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PETITIONER: VENKATESHWARA THEATRE

       Vs.

RESPONDENT: STATE OF ANDHRA PRADESH AND ORS.

DATE OF JUDGMENT10/05/1993

BENCH: AGRAWAL, S.C. (J) BENCH: AGRAWAL, S.C. (J) PUNCHHI, M.M.

CITATION:  1993 AIR 1947            1993 SCR  (3) 616  1993 SCC  (3) 677        JT 1993 (3)   270  1993 SCALE  (2)825

ACT: Constitution  of  India,  1950--Seventh  Schedule--List  II, Entry.    62--Taxes   on   entertainments--Andhra    Pradesh Entertainment   Tax   Act,   1039--Constitutional   Validity of--Question   as   to  legislative  competence   of   State Legislature--Factors to be consiseres. Andhra  Pradesh Entertainment Tax Act 1939--Sections  4  and 5--Pre  and  post amendment to A.P.Act 24 of  1984--Levy  of tax--Modes of--Alteration in the mode whether has effect  of altering  the nature of  Tax--Legislative  competency--Scope of. Constitution  of  India, 1950--Article  14--Equality  before law"--Construction--Law to operate differently on  different groups--Conditions for  classification-Classifying items for tax--Legislature’s discretion--Ambit of--Discrimination-when becomes. Andhra  Pradesh Entertainment Tax Act.1939--Sections  4  and 5--Whether Ultra vires of Article 14, Constitution of India. Andhra   Pradesh   Entretainment  Tax   Act,   1939--Section 5(6)--Opinion    for   payment   of   weekly    consolidated amount--Legality.

HEADNOTE: Prior  to January 1, 1984, the Andhra Pradesh  Entertainment Tax   Act,  1989,  in  Section  4,  provided  for  levy   of entertainment  tax  at  a  rate  fixed  on  the  has  is  of percentage of payment made by a person for admission to  any entertainment.  In section 4-C, in respect of entertainments held  within the jurisdiction (if any local authority  where population  did  n(it exceed 25, 000. tax was  levied  at  a certain percentage of the gross collection capacity per show and the percentage for such levy were fixed according to the population of the local authority within the jurisdiction of which the entertainment held. The  Amending Act 24 of 1984, replaced the earlier  mode  of levy of tax prescribed in Section 4 and introduced a mode of levy of tax on the has is of a prescribed percentage of  the gross collection capacity per show.  The rates 617 were  fixed  on  the  basis of a  percentage  of  the  gross collection  capacity per show varying with the  category  of

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the local area in which the theatre was situated as well  as on  the  nature  of the theatre, viz.  air  conditioned  air cooled  or  (other than air  conditioned  and  air-cooled)or permanent,semi-permanent  including  touring  and  temporary the  atres.   The proprietor was given an option  to  pay  a weekly  consolidated  amount irrespective of the  number  of shows actually held by him and the said amount was fixed  on the  basis of the prescribed number of shows per week.   The number  of show.-. varied with the nature of the theatre  as well  as  the  category of the local area in  which  it  was situate.   A fixed amount was also leviable by way  of  show tax on each show. Before the High Court, a number of writ petitions were filed challenging  the  validity of sections 4,4-A and  5  of  the Andhra  Pradesh Entertainments Tax Act, 1939, as amended  by Act  24  of  1984,  on the grounds  that  (i)  the  levy  of entertainment tax on the basis of gross collection  capacity without  reference  to the actual amount  collected  or  the actual  number  of  tickets sold or the  number  of  persons admitted was ultra vires the legislative power conferred  on the  State  Legislature  under Entry 62 of List  11  of  the Seventh Schedule of the Constitution; (ii) section 4 was hit by  Article  14  of the Constitution, as  it  gave  rise  to discrimination amongst different theatres situate within the same  local area; and that (iii) the levy  of  entertainment tax  under  section  4 being exproprietory  amounted  to  an unreasonable  restriction  on the right  guaranteed  to  the petitioners by Article 19(1) (g) of the Constitution and was not saved under Article 19(6). Relying  upon  the decisions in Western  India  Theatres  v. Cantonment   Board..   [1959]   Supp.   2   SCR   63;   Y.V. Srinivasamurthy v. State of Mysor. AIR 1959 SC 894 and State of bombay v. R.M.D. Chamarbaugwala.  A. I. R. 1957 S.C.  699 the  High Court dismissing the writ petitions held that  the State Legislature was competent to levy the tax under  Entry 62  of  List  11 of the Seventh Schedule; that  as  the  tax levied  retained  the character of  entertainment  tax,  the Legislature  was  competent  to adopt  such  basis  or  such measure,  or such method of levy; that wide  discretion  was allowed  to the Legislature in the matter of  classification and  in the matter of selection of persons to be  taxed  and that  the  two-fold  classification made by  section  4  was neither discriminatory nor arbitrary or it did not mete  out hostile  discrimination to certain theatres; that the  rates of  tax  that were prescribed under section 4  based  on  an average expected occupancy rate of less than 50 per cent  to 66  per  cent, was neither unreasonable  nor  expropriatory; that  section 5 was only optional and no) one was  compelled to  be governed by it or to opt for the  composition  scheme and  if a person opted to be governed by section 5, he  must be deemed 618 to  have  accepted all the conditions and  features  of  the scheme. During the pendency of these appeals Special leave  petition in this court the Act of 1939 was amended by A.P. Act 23  of 1988  and  A.I.  Act 16 of 1991, whereby  the  Tables  below sections  4, 4-A and 5 were substituted and subsection  (6A) was inserted in section 5. Before  this  Court  the  appellants  and  the   petitioners reiterated  two  contentions raised before  the  High  Court while  assailing the constitutional validity of  sections  4 and  5 of the Act, namely, (1) that the impugned  provisions did  not  fall  within the ambit of  the  legislavite  power conferred on the St-.Ate Legislature under Entry 62 of  List

