Kerala Film Exhibitors Federation Vs State of Kerala (Kerala High Court)
Kerala High Court held that levy of cess on the cinema tickets under section 3C of the Kerala Local Authorities Entertainment Tax Act is constitutionally valid. Accordingly, the appeal is dismissed.
Facts- Petitioners questioned the constitutional validity of Section 3C of the Kerala Local Authorities Entertainments Tax Act. The learned Single Judge dismissed the writ petition. Challenging the judgment, the Appellants have filed this appeal u/s. 5 of the Kerala High Court Act, 1958. Appellant No. 1 is the President of the Kerala Film Exhibitors Federation. Appellant No. 2 is a theatre owner. Respondents are the State of Kerala, Ministry of Culture, Department of Cultural Affairs, Kerala Cultural Activists’ Welfare Fund Board, the local authorities, Kerala Poorakkali Kala Academy, Kerala Drama Workers’ Welfare Association, Pallassana Social Development Society, National Association of Malayalam Artists; and Kerala Cine Exhibitors Association.
Conclusion- It is clear that the impugned levy is on entertainment. The Cess levied under Section 3C of the Act of 1961 and collected is for the Kerala Cultural Activists’ Welfare Fund, established under the Act of 2010. This Cess shall not exceed ₹ 3/- per cinema admission where the ticket price is more than ₹ 25/-. The local authority has to collect the Cess along with the tax on cinema admission and, after deducting the collection charges at a rate specified by the Government, has to transfer the proceeds to the Kerala Cultural Activists’ Welfare Fund Board. The Cess is levied on the cinema viewers and not on the theatre owners. The impugned provision seeks to levy a cess on the ticket purchased by cinema viewers for the purpose of entertainment, and, therefore, it is clearly relatable to entertainment under Entry 62 of List II, VII Schedule to the Constitution of India.
