The Western India Theatres Ltd. Vs.
The Cantonment Board, Poona, Cantonment  INSC 4 (16 January 1959)
DAS, SUDHI RANJAN (CJ) DAS, S.K.
CITATION: 1959 AIR 582 1959 SCR Supl. (2) 63
CITATOR INFO :
R 1959 SC 586 (4) F 1959 SC 894 (2) R 1962
SC1006 (74) E 1989 SC1949 (7) R 1990 SC 85 (23) R 1992 SC1848 (7)
Entertainment Tax-Imposition on cinema
show-ValidityCantonments Act, 1924 (Act 11 of 1924), s. 60-Bombay Municipal
Boroughs Act, 1925 (Bom. XVIII of 1925), s. 73Government of India Act, 1935, s. 100, Sch. VII, Entry 50.
The appellant, a public limited company, was
the lessee of woo cinema houses, " West, End " and " Capitol
" situated within the Poona cantonment area. , By a notification dated
June 17, 1948, the Bombay Government with the sanction of the
Governor-General-in-Council imposed certain taxes in the cantonment of Poona
including an entertainment tax of Rs. 10 per show on the appellant's cinema
houses and Rs. 5 per show on others. The appellant, who paid the tax under
protest, brought the suit, out of which the present appeal arose, for a
declaration that the 64 imposition of the said tax by the respondent was
illegal, for a permanent injunction restraining it from levying the tax and for
the refund of Rs. 45,802, paid as tax by the appellant. The trial Court decreed
the suit but the High Court, on appeal by the respondent, reversed the decision
of the trial Court and dismissed the suit.' Under s. 60(1) of the Cantonments
Act, 1924 (11 Of 1924), read with S. 73 (xiv) Of the Bombay Municipal Boroughs
Act, 1925 (Bom. XVIII of 1925), the respondent had the power to impose any
other tax which the Bombay Provincial Legislature could impose on the province.
The question, therefore, was whether the Bombay Legislature had the power to
impose the tax in question. It was contended on behalf of the appellant that
although the Provincial Legislature had undoubtedly the power under s. 100 of
the Government of India Act, 1935, read with Entry 50 in Sch. VII thereto, to
make law with respect to " taxes on luxuries, including taxes on
entertainments, amusements, betting and gambling ", the said entry
contemplated a law imposing taxes on persons who enjoyed the luxuries,
entertainments or amusements and not on persons who provided them. Such a tax,
if levied on the latter would be one on profession, trade or calling as
contemplated by Entry 46 of the said Schedule and could not exceed Rs. 100 per
annum under s. 142A of the Government of India Act, 1935, and Rs. 250 per annum
under Art. 276(2) of the Constitution.
Held, that the contention must be negatived.
It is well-settled that in construing an
entry conferring legislative powers, the widest possible construction according
to their ordinary meaning must be given to the words used. There could be no
reason, therefore, in construing Entry 50, to differentiate between the giver
and the receiver of the luxuries, entertainments or amusements and both must be
held to be amenable to the tax.
Navinchandra Mafatlal v. The Commissioner of
Income-tax, Bombay City,  11 S.C.R. 829, referred to.
Although an entertainment tax was regarded as
a tax on expenditure, there was no warrant for holding that Entry 50 contemplated
only a tax on moneys spent on luxuries, entertainments or amusements. What it
had in view were these matters, and not either the giver or the receiver of
them, as the real objects of legislation.
The impugned tax was distinguishable from a
tax on a profession or calling. It was a tax imposed on an actual show, and not
on a profession or calling whether there was an exercise of it or not.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 145 of 1955.
Appeal from the judgment and decree dated the
February 10, 1953, of the Bombay High Court in 65 Appeal No. 742 of 1951 from
Original Decree, arising out of the judgment and decree dated July 31, 1951,,
of the Court of the Senior Civil Judge, Poona, in Special' Suit No. 89 of 1950.
H. D. Banaji, R. A. Gagrat and G.
Gopalakrishnan, for the appellant.
H. N. Sanyal, Additional Solicitor-General of
India, H. J. Umrigar and R. H. Dhebar, for the respondent. 1959.
January 16. The Judgment of the Court was
delivered by DAS, C. J.-This is an appeal from the judgment and decree of the
High Court of Bombay dated February 10, 1953, setting aside the judgment and
decree of the Court of Civil Judge, Senior Division, Poona dated July 31, 1951,
in Special Suit No. 89 of 1950 and dismissing the appellant's suit against the
respondent with costs throughout. This appeal has been filed under a
certificate of fitness granted by the High Court of Bombay.
The facts leading up to this appeal may
shortly be stated.
The appellant is a public limited company
registered under the Indian Companies Act, 1913. It is a lessee of two cinema
Houses known respectively as " West End " and " Capitol "
situated within the limits of Poona cantonment area. It exhibits in the said
two Houses cinematograph films, both foreign and Indian.