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11  of the Seventh Schedule of the Constitution;  (ii)  that the impugned provisions were violative of Article 14 of  the Constitution, as they provided for imposing tax at a uniform rate (in a particular class of Cinema theaters  irrespective of their location and occupancy. Dismissing  the appeal and the Special Leave petition,  this Court, HELD: 1.1. While considering the question as to  legislative competence of the State Legislature, it is necessary to bear in mind that the impugned provisions provide for  imposition of  a tax and a tax has two distinct elements viz.,  subject of  the tax and the measure of the tax.  The subject of  the tax  is  the person, think or activity on which the  tax  is imposed, and the measure of the tax is the standard by which the amount of tax is measured. (632-1)) 1.2.  The  competence  of the Legislature  to  enact  a  law imposing  a tax under a particular head of  the  legislative list has to be examined in the context of the subject of the tax.   It the subject of the tax falls within the  ambit  of the  legislative power conferred by the head of  legislative entry, it would be within the competence of the  Legislature to impose such as tax. (632-E) 1.3.  Prior to the enactment of Act 24 of 1984,  there  were two  modes  for  levy of the tax, one on the  basis  of  the actual number of persons admitted to each show and the other on  the  basis  of the percentage of  the  grows  collection capacity per show.  As a result of the amendments introduced by  Act 24 of 1984, the system for levy of tax on the  basis of  number  (of persons actually admitted to each  show  was dispensed with and the tax was to be levied on the basis  of the percentage of the gross collection capacity per show and different percentages were prescribed depending on the  type of the theatre and the 619 nature of the local area where it was situated. (633-F-H) 1.4. The question whether the alteration in the said mode of levy of tax by Act 24 of 1984 has the effect of altering the nature of the tax in a way that it has ceased to he a tax on entertainments  and  falls beyond the field  of  legislative competence  conferred (in the State Legislature by Entry  62 of  List  11, must he answered in the negative.   ’The  fact that instead of tax being levied on the basis of the payment for  admission made by the persons actually admitted in  the theater  it  is  being  levied on the  basis  of  the  gross collection capacity per show calculated on the basis of  the notional aggregate of all the payments fair admission  which the  proprietor would realise per show if all the  seats  or accommodation  in respect of the place of entertainment  are (occupied and calculated at the maximum rate of payments for admission,  would  not alter the nature of the  tax  or  the subject-matter  of  the tax which continues to he a  tax  on entertainment. (634-B-D) 1.5.  The mode of levy based on ’per payment for  admission’ proscribed  under Section 4(1) prior to amendment by Act  24 of  1984 necessitated enquiry into the number of shows  held at  the  theatre  and the number of persons  admitted  to  a cinema theatre for each show and gave room for abuse both on the part of proprietor as well as other officers incharge of assessment  and  collection  of tax.  The mode  of  levy  or measure   of  the  tax  prescribed  under  section   4(1),as substituted  by Act24 of 1984, is a more convenient mode  of levy  of the tax inasmuch as it dispenses with the  need  to verify  or  enquire into the number of persons  admitted  to each show and to verify the correctness or otherwise of  the returns submitted by the proprietor containing the number of

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persons  admitted  (A)  each  show and  the  amount  of  tax collected. (634-E) 1.6.  On an examination of the rates prescribed  under  both the modes it is found that under the system (of consolidated levy  prescribed  under Section 4-C,  the  proprietor  could break  even  if the average rate of occupancy was  40%.   As regards  the  rates  prescribed under Sections 4  and  5  as amended  by  Act  24 of 1984 they are based  on  an  average expected  occupancy rate of less than 50% or  66%  depending upon the area in which the theatre is situated.  This  would mean that the entertainment tax that would be collected over and  above the average occupancy rate would  constitute  the profit  of the proprietor.  In the circumstances, it  cannot be said that the adoption of the system of consolidated levy in  Section  4(1) as amended by Act 24 of  1984  alters  the nature   of  tax  and  it  has  ceased  to  be  a   tax   on entertainments. (634-F-H) 620 1.7.  Once  it is held that tax #in entertainment  could  be levied  either  of  the two modes,  viz.,  per  payments  of admission  or gross collection capacity per show, it is  for the  legislature to decide the particular mode or  modes  of levy to be adopted and whether a choice should he  available to the proprietor of the cinema theatre in this regard.  The legislature   does   not  transgress  the  limit:   of   its legislative power confer red on it under Entry 62 of List 11 if  it decides that consolidated levy on the basis of  gross collection capacity per show shall be the only mode for levy of tax on entertainments (635-C) 1.8. The  impugned provisions contained in Sections 4 and  5 as  amended  by  Act  24 of 1984 are  not  ultra  vires  the legislative power conferred on tile State Legislature  under Entry 62 of List 11. (635-D) Western  India Theatres v. Cantonment Board, [1959] Supp.  2 SCR 63 and Y. V Srinivasamurthy v. State of Mysore AIR  1959 SC 894, explained. 2.01. The right conferred by Article 14 postulates that  all persons similarly circumstanced shall he treated alike  both in  privileges conferred and liabilities imposed, Since  the State,  in  exercise  of its  governmental  power,  has,  of necessity,  to make laws operating differently on  different groups of persons within its territory to attain  particular ends in giving effect to its policies, it is recognised that the  State  must  possess the power  of  distinguishing  and classifying persons or things to be subjected to such  laws. It  is,  however,  required  that  the  classification  must satisfy  two  conditions,  namely, (i)it is  founded  on  an intelligible different is which distinguishes those that are grouped together from others; and (ii) the differential must have a rational relation to the object sought to be achieved by the Act.It is not the requirement that the classification should  be  scientifically perfect  or  logically  complete. Classification  would  be justified if it  is  not  palpable arbitrary. (636-A-C) Re-Special Courts Bill, (1979) 2 SCR 476 at pp. 534-536  and Khandige  Sham  Bhat  v.  Agricultural  Income-Tax  Officer, [1963] 3 SCR 809 at p. 817. followed. 2.02. In the field of taxation the legislature exercises  an extremely  wide  discretion  in classifying  items  for  the purposes,  so  long as it refrains from  clear  and  hostile discrimination against particular persons or classes.  (636- E) 621 East  India Tobacco Co v. State of A.P. [1963] 1 SCR 404  at p. 411; P.M. Ashwathanarayana Shetty v. State of  Karnataka.

