SRINIVASA THEATRE AND ORS. ETC. ETC. versus GOVERNMENT OF TAMIL NADU AND ORS. ETC. ETC.

Citation: [1992] 2 S.C.R. 164 · Decided: 12-03-1992 · Supreme Court of India · Bench: M.N. VENKATACHALIAH · Disposal: Dismissed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
SRINIVASA THEATRE AND ORS. ETC. ETC. 
v. 
GOVERNMENT OF TAMIL NADU AND ORS. ETC. ETC. 
MARCH 12, 1992 
[M. N. VENKATACHALIAH AND B. P. JEEVAN REDDY, JJ.) 
Tamil Nadu Entertainment Tax Ac~ 1939: Section SA(l) (As amended 
by Act 40 of 1989)--Constitutional validity of. 
C 
Cinema Theatres-Entertainment Tax-Levy on the basis of 'admission 
system' and 'composition system'-Classification of theatres for the purpose 
of leVJTheatres situated within the Municipal Corporations and Special 
Grade Municipalities governed by 'admission system'-Theatres situated in 
other local areas of State governed by 'composition system'-Theatres situated 
D within the radius of the five kilometers of Municipal Corporations and Special 
Grade Municipalities brought over from 'composition system' to 'admission 
system '---But temporary and open theatres exempted from 'admission 
system'-Held classification of theatres was reasonable and has nexus with 
the object of enactment-Held change-over to 'admission system' from 'com-. 
position system' is not an unreasonable restriction-Exemption to open and 
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temporary theatres held not discriminatory-Section SA(l) held not violative 
of Articles 14 and 19(1)(g). 
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G 
Constitution of India, 1950: Articles 14 and 38. 
Expression 'Equality before law' and 'equal protection of laws'-Mear.-
ing of-Relevance of State's obligation to bring equality as contemplated by 
Article 38-Discussed. 
Doctrine of legitimate expectatiott-Legitimate expectation based on 
legislative practice cannot be invoked for invalidating a legislation. 
The Tamil Nadu Entertainment Tax Act, 1939 provides for levy of 
entertainment tax on admission to cinema theatres in the State of Tamil 
Nadu. Until 1978 the entertainment tax was levied on the basis of 'admis· 
sion system' i.e. on the actual number of tickets sold. In 1978 the Act was 
·amended and sections S(A) and 5(8) were introduced. These sections 
H introduced the 'composition system' of collection of entertainment tax 
164 
SRINNASA lHEATRE v. G .. ,TJ~RNMENT 
165 
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under which tax was levied based upon the: gross collection capacity of A 
cinema theatres irrespective of the actual number oftickets sold. However, 
the newly introduced 'composition system' was not made applicable to the 
entire State. While the theatres situated within the Municipal Corpora-
tions of Madras, Madurai, Coimbatore and the Special grade 
municipalities continued to be governed by the original system of taxation B 
i.e. 'admission system' the theatres situated in all other local areas of the 
y 
State were governed by the composition system. 
In 1989 the Act was further amended and Sub-section (1) of Section 
S(A) of the Act was substituted. By this amendment, the percentage of 
,...-- ......,, 
entertainment tax vis-a-vis the rates of admission in force in corporation c 
and special grade municipality areas was reduced from 53% to 40%. At the 
same time all the theatres situated within the radius of five kilometers 
,..._ 
from the peripheral limits of such areas (belt) which were hitherto 
governed by the composition system were brought over to the admission 
system. However, the temporary and open air theatres even though located D 
in the belt of five kilometers were excluded from this switch-over. 
The appellants challenged the validity of section S(A)(l) by filing 
various writ petitions which were dismissed by a Division Bench of the 
Madras High Court. 
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. --< 
In appeals to this Court, it was contended on behalf of the appellant1' 
(1) that the Amendment Act is arbitrary and violative of Article 14 inas-
much as (a) it classifies theatres situated in a local area into two categories 
subjecting one such category to a hostile treatment; (b) it equates the 
theatres situated in village panchayats and village townships and other F 
lesser grade municipalities with the theatres in corporation areas and 
~ 
special grade municipalities area and that such a classification has no 
relation to the object of the enactment; (2) exemption of temporary and 
_;. 
open theatres from the 'admission system' of taxation is discriminatory; 
(3) the impugned provisions are confiscatory in nature and they constitute 
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an unreasonable restriction upon the petitioners' fundamental right to 
trade guaranteed by Article 19(1)(g); (4) The petitioners had come to 
entertain a legitimate expectation, based on legislative practice, that they 
would not be brought over to 'admission system' of t

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