On March 20, 1947, a notice was issued by the
respondent whereby, in exercise of the powers conferred on it by s. 60 of the
Cantonments Act, 1924 (11 of 1924), the respondent proposed to make, with the
previous sanction of the Central Government, certain amendments in the
notification of the Government of Bombay in the General Department No. 4160
dated June 17, 1918, and intimated that the draft amendments would be
considered by the respondent on or after April 21, 1947, and invited objection
in writing within 30 days from the publication of that notice. One of the items
of amendments was as follows:"(ii) 'V-Tax on Entertainments' 9 66
1. Cinemas, Talkies or Rs. 5-0-0 per dramas
Rs. 10-0-0 show
2. Circus Rs. 20-0-0 per show
3. Horse Races Rs. 100-0-0 per day of race
4. Amusement park Rs. 20-0-0 per day provided
1. The said tax shall be levied at the rate
of Rs. 10-0-0 per show in the case of the West End and Capitol Talkies and at
the rate of Rs. 5-0-0 per show in other cases ".
It appears that the Cinematograph Exhibitors
Association of India submitted certain objections to the proposals. The
Cantonment Executive Officer, Poona, by his letter dated July 8, 1947, informed
the Secretary of the Cinematograph Exhibitors Association of India that the
latter's letter had been submitted to the Government of India in original along
with the respondent's proposals and that the imposition of the entertainments
tax on cinemas had been approved by the Government of India, Defence Department
notification No. 1463 dated May 7, 1947. On June 17,1948, a notification was
issued by the Government of Bombay to the effect that in supersession of the
notifications of Government noted on the margin and of all other notifications
on the same subject, the Governor in Council, with the previous sanction of the
Governor General-in-Council was pleased to impose certain taxes in the
Cantonment of Poona with effect from July 15, 1948. One of the taxes thus
imposed was as follows:" V Tax on entertainments.
1. Cinemas, Talkies or dramas Rs. 10.0-0 :in
the case of the West End per show and Capitol In other cases Rs. 5-0-0 per show
2. Circus Rs. 2-0-0 per show
3. Horse Races Rs. 100-0-0 per day of race
4. Amusement park Rs. 20-0-0 per day."
67 The appellant paid the tax under protest and on or about April 19, 1950,
filed a suit (being suit No. 89 of 1950) against the respondent in the Court of
the Civil Judge, Senior Division, Poona for a declaration that the levy,
collection or recovery of the said tax by the respondent was illegal and
invalid, for a permanent injunction restraining the respondent from levying,
collecting or recovering the said tax, for refund of the sum of Rs. 45,802-0-0
being the total amount of tax collected from the appellant, for costs and
interest on judgment. By its judgment dated July 31, 1951, the trial court
decreed the suit in full. The respondent preferred an appeal before the High
Court against the said judgment and decree of the trial court and the High
Court by its judgment and decree dated February 10, 1953, allowed the appeal
and dismissed the appellant's suit with costs throughout. The High Court,
however, granted to the appellant a certificate of fitness for appeal to this
Court and hence this final appeal questioning the validity of the said tax.
At all times material to this appeal the
respondent was governed by the Cantonments Act, 1924 (Act 11 of 1924).
Section 60 of that Act runs as follows:"
60(1) The Board may, with the previous sanction of the local Government, impose
in any Cantonment any tax which, under any enactment for the time being in
force, may be imposed in any municipality in the province wherein the
Cantonment is situated.
(2) Any tax imposed under this section shall
take effect from the date of its notification in the official gazette ".
The enactment under which shortly after the
date of passing of the Cantonments Act, 1924, tax could be imposed by the
municipal boroughs in the province of Bombay was the Bombay Municipal Boroughs
Act, 1925 (Bom. XVIII of 1925).
Therefore the powers of the respondent to.
levy and collect taxes under the provisions of the Cantonments Act were coextensive
with the powers of the Borough Municipalities under the Bombay Municipal
Boroughs Act, 1925. Section 73 of the last mentioned Act specified the taxes
which 68 might be imposed by a municipality. The relevant portions thereof,
prior to its present adaptation, were as follows:" Subject to any general
or special orders which the Provincial Government may make in this behalf and
to the provisions of sections 75 and 76, a municipality may impose for the
purposes of this Act any of the following taxes, namely:(xiv) any other tax
(not being a toll on motor vehicles and trailers., save as provided by section
14 of the Bombay Motor Vehicles Tax Act, 1935) which under the Government of
India Act, 1935, the provincial Legislature has power to impose in the
province." The question is whether the provincial legislature of Bombay
had power to impose the tax which is under consideration in this appeal.