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[1988]  Supp.3  SCR 155 at p.m 188; Federation  of  Hotel  & Restaurant Association of India v. Union of India, [1989]  2 SCR 918 at p. 949, Kerala Hotel & Restaurant Association  v. State  of  Kerala,  [1990]  1 SCR  516  at  p.  530:  Gannon Dunkerley,  and Co. v. State of Rajasthan, [1993] 1 SCC  364 at  397;  and  San Antonio Independent  School  District  v. Bodriques, 411 US 1 at p. 41, referred to. 2.03.  just  as  a difference in the  treatment  of  persons similarly   situate  leads  to  discrimination’,   so   also discrimination  can arise if persons who are unequals,  i.e. differently  placed. are treated similarly.  In such a  case failure  on  the  part of the legislature  to  classify  the persons  who  are  dissimilar  in  separate  categories  and applying  the  same  law, irrespective  of  the  differences brings about the same consequence as in a case where the law makes  a  distinction  between  persons  who  are  similarly placed.   A  law providing for equal  treatment  of  unequal objects  transactions  or  persons  would  he  condemned  as discriminatory  if there is absence of rational relation  to the object intended to he achieved by the law. (637-A-B) K. T Moopil Nair v. The State of Kerala & Anr., [1961] 3 SCR 77, distinguished. Jalan Trading Co. (pvt.) Ltd. v. Mill Mazdoor Union,  [1967] 1  SCR  15 and Twyford Tea Co. Ltd. & Anr v.  The  State  of Kerala & Anr., [1970] 3 SCR 383, referred to. 2.04.  In the instant case, the legislature  has  prescribed different  rates  of  tax by  classifying  theatres  in  the different   classes,   namely,   air-conditioned,air-cooled, ordinary   (other  than  air-conditioned  and   air-cooled), permanent and semi-permanent and touring and temporary.  The theatre% have further been categorized on the basis (of  the type  of  the  local area in which  they  are  situate.   It cannot, therefore, be said that there has been no attempt on the part of the legislature to classify the cinema  theatres taking into consideration the differentiating  circumstances for the purpose of imposition of tax. (638-G-H) 2.05. In relation to cinema theatres it can he said that the attendance  in  the various cinema theatres within  a  local area would not be uniform and would depend on factors  which may  vary  from time to time.  But this does not  mean  that cinema theatres in a particular category of local area  will always 622 be at a disadvantage so as to be prejudicially affected by a uniform rate as compared to cinema theatres having a  better location  in  the same local area. The contention  that  the impugned  provisions  are  violative of  right  to  equality guaranteed  under  Article 14 (if the  Constitution  on  the basis  that  unequals are being treated  equally  cannot  be accepted. (639-B-C) 3.  The provision for enhancement contained  in  sub-section (16) of section 5 relates to the cases. There the proprietor of a cinema theatre opts for payment of weekly  consolidated amount.  Since the proprietor has the option to opt for  the said scheme he cannot complain that the scheme suffers  from inequality.  on  account  of  absence  of  a   corresponding provision for reduction of amount of tax. (639-E)

JUDGMENT: CIVIL APPELLATE JURISDICTION: of 1986 etc. etc. Civil Appeal No. 1527 from  the  Judgment and Order dated 7.8.1984 of  the  Andhra Pradesh High Court in Writ petition No. 8173 of 1984.

