Case Law Details
Balaji Theatre Vs Chief Secretary (Madras High Court)
It is not in dispute that the Puducherry Municipalities Act, 1973, is an enactment, which is still in force and thus, the authorities competent under the above enactment are bound and entitled to act in accordance with the relevant provisions made thereunder. Section 118(1)(b)(ii) of the Puducherry Municipalities Act, 1973, empowers the Municipal Council to impose a tax on entertainment. It is to be noted at this juncture, that this power conferred on the Municipal Council under Section 118 to collect various taxes has not been totally taken away or subsumed under the PGST Act and on the other hand, it is apparent that only the power to collect tax on a particular subject viz., advertisements other than advertisements published in the newspapers alone has been taken away or omitted by way of imposition made under Section 173(1)(a) of the PGST Act. A careful perusal of Section 173, Sub-Clause 1 of the PGST Act, would undoubtedly, indicate that the Legislature have consciously retained the power of the Municipal Council to collect tax on all other subjects except the collection of tax on advertisements other than advertisements published in the newspapers. In other words, even after introduction of the PGST Act, in view of the specific provision made under Section 173(1) therein, what was omitted from the purview of the Municipal Council is only a tax on advertisements other than advertisements published in the newspapers and not in respect of other taxes such as property tax, professional tax, duty on certain transfer of immovable property in the form of additional stamp duty and the “Tax on Entertainment”. Therefore, it is very clear that the powers of the Municipal Council to collect the tax on entertainment, is retained, even after introduction of the PGST Act.
No doubt, only point, vehemently, urged on behalf of the petitioner is by harping upon and taking shelter under Sub-Clause 2 of Section 173 of the PGST Act. According to the petitioner, in view of Section 173(2) of the PGST Act, power to collect entertainment tax by the Municipality stands annulled. I have given my careful consideration to the above said submission made by the learned Senior Counsel for the petitioner. I am unable to appreciate the above contention, since the same was made without appreciating the scope and ambit of Section 173 of the PGST Act in toto. I have already pointed out that Section 173(1) of the PGST Act, specifically deals with Section 118 of the Puducherry Municipalities Act, 1973, under which, only Sub-Clause (iii) of Clause (a) of Sub-Section 1 of Section 118 alone was omitted. In other words, the powers conferred on the Municipal Council to impose tax on entertainment under Section 118 has not been omitted by virtue of Section 173(1)(a) of the PGST Act. Therefore, it is to be noted that Section 173(1)(a) is a specific provision dealing with in respect of powers of Municipal council to impose tax on different heads, out of which, the only one tax viz., tax on advertisements other than advertisements published in the newspapers was omitted. Therefore, this Court is of the considered view that the general provision made under Section 173(2) of the PGST Act cannot override or include a specific provision made under Section 173(1) of the PGST Act. In other words, it is to be noted that Section 173(1) of the PGST Act is a stand alone provision unaffected by Sub-Section 2 of Section 173 of PGST Act.
Even otherwise, a careful perusal of Sub-Section 2 of Section 173 of the PGST Act, would disclose that it does not, in effect, support the case of the petitioner in any manner. First of all, it is to be noted that Sub-Section 2 begins with a Saving clause viz., “Save as otherwise provided this Act”. Therefore, what is provided under Section 173(1) is saved and not affected by virtue of Sub-Clause 2 of Section 173. Further, it is to be noted that Sub-Clause 2 of Section 173 does not say that the collection of taxes or cess or surcharges by the Government or a Municipality or a Commune Panchayat or any other authority shall stand annulled in toto. On the other hand, it orders that such collection of tax by such authorities “shall stand annulled or rescinded or modified” inasmuch as and to the extent of such taxes are the subject matter of Entry 52, Entry 54, Entry 55 and Entry 62 of the State List of the Seventh Schedule of the Constitution of India. Thus, it is evident that insofar as the taxes being collected by the Municipality are concerned, referable to Section 118 of the Puducherry Municipalities Act, 1973, the power conferred on the Municipal Council under Section 118, is not totally annulled or rescinded and on the other hand, it is only modified as indicated under Section 173(1) of the PGST Act. The petitioner seeks to take shelter under Section 173(2) of the PGST Act, that too, on misinterpretation of the same, without properly making a conjoined reading of both sub-sections of Section 173 of the PGST Act. Therefore, the petitioner is not justified to contend that collection of entertainment tax, in this case, is without authority of law. It is to be noted at this juncture, that Entry 62 of the State List of the Seventh Schedule of the Constitution of India, as amended by the Constitution (One Hundredth and First Amendment) Act, 2016, would show that the taxes on luxuries including the taxes on entertainment, amusements, betting and gambling are taxes authorized by law and the authorities empowered under the relevant provisions of law to collect the said taxes are justified in doing so. Therefore, going by the above constitutional and statutory position, this Court is of the considered view that the collection of the entertainment tax by the 5th respondent Municipality is within their power, competence and with authority of law. This Court is also of the view that introduction of the PGST Act has not taken away the power of the Municipality to collect the entertainment tax. To put it specifically, Section 173(2) of the PGST Act, does not debar the Municipality, in any manner, from collecting the entertainment tax from the petitioner.
At this juncture, it is relevant to note that collection of service tax and entertainment tax is under different enactment by different authorities. In this case, providing admission into the Cinema theater is treated as service and thus, tax on such service is collected under the GST Act. On such admission, the viewer gets the entertainment viz., Movie and thus, such entertainment being a different content, tax is levied on the same by the local authorities as “Entertainment Tax”. Thus, the entertainment itself being a different content, will not fit into the act of service provided by the theater owner viz., admission of the viewer into the cinema hall. Therefore, the question of subsuming the entertainment tax under the PGST Act, or the event of double taxation as contended by the petitioner, does not arise in this case so long as the Puducherry Municipalities Act, 1973, is in force and not repealed by the introduction of the PGST Act.
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Newspaper and govt announce in pondicherry when will be transfered power from municipal council to ministrate public should know.