THE ASSISTANT COMMERCIAL TAX OFFICER-CUM-ENTERTAINMENT TAX OFFICER versus SHRI NARASIMHAIAH AND ORS.

Citation: [1997] 3 S.C.R. 513 · Decided: 02-04-1997 · Supreme Court of India · Bench: K. RAMASWAMY, D.P. WADHWA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

\ 
THE ASSISTANT COMMERCIAL TAX 
OFFICER-CUM-ENTERTAINMENT TAX OFFICEP 
v. 
SHRI NARASIMHAIAH AND ORS. 
APRIL 2, 1997 
[K. RAMASWAMY AND D.P. WADHWA, JJ.] 
Kamataka Entertainments Tax Act, 1958: Section 6-B (As inse1ted by 
Kamataka Act 14 of 1996). 
Kamataka Entertainment Tax Rules, 1959: Rule 29-F. 
Ente1tainment Ta:t~Escaped tumover---Power to reopen assessment 
and reassess the escaped tum over-Limitation pe1iod f 01~Notification No. 
A 
B 
c 
FD, 194 CEX-76 dated 30th November, 1976-PrcsClibing period of five 
years from the close of the period to which the assessment in question D 
relates-He'd power relates backward to five years from the date the Rule 
came into 1orce from November 30, 1976-171e authorities are empowered to 
reassess the escaped twnover for the pe1iod, five years preceding November 
30, 1976 as relating to the assessment in question. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1780-86 E 
of 1986 
From the Judgment and Order dated 13.9.85 of the Karnataka High 
Court in W.A. Nos. 1640-1646 of 1985. 
M. Veerappa for the Appellant. 
The following Order of the Court was delivered : 
These appeals by special leave arise from the common judgment of 
F 
the Division Bench of the Karnataka High Court, made on September 13, G 
1985 in Writ Appeal Nos. 1640-46/85. 
The admitted position is that the Legislature of Karnataka intro-
duced Section 6-B in the Karnataka Entertainment TaX Act, 1958 by 
Amendment Act, 1966 (Karnataka Act 14 of 1966) with effect from May 
16, 1966 which reads as under : 
H 
513 
A 
B 
c 
D 
E 
514 
SUPREME COURT REPORTS 
[1997] 3 S.C.R. 
"6-B Payment for admission, etc., escaping assessment - (1) where, 
for any reasons, (1) any complimentary ticket or any payment for 
admission to any entertainment has escaped assessment to tax 
under Section 3 or Section 3-A or 
(ii) any cinematograph show has escaped assessment to tax under 
Section 4 or 4-A or 
(iii) such ticket, payment or show has been assessed at a rate lower 
than the rate al which it is assessable under Section 3 or Section 
3-A or Section 4 or Section 4-A. 
The authority prescribed under sub-section (1) or Sec:tion 6-A may, 
subject tn the provisions of sub-section (2) and at any time within 
such period as may be prescribed, assess or re-assess, to the best 
of its judgment, the rate due on such ticket, payment or show under 
Section 3 or Section 3-A or Section 4 or Section 4-A as the case 
may be, after service of notice on the proprietor and after making 
such enquiry, as it may consider necessary." 
Reassessment of escaped turn-over Wi!S sought to be made by opera-
tion of Notification No. FD. 194 CEX-76 dated 30.11.1976 amending and 
framing Rule 29-F of the Rules made under the Act prescribing the period 
of limitation of five years. It reads as under: 
"29-F. The time within which the power under Section 6B is 
exercisable shall be five years from the close of the period to which 
the assessment in question relates.'' 
f 
The respondents contend that the appdlants have no power to re-
G 
open the assessment and reassess the escaped turnover beyond November 
30, 1976. The said contention found favour with the karned single Judge,' 
which was aflirme;;d by the Division Bench dismissing the appeal summarily. 
Thus, these appeals hy special leave. 
A reading of Section· ti-ti of the Act clearly indicates that where for 
any reasons, any complimentary ticket or any payment for admission to any 
entertainment has escaped assessment to tax under Section 3 or Section 
3-A, or any cinematography show has escaped assessment to tax under 
Section 4 or 4-A, or such ticket, payment or show has been assessed at a 
H rate lower than the rate at which it is assessable under Section 3 or 3-A or 
-
ASSIT. COMMERCIAL TAXOFFICER-CUM-ENTERTAINMENTTAX OFFICER,. NARASJMHAIAH 515 
Section 4 or 4-A, as the case may be, the authority has been given power A 
under sub-section (1) of Section 6A, subject to the provisions of sub-
section (2) of Section 6-A, to reassess to the best of its judgment, the rate 
due on such ticket, payment or show under Section 3 or 3-A or Section 4 
or 4-A, as the case may be. But it should be done only after service of 
notice on the proprietor and after making such enquiry as it may consider B 
necessary. Since limitation for the period during which the escaped turn-
over can be reassessed, had not been earlier prescribed, Ruic 29-F was 
made and had come into effect from November 30, 1976. As seen unde
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