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A.K.  Ganguly.   M.B. Shetye, A. Subha Rao,  B,  Kanta  Rao, T.V.S.N.  Chari, Ms. Bharathi Reddy and Ms. Promila for  the appearing parties. The Judgment of the Court was delivered by S.C.  AGRAWAL ,J : These appeal and special leave  petitions raise  Common  questions  relating,  to  the  constitutional validity  of  Sections  4  and  5  of  the  Andhra   Pradesh Entertainments  Tax, 1939 (hereinafter referred to  as  ’the Act’).  as  amended  by  Act  24  of  1994,  providing   for imposition   of   entertainments   tax   it)   respect    of entertainments held in cinema theatres located in the  State of Andhra Pradesh. The Act has been enacted to provide for the levy of taxes on amusements and other attainments.  Prior to January 1. 1984, Section 4 of the Act provided for levy of entertainment  tax at  a rate fixed on the basis of percentage of  the  payment made  by  a person for admission to any  entertainment.   In addition, there was a provision in Section 4-A for levy of a fixed  amount, by way of "show tax", for each show.  By  Act 59  of  1976,  Section 4-C was introduced  in  the  Act  and Section 5 of the Act was substituted. under Section 4-C,  it was provided that in respect of entertain-  623 ments  held within tile jurisdiction of any local  authority whose  population  did not exceed 25,000, a  tax  for  every entertainment show would be levied, not on the basis of each payment  for admission, but at a certain percentage  of  the gross  collection  capacity per show.  The  percentages  for such  levy  were fixed according to the  population  of  the local  authority  within  the  jurisdiction  of  which   the entertainments  were held.  ’Gross collection  capacity  per show  was defined in the Explanation to Section 4-C to  mean the  notional  aggregate of all payments for  admission  the proprietor  would  realise  per show, if all  the  seats  or accommodation as determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1966 in respect of  the place of entertainment are occupied, and  calculated at the maximum rate of payments for admission as  determined by  the  said licensing authority.  The levy of tax  in  the manner  as prescribed under Section 4-C could  be  dispensed with  if  the  proprietor  of  the  theatre  opted  for  the composition  scheme contemplated by Section 5 whereunder  it was open to a proprietor to enter into an agreement with the prescribed  authority  to  compound the  tax  payable  under Section  4-C for a fixed sum which was to be arrived  at  in accordance  with  the formula prescribed  under  Section  5. According to this formula, the tax was payable on the  basis of  a percentage of the gross collection  capacity per  show for  the  fixed rounds of shows for the whole year  and  the number  of  shows was fixed on the basis of  the  number  of shows  exhibited  in the previous  year.   This  arrangement continued till December 31, 1983, whereafter the  provisions of Sections 4.4-A and 5 were amended by Act No. 24 of 1984. The provisions of Sections 4,4-A and 5, as amended by Act 24 of 1984, were as follows               "Section 4. (1) There shall be levied and paid               to  the  State Government a tax on  the  gross               collection capacity on every show (hereinafter               referred  to  as the  entertainments  tax)  in               respect of entertainments held in the theatres               specified in column (2) of the table below and               located in the located areas specified in  the               corresponding entry in column (1) of the  said               table,  calculated at the rates  specified  in               the corresponding entry in column (3) thereof.

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         THE TABLE __________________________________________________________ Local Area.    Theatre               Rate of tax on the                                      gross collection ca-                                      pacity per show _________________________________________________________ (1)             (2)                      (3) _________________________________________________________           624 (a)  Municipal corporations (i)Air-conditioned 29 per cent      and the Secunderabad      Cantonment area and (ii) Air-cooled       28 per cent      the contiguous area (iii)Ordinary         25 per cent      thereof.  (other than air-                conditioned and air-                cooled) (b)  Selection grade muni- (i) Air-conditioned 28 per cent      cipalities and      contiguors area of  (ii)Air-cooled       27 per cent      two Kilometres (iii)ordinary (other      24 per cent      thereof.       than air-conditioned      27 per cent                      and air-cooled) (c)  Special tirade munici- (i) Air-conditioned 27 per cent      palities and contiguous (ii) Air- cooled  26 per cent      area of two Kilometres (iii) Ordinary    23 per cent      thereof.          (other than air-                       conditioned and                             air-cooled) (d)  First grade munici-      palities and conti.- (i) Air-conditioned 26 per cent      guous area of two   (ii) Air-cooled      25 per cent      Kilometres thereof. (iii) Ordinary (other 22 per cent                        than air-conditioned                      and air-cooled) (e)  Second grade munici-   All categories 21 per cent      palities and contiguous      area of two Kilometres      thereof. (f)  Third grade municipalities, All categories 20 per cent      and contiguous area of two      Kilometres thereof. (g)  Gram panchayats, selec-  (i) Permanent and 19 per cent      tion grade gram panchayats, semi-permanent 20 per cent      townships and any other  (ii) Touring and      local areas.               temporary               Explanation.- For the purpose of this  section               and  section  5, the  term  ’gross  collection               capacity  per  show’ shall mean  the  notional               aggregate of all payments for, admission,  the               proprietor  would realise per show if all  the               seats or accommodation as determined by  625               the  licensing  authority  under  the   Andhra               Pradesh  Cinemas  (Regulation) Act,  1955,  in               respect  of  the place  of  entertainment  are               occupied and calculated at the maximum rate of               payments  for admission as determined  by  the               said licensing authority.               (2).  The amount of tax under sub-section  (1)               shall  be  payable by the  proprietor  on  the               actual number of shows held by him in a week."               "Section 4-A. (1) In addition to the tax under               Section  4, there shall be levied and paid  to               the State Government in the case of entertain-               ments  held  in the local areas  specified  in

