STATE OF UTTAR PRADESH AND ORS. versus VINAY KUMAR JAIN

Citation: [1996] SUPP. 8 S.C.R. 777 · Decided: 19-11-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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STATE OF UTTAR PRADESH AND ORS. 
A 
v. 
VINA Y KUMAR JAIN 
NOVEMBER 19, 1996 
[B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.] 
8 
Entertainment Tax-Uttar Pradesh Entertainments and Betting Tax 
Act, 1979 : U.P. Entertainments and Betting Tax Rules, 1981-R 24(A): 
U.P. Cinematograph Rules, 1951-Rule 14-Compounded paymelll of 
Tax-Held, No Composite agreement can be entered into by the proprietor 
indicating lesser seats than mentioned in the license-Any proprietor seeking C 
to reduce the seating capacity-Has to approach the licencing authority 
under Rule 14 of the U.P. Cinematograph Rule, 1951 to have his licence 
amended accordingly and produce the amended licence-Then only the 
amended seating capacity be taken into consideration for the purpose of 
Rule 24-A-District Magistrate has no power to take into consideration 
any other seating capacity than what is mentioned in the licence. 
D 
The respondent, owner of a cinema theatre, filed applications 
before the District Magistrate, requesting for permission to reduce 
the seating capacity and also opting for composite system of payment 
of tax for the financial year-1995-96. Both the applications were E 
rejected. The respondent filed a writ petition in the High Court 
challe'lging the rejection. The High Court allowed the writ petition 
and held that there was nothing in the Act and the Rules empowering 
the District Magistrate to ignore or change the seating capacity 
indicated in the option application. The State filed this appeal against 
the order of the High Court. Allowing the appeal, this court 
F 
HELD: I. It is not open to the proprietor to seek to enter into a 
composite agreement indicating a lesser number of seating capacity 
than the maximum mentioned in the licence. Nor is it open to the 
District Magistrate to take any other figure of seating capacity than G 
the maximum seating capacity mentioned in such licence. The remedy 
of any proprietor who wants to have the seating capacity of his cinema 
theatre reduced, is to approach the licencing Authority under Rule 
14 of the U.P. Cinematgraph Rules, 1951, and have his licence amended 
accordingly. Only thrn can that amended capacity be taken into 
consideration for the purposes of Rule 24-A of the U.P. Entertainments H 
777 
1is 
SUPREME COURT REPORTS [1996) SUPP. 8 S.C.R. 
i 
A and Betting Tax Rules 1981. [785-H, 786-A-B) 
B 
2.1. A proprietor seeking to opt for the compounded payment 
of entertainment tax shall have to submit an application to the District 
Magistrate in Form R with all particulars mentioned therein, fully 
and truly. [785-H] 
2.2. On receipt of the application, the District Magistrate has to 
verify the correctness of the particulars in Form R. The District 
Magistrate is not bound by the particulars as stated in Form R. So 
far as the maximum number of seats are concerned, the only document 
he has to see is the licence issued under U.P. Cinematograph Rules, 
C 1951. The District Magistrate can not take any other figure of seating 
capacity than the maximum seating capacity mentioned in such 
licence. Only if he is satisfied with the correctness of the particulars 
in application form 'R', then be comes under an obligation to issue 
the order in Form 'S' mentioning therein the GCC of the Cinema 
D theatre and the weekly tax payable by it. [785-F-G, 785-F] 
2.3. The option once exercised shall be valid for the relevant 
financial year to which it pertains. [785-G-H] 
3. For the purpose of this case, it is not necessary to deal with or 
E interpret sub Rule (4) of Rule 24-A which deals with post composite 
agreement period. It would be in the fitness of things that the 
Government of U.P. recasts the sub-rule at its earliest to make its 
meaning clear as such a course would obviate avoidable litigation in 
the State. [785-C-D) 
F 
G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14604 Of 
1996. 
From the Judgment and Order dated 25.3.96 of the Allahabad High 
Court in W.P. No. 1773 (MB) of 1995. 
Mr. Rakesh Dwivedi, Ashish Kumar and A.K. Goel for the Appellants. 
Ashok Kr. Srivastava for the Respondents. 
H 
The Judgment of the Court was delivered by : 
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STATEOFU.P. v. V.K.JAIN[B.P.JEEVANREDDY,J.] 
779 
B.P. JEEVAN REDDY, J. The Uttar Pradesh Entertainments and A 
Betting Tax Act, 1979 provides for two modes of levy of entertainment 
tax on cinemas. Sub-section (I) of Section 3 says that 'subject to the 
provisions of this Act, there shall be levied and paid on all payments for
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