an order upon giving an opportunity of hearing to the F
owner of the theatre for correct determination of the amount and
the nature of security to be furnished by the proprietor for proper
payment of tax and the time within which such security to be
furnished; (iii) once such security is furnished the Entertainment Tax
,>.,
Officer is required to grant a permit in the prescribed form, namely, G
Form IV wherafter, the proprietor of the cinema theatre is to pay
tax in the manner indicated therein.
The cinema theatre in question is situated within
Serilingampally Municipality. In terms of Notification dated
605
H
606
· SUPREME COURT REPORTS
[2007] 10 S.C.R.
A 18.5.2001, the Municipality was upgraded to Grade II from Grade
III. The respondent filed application in terms of the scheme prior to
18.5.2001.
B
Form IV was issued to the respondent on 25.5.2001.
During assessment of tax proceedings in terms of the option
exercised by the respondent, the Entertainment Tax Officer was not
aware of the factum of upgradation of the Municipality in terms of
the said Notification dated 18.5.2001. The mistake was pointed out
only by the Office of the Accountant General. A show cause notice
C in terms ofs. 5(6) of the Act was, therefore, issued on the respondent
on or about 24.6.2005.
The question for consideration before this Court is whether in
terms of s. 5(6), an order of varying the quantum of tax could be
D passed only during the currency of period for which such tax is to be
paid.
Pa1ily allowing the appeal, the Court
HELD: 1. Io the fact situation attention of the assessing
E authority might not have been drawn to the Notification dated
18.5.2001 in terms whereof the Municipality was upgraded from
Grade III to Grade II, a mistake was committed in the matter of
computation of tax. If a genuine mistake has been committed not
only by the assessing authority in the said matter and furthermore
)~
F as the respondent also did not bring the same to the notice of the
said authority, interest of justice would be subserved if the said
mistake be allowed to be rectified. [Para 10] [609-C-D]
2. The question in regard to the quantum of difference may be
determined by an appropriate authority after giving an opportunity
G of hearing to the respondent. The respondent shall neither be liable
to pay any interest on the said amount nor shall not be exigible to
any penalty. [Para 14] [611-E]
Swamy Theatre, Sanatnagar v. Deputy Commercial Tax Officer,
Sanatnagar, Hyderabad, (1992) Vol.15; A.P. Sales Tax Journal 63;
H
••
ENTERTAINMENTT AX OFFICER, MADHAPUR CIRCLE, 607
v. M/S.HITECHTHEATRE,MADHAPUR [SINHA,J.]
Union of India and Ors. v. Bikash Kuanar, (2006) 10 SCALE 86 and A
Shri Shekhar Ghosh v. Union of India andAnr., (2006) 11SCALE363,
referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4491 of
2007.
From the Judgment and final Order dated 6.1.2006 of the High Court
of Judicature of Andhra Pradesh at Hyderabad in W.P. No. 20087 of
2005.
R. Sundervardhan, Manoj Saxena, Rahul Shukla and T.V. George
for the Appellant.
N. Annapoorani for the Respondent.
The Judgment of the Court was delivered by
S.B. SINHA, J. Delay condoned.
Leave granted.
(1) Interpretation ofSub-section(6) of Section (5) of the Andhra
Pradesh Entertainments Tax Act, 1939 in the facts and circExcerpt shown. Read the full judgment & AI analysis in Lexace.