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             column   (1)  of  the  Table  below,   a   tax               calculated  at  the  rates  specified  in  the               corresponding entry in column (2) thereof;                           THE TABLE ----------------------------------------------------------- Local Areas                          Rate of tax for every                                      show ----------------------------------------------------------- (a)  Municipal Corporation and the             Six rupees      Secunderabad cantonment area and      contiguous area of two Kilometers      thereof. (b)  Selection grade, Special grade and the    Six rupees      first grade municipalities and contiguous      area of two kilometers thereof. (c)  Second grade and Third grade              Four rupees      municipalities and contiguous area of      two kilometers thereof. (d)  Gram Panchayats, selection grade          Two rupees.      gram panchayats, townships and      any other local areas. -----------------------------------------------------------               (2)  The  tax leviable under  sub-section  (1)               shall be recoverable from the  proprietor.               (3)  The  provisions of this  Act  other  than               Sections 4, 6 and 13 shall, so far as may  be,               apply  in  relation to the tax  payable  under                             subsection (1) as they apply in relation to th e               tax payable under Section 4 " 626               "Section  5. ( 1) In lieu of the  tax  payable               under   section   4.  in  the  case   of   the               entertainments held in the theatres  specified               in  column (2) of the table below and  located               in   the   local  areas   specified   in   the               corresponding entry in column (1) of the  said               table,  the  proprietor thereof  may,  at  his               option  and subject to such conditions as  may               be  prescribed, pay the amount of tax  to  the               State  Government every week as  specified  in               the corresponding entry in column (3)  thereof               :                      THE TABLE ------------------------------------------------------------      Local Area       Theatre               Amount of tax ------------------------------------------------------------       (1)               (2)                     (3) ------------------------------------------------------------ (a)  Municipal corpora- (i) Air-conditioned  24 per cent tions and the                                of the gross Secunderabad canton-                         collection                                              capacity ment area and the                            per show multi- contiguous area of                           plied by 22 two kilometrers thereof.                (ii) Air-cooled    23per cent of the                                            gross collection                                            capacity per show                                            multiplied by 22.                        (iii) Ordinary    20 per cent of the                        (other than air-  gross collection                        conditioned and   capacity per show                        air-cooled)       multiplied by 22 (b)Selection grade muni- (i) Air-conditi- 23 per cent of the

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cipalities and contiguous    aned         gross collection area of two kilometrers                   show multiplied by thereof.                                  22.                         (ii) Air- cooled  22 per cent of                                           the gross collec-                                           tion capacity per                                           show multiplied                                           by 22.                        (iii) Ordinary     19 per cent of the                        (other than air-   gross collection                        conditioned and    capacity per                        air-cooled         show multiplied by                                           22. (c)Special grade munici- (i) Air-conditi- 22 per cent of the 627 palities and contiguous      oned         gross show multi- area of two kilo-                         lied by 21. metrers thereof.                        (ii) Air- cooled   21 per cent of the                                           gross collection                                           capacity per show                                           multiplied by 21.                       (iii) Ordinary      18 per cent of the                       (other than air-    gross collection                       conditioned and     capacity per show                       air-cooled)         multiplied by 21. (d)First grade municipali- (i) Air-conditi-  21 per cent of ties and contiguous         oned             gross show area of two kilo-           multilied by 21. metrers thereof.                       (ii) Air-cooled      20 per cent of                                         the gross collection                                         capacity per show                                         multiplied by 21.                       (iii) Ordinary     17 per cent of the                      (other than air-    gross collection                      conditioned and     capacity  per show                      air-colled)         multiplied by 21. (e)  Second grade muni-  All-cate-ores   16 per cent of the      cipalities and conti-               gross collection      guors area of two                   capacity per      Kilometres there of                 show. (f)  Third grade muni-   All categores   15 per cent of the      cipalities and                      gross Collection      contiguous area of                  capacity per show      two Kilometres                      multiplied by 17.      thereof. (g)  Gram panchayats,      (i) Permanent 15 per cent of the      selection grade gram  and semi-     gross collection      panchayats, townships permanent     capacity per      and any other                       show multi-      local areas.                        plied by 14.                           (ii) Touring  14 per cent of the                           and temporary gross collection                                         capacity per show                                         multiplied by 7. 628               Explanation.   For the purposes  of  computing               the  gross  collection capacity  per  show  in               respect  of  any place of  entertainment,  the               maximum seating capacity or accommodation  and               the  maximum  rate of  payment  for  admission               determined  by the licensing  authority  under               the  Andhra Pradesh Cinemas (Regulation)  Act,               1955,  as on the date when the  proprietor  is