Under s. 100 of the Government of India Act,
1935 read with entry 50 in Sch. VII thereto the provincial legislature had
power to make law with respect to " taxes on luxuries, including taxes on
entertainments, amusements, betting and gambling ". Learned counsel for
the appellant contends that the impugned tax is not covered by this entry at
all. This entry, according to him, contemplates a law imposing taxes on persons
who receive or enjoy the luxuries or the entertainments or the amusements and,
therefore, no law made with respect to matters covered by this entry can impose
a tax on persons who provide the luxuries, entertainments or amusements, for
the last mentioned persons themselves receive or enjoy no luxury or
entertainment or amusement, but simply carry on their profession, trade or
Learned counsel urges that the impugned law
is really one with respect to matters specified in entry 46, namely, taxes on
professions, trades, callings and employments and, therefore, cannot exceed Rs.
100 per annum under s. 142A of the Government of India Act, 1935 and Rs. 250
per annum under Art. 276(2) of the Constitution. We are unable to accept this
argument as sound.
69 As pointed out by this' Court in
Navinchandra Mafatlal v. The Commissioner of Income Tax, Bombay City (1),
following certain earlier decisions referred to therein, the entries in the
legislative list should not be read in a narrow or restricted sense and that
each general word should be held to extend to all ancillary or subsidiary
matters which can fairly and reasonably be said to be comprehended in it. It
has been accepted as well settled that in construing such an entry conferring
legislative powers the widest possible construction according to their ordinary
meaning must be put upon the words used therein. In view of this well
established rule of interpretation, there can be no reason to construe the
words " taxes on luxuries or entertainments or amusements " in entry
50 as having a restricted meaning so -as to confine the operation of the law to
be made there under only to taxes on persons receiving the luxuries, entertainments,
or amusements. The entry contemplates luxuries, entertainments, and amusements
as objects on which the tax is to be imposed. If the words are to be so regarded,
as we think they must, there can be no reason to differentiate between the
giver and the receiver of the luxuries, entertainments, or amusements and both
may, with equal propriety, be made amenable to the tax. It is true that
economists regard an entertainment tax as a tax on expenditure and, indeed,
when the tax is imposed on the receiver of the entertainment, it does become a
tax on expenditure, but there is no warrant for holding that entry 50
contemplates only a tax on moneys spent on luxuries, entertainments or
amusements. The entry, as we have said, contemplates a law with respect to
these matters regarded as objects and a law which imposes tax on the act of
entertaining is within the entry whether it falls on the giver or the receiver
of that entertainment. Nor is the impugned tax a tax imposed for the privilege
of carrying on any trade or calling. It is a tax imposed on every show, that is
to say, on every instance of the exercise of the particular trade, calling or
employment. If there is no show, there is no tax. A (1)  1 S.C.R. 829. lawyer
has to pay a tax or fee to take out a license irrespective of whether or not he
actually practises. That tax is a tax for the privilege of having the right to
exercise the profession if and when the person taking out the license chooses
to do so. The impugned tax is a tax on the act of entertainment resulting in a
show. In our opinion, therefore, s. 73 is a law with respect to matters
enumerated in entry 50 and not entry 46 and the Bombay legislature had ample
power to enact this law.
The only other point urged before us is that
the notification is violative of the equal protection clause of our
Constitution in that it has picked out the appellant's cinema houses for
discriminatory treatment by imposing on it a tax at the rate of Rs. 10 per
show, while a tax of only Rs. 5 per show is imposed on other cinema houses. The
meaning, scope, and effect of the provisions of Art. 14 of our Constitution
have been fully dealt with, analysed and laid down by this Court in Budhan
Choudhury v. The State of Bihar (1) and Shri Rama Krishna Dalmia v. Shri
Justice S. R. Tendolkar (2). It appears, however, from the record that no issue
was raised and no evidence was adduced by the appellant before the trial court
showing that there were other cinema Houses similarly situate as that of the
appellant's cinema Houses. It may not be unreasonable or improper if a higher
tax is imposed on the shows given by a cinema house which contains large
seating accommodation and is situate in fashionable or busy localities where
the number of visitors is more numerous and in more affluent circumstances than
the tax that may be im. posed on shows given in a smaller cinema house
containing less accommodation and situate in some localities where the visitors
are less numerous or financially in less affluent circumstances, for the two
cannot, in those circumstances, be said to be similarly situate. There was,
however, no material on which the trial court could or we may now come to a
decision as to whether there had been any real discrimination in the facts and
circumstances of this case.
It (1)  S.C.R. 1045.
(2)  S.C.R. 279.
71 may be that the appellant may in some
future proceeding adduce evidence to establish that there are other cinema
houses similarly situate and that the imposition of a higher tax on the appellant
is discriminatory as to which we say nothing; but all we need say is that in
this suit the appellant has not discharged the onus that was on him and, on the
material on record, it is impossible for us to hold in this case that there has
been any discrimination in fact.
For reasons stated above this appeal must be
dismissed with costs.