LexVENKATESHWARA THEATRE versus STATE OF ANDHRA PRADESH AND ORS.
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A B c D E .F VENKA TESHW ARA THEATRE v. ST A TE OF ANDHRA PRADESH AND ORS. MAY 10, 1993 [l\t.:M. PUNCHHI AND S.C. AGARWAL, JJ.] Constitwion of India, 1950-Sevemh Schedule-List II, Entry 62· Taxes on e111ertainme111s-A11dhra Pradesh Entertainment Tax Act, 1039-Constitwional Validity of-Question as to legislative competence of State ugistawre-Factors to be considered. 1\nd/Jra Pradesh E111ertai11111e111 Tax Act 1939-Sections -I and 5-l're and post ame11dme111 of A. P. Act 2-1of198-1-uvy of tax-Modes of-Alteration in the mode whether has effect of altering the nature of tax-Legislative competency-Scope C!f Constitution of India, 1950-Article N-Equality before iaw'- Construction-Law to operate differently on d(tferent groups- Conditions for classijication-ClassifYing items for tax-Leg isl aw re's discretion-Ambit of-Discrimination-\Vhen becomes. Andhra Pradesh Entertain111e111 Tax Act. 1939-Sections .+and 5-Whetl!er 11/tra vi res of Article l.f, Constillltion of India. Andhra Pradesh Emertainment Tax Act, 1939-Section 5(6)-0ptionfor payment o.f weekly consolidated amo11111-uga/iry. Prior to .Januar~· 1, 1984, the Andina Pradesh Entertainment Tax Act, 1989, in Section 4, provided for levy of entertainment tax at a rate fixed on the basis of percentage of payment made b~· a person for admission to any entertainment. In section 4-C, in respect of entertainments held within the jurisdiction of any local authority where population did not exceed ~5, 000, tax was levied at a certain percentage of the gross collection capacity per show G and the percentage for such levy were fixed according to the population of the local authority within the jurisdiction of which the entertainment held. H The Amending Act 24 of1984, replaced the earlier mode of levy of tax prescribed in Section 4 and introduced a mode oflev~· ot'tax on the basis ofa prescribed percentage of the gross collection capacity per show. The 1·ates - VENKATESHWARA THEATER v. STATEOFANDHRAPRADESH 617 were fixed on the basis of a percentage of th~ gross collection capacity per A show varying with the category of the local area in which the theatre was situated as well as on the nature of the theatre, viz. air conditioned air cooled or (other than air conditioned and ~ir'-cooled)or permanent, semi-permanent including touring and temporary theatres. The proprietor was ~iveri an option to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the said amount was fixed on the ha~ of the B prescribed number of shows per week. The number of shows varied with the nature of the theatre as well as the category of the local area in which it was situate. A fixed amount was also leviable by way of show tax on each show. Before the High Court, a number of writ petitions were fded challenging C the validity of sections 4,4-A and 5 of the Anclhra Pradesh Entertainments Tax Act, 1939, as amended by Act24 ofl984, on the grounds that(i) the levy of entertainment tax on the basis of gross collection capacity without refer- ence to the actual amount collected or the actual number of tickets sold or the number of persons admitted was ultra vires the legislative power conferred ori the State Legislature under Entry 62 of List II of the Seventh Schedule of the D Constitution; (ii) section 4 was hit by Article 14 ofthe Constitution, as it gave rise to discrimnnation amongst different theatres situa.te within the same local area; and that (iii) the levy of entertainment tax under section 4 being exproprietory amounted to an unreasonable restriction on the right guaran- teed to the petitioners by Article 19(1) (g) of the Constitution and was not saved under Article 19(6). E Relying upori the decisions in Western india Theatres v. Cantonment Board. U 959] Supp. 2 SCR 63; Y. V. Srinivasamurthy v. State of Mysore, AIR 1959 SC 894 and State of Bombay v.R.M.D. Chamarbaugwala, AIR 1957 S.C. 699 the High Court dismissing the writ petitions held that the State Legisla- ture was compl\!tent to ~-<!VY the tax under Entry 62 of List II of the Seventh Schedule; that :as the tax le,·ied retained the character of entertainment tax, F the Legislature was competent to adopt such basis or such measure, or ~ch method of le,·y; that wide discretion was allowed to the Le~islature in the matter of classification and in the matter of selection of persons to he taxed and that the two-fold classification mad
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