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             permitted to pay tax under this section  shall               be taken into account.               (2)The  amount  of tax under  sub-section  (1)               shall    be   payable   by   the    proprietor               irrespective  of  the actual number  of  shows               held by him in a week.               (3)Any  proprietor who opts to pay  tax  under               this  section  shall apply in  the  prescribed               form   to  the  prescribed  authority  to   be               permitted to pay the tax under this section.               (4)On  being  so  permitted,  such  proprietor               shall pay the tax for every week as  specified               in sub-section (1).               (5)The  option  permitted under  this  section               shall continue to be in force till the end  of               the  financial  year in which such  option  is               permitted.               (6)It  shall  be  lawful  for  the  prescribed               authority to vary the amount of tax payable by               the  proprietor under sub-section  (1)  during               the  period  of option  permitted  under  this               section  any time, if there is an increase  in               the  gross  collection capacity  per  show  in               respect  of  the  place  of  entertainment  by               virtue of an upward revision of the rate of               payment  for  admission  therein  or  of   the               seating  capacity or accommodation thereof  or               where  the  local  area in  respect  of  which               permission is granted is upgraded or if it  is               found  for any reason that the amount  of  tax               has been fixed lower than the correct amount.               (7)Every proprietor who has been permitted  to               pay the tax under this section shall  intimate               to  the  prescribed authority  forthwith  such               increase in the gross collection capacity  per               show in respect of the place of entertainment,               failing  which  it shall be open to  the  pre-               scribed  authority  by  giving  fifteen   days               notice to cancel the option so permitted.  629               (8)Where a proprietor fails to pay the  amount               of  tax  on the due date, such amount  of  tax               shall be recoverable with interest  calculated               at such rate as may be prescribed.               (9)  The amount of tax due under this  section               shall be rounded of to the     nearest   rupee               and  for  this  purpose,  where  such   amount               contains part   of   a  rupee  consisting   of               paise,  then  if such part if fifty  paise  or               more it shall be increased to one rupee and if               such  part is less then fifty paise, it  shall               be ignored." As a result of the said amendments, the earlier mode of levy of  tax on the basis of the percentage of each  payment  for admission  prescribed  in Section 4 was replaced by  a  mode similar to that provided in Section 4-C, i.e., on the  basis as  prescribed percentage of the gross  collection  capacity per  show.  In the table appended below sub-section  (1)  of section  4 rates were fixed on the basis of a percentage  of the  gross  collection capacity per show  varying  with  the category of the local area in which the theatre was situated as  well  as  on  the  nature  of  the  theatre,  viz.  air- conditioned  and  air-cooled or ordinary  (other  than  air- conditioned  and  air-cooled) or  permanent,  semi-permanent including   touring   and  temporary   theatres.    In   the

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Explanation to sub-section (1) of section 4, the term  gross collection capacity per show’ was defined in the same  terms as  in  the  Explanation to Section 4-C, to  mean  the  full collection  per  show if all the seats in  the  theatre  are occupied.    In  sub-section  (2)  of  section  4,  it   was specifically  provided  that the amount of  tax  under  sub- section (1) shall be payable by the proprietor on the actual number  of shows held by him in a week.  Section 5  gave  an option to the proprietor to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the  said  amount was fixed on the basis of  the  prescribed number  of shows per week.  The number of shows varied  with the  nature  of the theatre as well as the category  of  the local area in which it was situate.  In section 4-A, a fixed amount was leviable by way of show tax on each show. A  number of writ petitions were filed in the High Court  to challenge the validity of sections 4, 4-A and 5 of the  Act, as amended by Act 24 of 1984.  The said writ petitions  were decided  by a division bench of the High Court  by  judgment dated July 19, 1984. The constitutional validity of the provisions was challenged on  three grounds, viz. : (i) the levy of entertainment  tax on the basis of gross collection capacity without  reference to  the  actual  amount collected or the  actual  number  of tickets  sold  or the number of persons admitted  was  ultra vires the legislative power 630 conferred on the State Legislature under entry 62 of List II of  the Seventh Schedule; (ii) section 4 was hit by  Article 14  of the Constitution inasmuch as by treating unequals  as equals,  it gave rise to discrirmination  amongst  different theatres  situate within the same local area; and (iii)  the levy   of   entertainment   tax  under   section   4   being exproprietory amounts to an unreasonable restriction on  the right guaranteed to the petitioners by Article 19 (1) of the Constitution, and was not saved by clause (6) of Article 19. Relying  upon the decisions of this Court in  Western  India Theatres  v.  Contonment Board, 1959 Supp. 2 SCR 63,  Y.  V. Srinivasamurthy  vs.  State of Mysore, AIR 1959 SC 894,  and State  of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC  699, the  High  Court  has held that the  State  Legislature  was competent to levy the impugned tax under entry 62 of list 11 of  the Seventh Schedule to the Constitution since the  said head  of legislative power empowers imposition of  tax  upon entertainments  and  amusements  and  not  on  the   persons entertained or the persons provided amusement and it has  to be  paid  by the persons who provides the  entertainment  or amusement.  The High Court further held that so long as  the tax  levied retains the character of entertainment tax,  the Legislature  is  competent  to  adopt  such  basis  or  such measure,  or such method of levy, as it thinks  appropriate. The High Court rejected the contention that the only  method in which Legislature can levy the entertainment tax is  that prescribed  in the old Section 4, i.e., on the basis of  the payment  of  admission.   The challenge  on  the  around  of Article 14 was negatived by the High Court on the view  that wide discretion is allowed to the Legislature in the  matter of classification and in the matter of selection of  persons to  be  taxed and that the two-fold classification  made  by section  4 could not be said to be either discriminatory  or arbitrary  much  less  could it be said that  it  metes  out hostile discrimination to certain theatres.  The High  Court also  observed that since it was not possible  to  predicate absolute equality between two theatres, and also because the situation and economics of each theatre are different, it is

