Deep Chand v. Transport Services (Development) Act."

imposition of the said tax by the respondent was illegal, for a . permanent injunction restraining it from levying the tax and for The W.stem lndrn the refund of Rs. 45,802, paid as tax by the appellant. The trial Court decreed the snit but the High Court, on appeal by the respondent, reversed the decision of the trial Court and The Cantonment dismissed the snit. Under s. 60(1) of the Cantonments Act, 1924 (II of 1924), read with s. 73 (xiv) of the Bombay Municipal Boa,d, Poona, Boroughs Act, 1925 (Born. XVIII of 1925), the res]'Ondent had the Cantonment power to impose any other tax which the Bombay Provincial Legislature could impose on the province. The question, there fore, 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 undou btedly.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 dn luxuries, including taxes on entertainments, amusements, betting and gambling", the said entry contemplat ed a law imposing taxes on persons who enjoyed the lnxnries, entertainments or amusements and not on persons who provided them. Such a tax, if levied on the la tier would be one on pro fession, trade or calling as contemplated by Entry 46 of the said Schedule and could not exceed Rs. roo per annum under s. 142A of the Government of India Act, 1935, and Rs. 250 per annum under Art. 276(2) of the Constitution. D Held, that the contention must be negatived. It is well-settled that in construing an entry conferring legislative powers, the widest pos~ible 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, [1955] 1 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, entertain ments or amusements. VVhat 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 pro fession 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 (2) S.C.R. SUPREME COURT REPORTS 65 Appeal No. 742 of 1951 from Original Decree, ansmg out of the judgment and decree dated July 31, 1951, Th w 1 of the Court of the Senior Civil Judge, Poona, in Special Suit No. 89 of 1950. 'nu:t::;~1; ia 1 d' z959 v. H. D. Banaji, R. A. Gagrat and for the appellant. G. Gopala7crishnan, The Cantonment Boa~d. Poona, Cantonment Das C. ]. 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 tlre judgment and decree of the High Court of Bombay dated Febru ary 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. 89of1950 and dis missing the appellant's suit against the rc3pondent 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·eompany regiiltered under the Indian Companies Act, ll913. It is a lessee of two cinema Houses known respectively as "West End" and "Capitol" situated wi1'ohin limits of Poona cantonment area. It exl!ibits 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 conferr ed on it by s. 60 of the Cantonments Act, 1 !)24 (II 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. 4ll60 dated June 17, 1918, and intimated that the draft; amend ments 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 SUPREME COURT REPORTS [1959] Supp. 1959 The Western India Theatres Ltd. v. The Cantonment Board, Poona, Cantonment I. Cinemas, Talkies or dramas

#2. Circus 3. Horse Races Rs. 5-0-0 \ per Rs. 10-0-0 Rs. 2-0-0 per show Rs. 100-0-0 per day of

#4. Amusement park provided as follows :- race meetings. Rs. 20-0-0 per day. Das C. J. •

#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 A'ssoci- ation of India submitted certain objections to the proposals. The Cantonment Executive Officer, Poona, by his letter dated July 8, 1947, informed the Secre tary 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 Governmen17 of India, Defence Department notifi cation No. 1463 dated May 7, 1947. On June 17, 1948, issued qy the Government of a notification was Bombay to the effect that in supersession of the notifica tions of Go~ernment noted on the margin ;i,nd 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

#2. Circus 3. Horse Races Rs. 5-0-0 per show Rs. 2-0-0 per show Rs. 100-0-0 per day of race meetings.

