STATE OF MAHARASHTRA & Ors. v. SWANSTONE MULTIPLEX CINEMA (P) LTD

Judgment

A B c D E [2009] 11 S.C.R. 378 STATE OF MAHARASHTRA & ORS. V. SWANSTONE MULTIPLEX CINEMA (P) LTD. (Civil Appeal No. 4718 of 2009) JULY 27, 2009 [S.B. SINHA AND DEEPAK VERMA, JJ.] BOMBAY ENTERTAINMENT DUTY ACT, 1923: SS.2(d), 3(1), 3(13) - Entertainment duty- Exemption - Multiplex theatre complex - Collecting entertainment duty and retaining the same though it was exempt from entertainment duty - Held: Entertainment duty is a tax - High Court was not justified in holding that State Government conferred upon the theatre the retention benefit - When a person collects tax illegally it has to refund it to tax payers - If tax payers cannot be found, court would either direct the same to be paid to and/or appropriated by the State - Supreme Court may, in exercise of its jurisdiction under Article 142 of the Constitution, issue suitable directions - State shall realize the amount from the theatre to the extent it had unjustly enriched itself and pay the same to a voluntary or charitable organization - Doctrine of unjust enrichment - Constitution of India, 1950 - Article 142. F The respondent, a company engaged in the business of screening of films in its multiplex theatre complex, was liable to pay duty under the Bombay Entertainment Duty Act, 1923 @ 45% of payment for admission. The State of Maharashtra provided exemption in the matter of G payment of entertainment duty. The respondent availed of the said exemption. It, was, however, detected that during the period for which the respondent was not liable to pay any duty or was required to pay duty @ 25% only, it realized the entire duty. The appellants issued a Notice 378 H -{.Ji- ,.., ,.:l ~ · j, ~\~ .... )- ... ·i'. ~ ..... ... STATE OF MAHARASHTRA & ORS. v. SWANSTONE MULTIPLEX CINEMA (P) LTD . 379 to the respondent demanding 75% of the entertainment A tax reflected by the respondent on its tickets for the period between 24.6.05 and 22.9.05 amounting to Rs.1,16,95,846 and a further notice dated 21st January, 2006 demanding Rs.70,39,529/- for the period between 23rd September, 2005 and 5th January, 2006. The respondent filed a writ B petition before the High Court questioning the legality of the said demand notice. The High Court allowed the writ petition and quashed the Notices. Aggrieved, the State Government filed the appeal. Allowing the appeal, the Court, c 0 HELD: 1.1. Entertainment duty is a tax. Tax is a compulsory exaction. There is no equity about tax. It is a common burden. The State levied the duty in exercise of its statutory power. Sub-s. (1) of s.3 of the Bombay Entertainment Duty Act, 1923 talks in imperative terms. Sub-section (13) of s. 3 of the Act provides for an exemption. It contains a non-obstante clause. Such exemption is to be granted to the owner of the multiplex theatre complexes subject to the terms and conditions E specified in Clause (b) of s. 3(13) of the Act. The crucial words are "there shall be levied and collected by the State Government." Such levy and collection is to be made from the proprietor of a multiplex theatre complex. By reason of the said provision, no duty is to be paid for the F first three years, and for subsequent period of two years, the levy and collection would be at the rate of 25% of the rate of duty leviable under Clauses (b) and (c) of sub-s. (1) of s. 3 of the Act. Indisputably, in terms of Clause (c) of sub-s. (1) of s. 3 of the Act, the rate of entertainment G duty on payment of admission fixed by the proprietor within the limits of Brihan Mumbai Municipal Corporation would be 45% which amount would become payable from the sixth year. [Para 14] [398-F-H; 399-A-C] H 380 SUPREME COURT REPORTS [2009] 11 S.C.R. A

1.2. Clause (b) of sub-s. (13) of s. 3 of the Act uses the words "concession in duty". It becomes available to ~he proprietor of the multiplex theatre complex only in the event the terms and conditions specified therein are fulfilled. Sub-clause (i) of Clause (b) of sub-s. (13) of s. 3 B provides that the proprietor shall not charge less payment for admission than the prevailing highest rate of admission at any given time in any of the cinema theatres in the district in which the complex is situated till the period of concession under Clause (a) is over. The c "payment for admission" in terms of s.2(d) must be in relation to the levy of entertainment duty. The words "in relation to" are of great significance. The payment for admission being in relation to the levy of entertainment duty, there cannot be any composite_ptice for the tickets. [Para 15] [399-C-F] D --( .... ,.. ~

1.3. The respondent from the very inception had been charging Rs. 135/- from each of the cinema-goers., instead of Rs.103.51, and had indisputably been collecting 45% of the amount of admission fee by way of entertainment duty, i.e., the full duty payable in terms of the provisions of the said Act and the Rules. Respondent itself has shown the net rate of tickets which they charged by way of admission charges, entertainment duty separately. [Para 15 and 16] [309-G-H; 400-D-E] -~ j, E F

1.4. A proprietor of a multiplex cinema theatre when collects tax by way of entertainment duty from the cinema-goers, it would be entitled to collect such tax which is subject to levy and collection by the State. The G authority in his behalf is implicit. For the said purpose, only the statute provides for the mode and manner in which the tax is to be collected. Once the taxes are levied, s. 3 of the Act entitles the State to collect the same from the owner of the multiplex theatre complex, subject to the H ,.__ ... )' .. ~ ,..,. .., STATE OF MAHARASHTRA & ORS. v. SWANSTONE MULTIPLEX CINEMA (P) LTD . 381 concession which had been given to them. Once it is held A that the amount realizable from the cinema-goers by way of entertainment duty comes within the purview of the definition of 'tax', the High Court was not justified in its conclusion that the State Government for all intent and purport conferred the retention benefit. If the State B intended to provide for a grant, the same should have expressly been stated. The respondent cannot be granted a huge amount by a welfare state indirectly which it cannot do directly. [Para 18 and 19] [401-F, C, G- H; 402-A] c