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impossible to expect, or call upon the Legislature to evolve such classification which would meet every conceivable  case and  which  would not result in prejudice even to  a  single theatre.   It  was observed that different rates  have  been prescribed for different local areas and for different types of  theatres, i.e. ordinary, air-cooled and  air-conditioned and  the  Legislature  took note of the fact  that  rate  of occupancy  in villages will be lower compared to towns,  and similarly,  in  bigger towns there will be greater  rate  of occupancy,  and  finally in cities, the  rate  of  occupancy would  be  even higher and it could not be  said  that  this expectation  was unrealistic, or seunreasonable as  to  call for  interference  by the court.  As regards  the  challenge based  on Article 19 (1) (g), the High Court has taken  note of  the letter dated July 26, 1983 addressed by  the  Andhra Pradesh  Film  Chamber  of Commerce, to  the  Hon’ble  Chief Minister  of Andhra Pradesh wherein the exhibitors not  only asked  631 tax  which  suggestion was accepted by the  Government  with certain  modifications varying from 2 to 4% over  the  rates suggested by the Association.  The High Court observed  that the rates of tax that were prescribed under section 4  based on  an average expected occupancy rate of less than  50  per cent  to  66  per  cent, could not  be  said  to  be  either unreasonable  or  exproprietory.  The High  Court,  however, held that the agreements which had already been entered into by the proprietors of cinema theatres under section 5, as it stood prior to January 1, 1984, would be effective and valid for  the period for which they were entered into.  The  High Court  has  also observed that merely because the  form  for exercise of option, as contemplated under sub-section (3) of section  5,  had not been prescribed, it could not  be  said that   section  5  had  not  come  into  operation  or   was unenforceable  and  that it was open for the  proprietor  to send  an intimation on an ordinary paper and  the  authority would  be bound to treat it as proper intimation.  The  High Court   rejected   the  contention  that   section   5   was discriminatory inasmuch as it did not provide for  reduction of  the composition amount in case of reduction  of  seating capacity  of  a theatre, during the period of one  year  for which  the option was exercised although  under  sub-section (6) of section 5 the provision had been made for enhancement of   the   composition   amount   in   case   the    seating capacity/accommodation or the rates of payment for admission were  enhanced.  The High Court observed that section 5  was only optional and no one was compelled to be governed by  it or to opt for the composition scheme contained in section  5 and  that  according  to the said  scheme  the  option  once exercised was in force till the end of the financial year in which such option was permitted and that if a person opts to be  governed by section 5 he does so with his eyes open  and he  must be deemed to have accepted all the  conditions  and features  of  the scheme and it was not open to him  to  say that  he  would avail of the beneficial  provisions  of  the scheme,  while  rejecting  those  features  which  are   not advantageous to him. C.A.Nos.   4642-47/84,193-221/85,222/85,   223/85,224-28/85. 229,  232-34/  85, 1468/85 and 1469-70/85  have  been  filed against  the said decision of the High Court dated July  19, 1984.  C.A. Nos. 5722/85, 1527/86, and SLP (C) No. 3127/  85 have been filed against the decision of the High Court dated August 7, 1984 which is based on the earlier decision  dated July  19, 1984 and similarly C.A. Nos. 1858/89  and  4798/89 are  directed against the decisions dated February 12,  1986

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and March 30, 1998 based on the earlier decision dated  July 19, 1984. During the pendency of these appeals, the Act was amended by A.P.  Act  23 of 1988 and A.P. Act 16 of  1991  whereby  the Tables below Sections 4,4-A and 5 were substituted and  sub- Section (6-A) was inserted in Section 5 whereby 632 provision  was  made  for reduction of  the  amount  of  tax payable by the proprietor during the financial year if there is   a  reduction  in  the  seating  capacity  or   in   the accommodation  of  the place of entertainment  at  any  time during the period of six months commencing from the 1st  day of  April and ending with 30th day of September or from  the 1st day of October and ending with 31st day of March of  any financial year. The  learned  counsel  appearing  for  the  appellants  have assailed the constitutional validity of sections 4 and 5  on two grounds, viz. : (1) that the impugned provisions do  not fall within the ambit of the legislative power conferred  on the  State  Legislature  under Entry 62 of List  II  of  the Seventh  Schedule  of the Constitution-, and  (2)  that  the impugned provisions were violative of the right to  equality guaranteed under Article 14 of the Constitution inasmuch  as they treated unequals as equal by imposing tax at a  uniform rate  on a particular class of cinema theatres  irrespective of their location and occupancy. While considering the question as to legislative  competence of  the State Legislature, it is necessary to bear  in  mind that the impugned provisions provide fir imposition of a tax and  a tax has two distinct elements, viz., subject  of  the tax  and the measure of the tax.  The subject of the tax  is the  person, thing or activity on which the tax is  imposed, and  the  measure of the tax is the standard  by  which  the amount   of  tax  is  measured.   The  competence   of   the Legislature to enact a law imposing a tax under a particular head  of  the  legislative list has to be  examined  in  the context  of the subject of the tax.  If the subject  of  the tax  falls  within  the  ambit  of  the  legislative   power conferred  by  the head of legislative entry,  it  would  be within  the competence of the Legislature to impose  such  a tax.   It is, therefore, necessary to examine the  scope  of the  legislative entry, viz., Entry 62 of List II, which  is invoked   in  support  of  the  competence  of   the   State Legislature  to  impose the tax and  ascertain  whether  the subject of the tax imposed by the impugned provisions  falls within the ambit of the said entry.  Entry 62 of List 11  is as follows               "62.   Taxes on luxuries, including  taxes  on               entertainments,   amusements,   betting    and               gambling The  said  entry  is in pari materia with entry  50  of  the Provincial List in the Seventh Schedule to the Government of India Act, 1935.  Construing the said entry, this Court,  in the Western India Theatres v. Cantonment Board (supra),  has rejected  the contention that the entry contemplates  a  law imposing taxes on persons who receive or enjoy the  luxuries or the entertainments or the amusements  633 and has held               "The     entry     contemplates      luxuries,               entertainments  and amusements as  objects  on               which the tax is to be  imposed...............               The  entry, a,,, we have said, contemplates  a               law  with respect to the matters  regarded  as               objects  and law which imposes tax on the  act