#4. Amusement park Rs. 20.0-0 per day". (2) S.C.R. SUPREME COURT REPORTS 67 The appellant paid the tax under protest and on or r959 v. about April 19, 1950, filed a suit (being suit No. 89 of Th w-t- 1 a· 1950) against the respondent in the Court of the Civil ~he;;,:;nLt; •a Judge, Senior Division, Poona for a declaration that the levy, collection Or recovery of the said tax by the The Cantonment respondent was illegal and invalid, for a ·permanent Board, Poona, 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 pre- ferred 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, how- ever, granted to the appellant a certificate of fitness for appeal to this Court and hence this fim,l appeal questioning the validity of the said tax. Cantonm•nt c . ]. D At all times material to this appeal the. reE;pondent was governed by the Cantonments Act, 1921l (Act II of 1924). Section 60 of that Act runs as follows:- " 60(1) The Board may, with the previous sanc tion of the local Government, impose in any Canton ment any tax; which, under any enactment for the time being in force, may be imposed in any munici pality 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 (Born. XVIII of 1925). Therefore the powers of the respondent to levy and collect taxes under the provisions of the Cantonments Act were co-extensive · 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 SUPREME COURT REPORTS [1959] Supp. '959 - might be imposed by a municipality. The relevant . portions thereof, prior to its present adaptation, were The Western India Theatres Ltd. v. .c as .ioJ}OWS : - " Subject to any general or special orders which The Cantonme•;t the Provincial Government may make in this behalf Board, Poona, and to the· provisions of sections 75 and 76, a munici Cantonment pality may impose for the purposes of this Act any of the following taxes, namely:- . ..... · ................................ ' .......................... . Das C. ]. (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 provin cial 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 coun sel for the appellant contends that the impugned tax is not covered by this entry at all. This entry, accord ing to him, contemplates a law imposing taxes on per sons who receive or enjoy the luxuries or the enter tainments 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 en tertainment or amusement, but simply carry on their profession, trade or calling. Learned counsel urges that the impugned law is really one with respect to matters specified in ent.ry 46, namely, taxes on pro fessions, trades, callings and employments and, there fore, 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. VVe are unable to accept this argument as sound. (2) S.C.R. SUPREME COURT REPORT8 69 As pointed out by this Court in Navinchandra r959 - 1 Das C . • Theatres Ltd. v. M.afa~lal v. T~e Commi.ssioner. of Inc~m_e Ta'.I.:, Bombay The Western India City ( ), followmg certam earlier dec1s10ns referred to therein, the entries in the legislative list should not be read in a narrow or restricted sense and that each The Cantonment general word should be held to extend to all ancillary Board, Poona, or subsidiary matters which can fairly and reasonably Cantonment be said to be comprehended in it. It has been accept- ed as well settled that in construing such an entry conferring legislative powers the widest possible con- struction 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 h1xuries or entertainments or amusements" in entry 50 as hav- ing a restricted meaning so as to confine the operation of the law to be made thereunder only to taxes on persons receiving the luxuries, entertainments, or amusements. The entry contemplates luxuries, enter tainments, and amusements as objects on which the tax is to be imposed. If the words are to be E:O regard- ed, 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 entertain· ment tax as a tax on expenditure and, indeed, when the tt; Lx is imposed on the receiver of the entertain- ment, 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, entertain- ments or amusements. The entry, as we ha.ve said, contemplates a law with respect to these matters re- garded 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 t.he privi- lege of carrying on any trade or calling. It is a tax imposed on every show, that is to say, on every inst- ance of the exercise of the particular trade, calling or employment. If there is no show, there is no tax. A (r) [1955] r S.C.R. 829. 70 SUPREME COURT REPORTS [1959] Supp. · · t ,. Tl The Western India Th Ltd · at tax is a ax ior r959 - t "a ~' · lawyer has to pay a tax or fee to take out a license irrespective of whether or not he actually practises. · ht to exercise the profession if and when the person tak The Cantonment ing out the license chooses to do so. The impugned tax is a tax on the act of entertainment resulting in a Board, Poona, show. In our opinion, therefore, s. 73 is a law with Cantonment respect to matters enumerated in entry 50 and not legislature had ample entry 46 and the Bombay power .to enact this Ia w. · "] e pnv1 ege o · e ng Das C.j. f h 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 treat- • ment 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 mearning, 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 ) and Shri Rama Krishna Dalmia v. Shri Bihar (1 Justice S. R. Tendollcar ('). 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 h.ouse 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 circumstaµces than the tax that may be im posed on shows given in a smaller cinema house con taining 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 deci sion as to whether there had been any real diserimi nation in the facts and circumstances of this case. It (1) [1951] S.C.R. 1045. (2) [1959] S.C.R. 279. (2) S.C.R. SUPREME COURT REPORTS 71 may be that the appellant may in some future proce- eding adduce evidence to establish that there are other Th w t cinema houses similarly situate and that the .imposi- tion of a higher tax on the appellant is discriminatory as to which we say nothing; but all we need say is The Cantonment that in this suit the appellant bas not discharged the Board, Poona, onus that was on him and, on the material on record, Cantonment it is impossible for us to hold in this case that there has been any discrimination in fact. 1 Das C . • x959 v. 1 a· eThe;;,;;~t;, '" For reasons stated abve this appeal must be dismis I959 January z6. sed with costs. Appeal dismissed THE WESTERN INDIA THEATRES LTD. v. MUNICIPAL CORPORATION OF THE CITY OF POONA {S. R. DAS, c. J., s. K. DAS, P. B. GAJENDRAGADKAR. K. N. WANCHOO and M. HIDAYATULLAH, JJ.) Municipality, Power of-Imposition of tax on cinema show Constitutional validity of enactment-Enhancement of such tax Validity-Bombay District Municipal Act, I90I (Bom. III of IgoI), s. 59(I) (XI)-Bombay Municipal Boroughs Act, I925 (Bom. XVIII of Ig25), s. 60. The appellant, a public limited company, was a lessee of four cinema houses situated within the municipal limits of Poona City where it used to exhibit cinematograph films. The respondent, the Municipal Corporation of Poona, in exercise of its power under s. 59(1) (XI) of the Bombay District Municipal Act, 1901, levied with effect from October l, 1920, a tax of Rs. 2 per day as license fee on the-owners and lessees of cinema houses. That Act governed the Municipality till 1926 and thereafter it was governed bythe Bombay Municipal Boroughs Act, 1925. The tax was enhanced to Re. l per show on June 3, 1941, and to Rs. 5 per show on June 9, 1948. By the suit, out of which the present appeal arose, the appellant sought for a declaration that the levy of the said tax, the rules framed in connection there with and the enhancement of the tax as aforesaid were iIIegal and ultra vires. The trial court decreed the suit in part but the High Court in appeal reversed the decision of the trial court