M/S. JASWANT TALKIES versus COMMERCIAL TAXES OFFICER, BHILWARA

Citation: [2007] 11 S.C.R. 1075 · Decided: 12-11-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

) 
MIS. JASW ANT TALKIES 
A 
V. 
COMMERCIAL TAXES OFFICER, BHILWARA 
NOVEMBER 12, 2007 
[DR. ARIJIT PASAYAT AND D.K. JAIN,JJ.] 
B 
Rajasthan Entertainment and Advertisement Tax Act, 1957 (as 
amended)-s. I 0-Exhibitor of cinematograph films admitting 878 
viewers without valid ticket-Imposition of penalty of Rs. 5001- per c 
viewer and in addition penalty ofRs.5001--Correctness of-Held: Not 
correct-Under pre-amended s. I 0, contravention of admitting persons 
without valid ticket had no nexus with the number of persons-Though 
amended provision permits imposition of penalty per person but it has 
no retrospective effect and is not clarificatory-lmposition of penalty D 
of Rs.4,39,0001- at the rate of Rs.5001- per viewer unreasonable as 
against the total cost of the tickets Rs.30061-. 
Appellant is exhibitor of cinematograph films. Commercial Tax 
Inspectors inspected appellant's cinema hall and found 878 school 
E 
children watching movie without tickets. It issued show cause notice 
to the appellant for commission of offence under section 6(1) and 
(2) of the Rajasthan Entertainment and Advertisement Act, 1957 and 
for imposition of penalty of Rs 500/- in respect of each viewer. 
Appellant denied the imposition of penalty. Assessing Officer 
imposed penalty at the rate of Rs.500/- per viewer and in addition F 
>-
penalty ofRs.500/- under section 10(3)(b) of the Act. Commissioner 
(Appeals) upheld the penalty under section 10(3)(a), however he had 
set aside the penalty under section 10(3)(b )(iii) of the Act. Aggrieved, 
appellant filed appeal. It was contended that the total cost of the 
tickets was Rs.3006/- and penalty of Rs.4,39,000/- at the rate of G 
Rs.500/- per viewer was not justified. Taxation Board held that the 
I' 
penalty was not imposable at the rate of Rs.500/- per viewer and 
..... 
the maximum penalty imposable was Rs.500/-. Respondent filed 
revision petition. High Court upheld the penalty imposed by the 
1075 
H 
1076 
SUPREME COURT REPORTS 
[2007] 11 S.C.R. 
A Assessing Officer. Hence, the present appeal. 
Allowing the appeal, the Court 
HELD: 1.1. Section 10 of the Rajasthan Entertainment and 
Advertisement Tax Act, 1957 has been amended w.e.f. 31st July, 
B 1998. The amended provision permits imposition of penalty per 
person. Section 10(3)(b) contemplates two types of penalties. The 
first relates to cases covered by clause (a) and sub-clauses (i) and 
(ii) of Clause (b ). The second relates to sub-clause (iii) of Clause (b) 
of Sub-Section 3 of Section 10. The case at hand relates to clause 
C (a) of sub-section (3) of Section 10. If the position was clear as 
contended by the State that the penalty is to be at the rate of Rs. 
500/- per person, there was no reason for the amendment which 
specifically provided for imposition of penalty per person. 
[Para 7] [1082-A, B, CJ 
D 
1.2. It is also irrational that as against a tax liability of Rs. 
3006/-, penalty of Rs.4,39,000/- was to be imposed. Though in all 
cases quantum would not be a relevant factor, but on analyzing the 
scheme of the Statute it is clear that the stress is on the 
contravention. The contravention essentially is of admitting persons 
E without valid ticket and at the relevant point of time, had no nexus 
with the number of persons. To make the provision stringent the shift 
has been made to per person. But the amendment has no 
retrospective effect and is not clarificatory in nature. Therefore, the 
view of High Court is not correct. The conclusion of the Taxation 
F Board that the penalty was not imposable at the rate of Rs.500/- per 
viewer and the maximum penalty imposable was Rs.500/-, was the 
correct view. [Paras 9 and 10) [1084-C, D, E] 
Maharana Talkies, Bhilwara v. State of Rajasthan and Ors., 
G (2004) 1 STT 237 (Raj.HC) and State of Rajasthan and Ors. v. RTT 
and Ors., (2003) WLC (Raj), referred to. 
H 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5161 of 
2007. 
From the final Judgment and Order dated 3.3.2006 of the High Court 
t 
' 
1 
M/S.JASWANTTALKIESv. COMMERCIAL TAXES 
1077 
OFFICER,BHIL W ARA [P ASA YAT,J.] 
of Judicature for Rajasthan at Jodhpur in S.B. Civil (Sales Tax) Revision A 
No. 173 of 2000. 
Dr. Manish Singhvi and P.V. Yogeswaran for the Appellant. 
Aruneshwar Gupta, A.AG., Naveen Kumar Singh, Mukul Sood and 
Shashwat Gupta for the Respondent. 
B 
' 
i 
The Judgment of the Court was delivered by 
.. 
DR. ARIJIT P ASA VAT, J. 1. Leave granted. 
2. Challenge in this appeal is to the order p

Excerpt shown. Read the full judgment & AI analysis in Lexace.