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             of entertaining is within the entry whether it               falls  on  the giver or the receiver  of  that               entertainment." (p.69) In that case, the Cantonment Board had imposed entertainment tax  of  Rs.   10  per show on  the  cinema  houses  of  the appellant  in the said appeal and Rs. 5 per show on  others. Upholding the said imposition this Court has held-               "It is a tax imposed on every show, that is to               say,  on every instance of the exercise  of  a               particular  trade, calling or employment.   If               there  is no show, there is no tax.......  The               impugned  tax  is a tax on  the  entertainment               resulting in a show". (p. 69-70) Similarly,  in  Y.  V. Srinivasamurthy v.  State  of  Mysore (supra),   upholding   the   provisions   of   the    Mysore Cinematograph   Shows   Act,   1951   enacted   under    the Constitution, which authorised levy of tax on  conematograph shows at rates prescribed in a rising scale according to the seating accommodation and the cities where the cinematograph show was held, this Court following the decision in  Western India  Theatres  case  (supra) held that the  said  Act  was validly  enacted  in  exercise  of  the  legislative   power conferred by entry 62 of List II. In the instant case, we find that prior to the enactment  of Act 24 of 1984, Section 4 provided for levy of entertainment tax on the basis of each payment for admission to the cinema theatre and under Section 4-C, in respect of  entertainments held  within  the jurisdiction of a  local  authority  whose population  did not exceed 25,000 the tax was levied on  the basis  of the prescribed percentage of the gross  collection capacity per show.  In other words, there were two modes for levy  of the tax, one on the basis of the actual  number  of persons admitted to each show and the other on the basis  of the  percentage of the gross collection capacity  per  show. As a result of the amendments introduced by Act 24 of  1984, the system for levy of tax on the basis of number of persons actually  admitted to each show was dispensed with  and  the tax  was to be levied on the basis of the percentage of  the gross collection capacity per show and different percentages were prescribed depending on the type of the theatre and the nature  of  the  local area where it  was  situated.   Under section 5, an option was given to pay a tax on the basis  of the 634 prescribed percentage fixed for a fixed number of shows in a week irrespective of the number of shows actually held.   It is not disputed that the tax as it was being levied prior to January  1, 1984, i.e, before the amendment of Section 4  by Act  24 of 1984, was a tax on entertainment  falling  within the  ambit of entry 62 of List 11.  The question is  whether the alteration in the said mode of levy of tax by Act 24  of 1984  has the effect of altering the nature of the tax in  a way  that  it has ceased to be a tax on  entertainments  and falls  beyond the field of legislative competence  conferred on  the  State Legislature by Entry 62 of List 11.   In  our view,  the said question must be answered in  the  negative. The  fact that instead of tax being levied on the  basis  of the  payment  for  admission made by  the  persons  actually admitted  in the theatre it is being levied on the basis  of the  gross  collection capacity per show calculated  on  the basis  of  the notional aggregate of all  the  payments  for admission which the proprietor would realise per show if all the  seats  or  accommodation in respect  of  the  place  of entertainment  are  occupied and calculated at  the  maximum rate  of payments for admission, would not, in our  opinion,

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alter the nature of the tax or the subject-matter of the tax which  continues to be a tax on entertainment.  The mode  of levy  based on ’per payment for admission’ prescribed  under Section   4(1)  prior  to  amendment  by  Act  24  of   1984 necessitated  enquiry into the number of shows held  at  the theatre   and   the  number  of  persons   admitted   to   a cinematheatre for each show and gave room for abuse both  on the part of proprietor as well as other officers incharge of assessment  and  collection  of tax.  The mode  of  levy  or measure  of  the  tax prescribed  under  section  4(1),  and substituted by Act 24 of 1984, is a more convenient mode  of levy  of the tax inasmuch as it dispenses with the  need  to verify  or  enquire into the number of persons  admitted  to each show and to verify the correctness or otherwise of  the return submitted by the proprietor containing the number  of persons  admitted  to  each  show  and  the  amount  of  tax collected. Prior  to the enactment of Act 24 of 1984, tax was  leviable on  the basis of either of the two modes under Section  4(1) and4-C.   On  an examination of the rates  prescribed  under both  the modes, the High Court found that under the  system of  consolidated  levy  prescribed  under  Section  4-C  the proprietor  could  break-  even  if  the  average  rate   of occupancy  was 40%.  As regards the rates  prescribed  under Section 4 and 5 as amended by Act 24 of 1984, the High Court has  observed  that the said rates are based on  an  average expected  occupancy rate of less than 50% or  66%  depending upon the area in which the theatre is situated.  This  would mean that the entertainment tax that would be collected over and  above the average occupancy rate would  constitute  the profit  of the proprietor.  In the circumstances, it  cannot be said that the adoption of the system of consolidated levy in  Section  4(1) as amended by Act 24 of  1984  alters  the nature   of  tax  and  it  has  ceased  to  be  a   tax   on entertainments.  635 It  has been urged that since both the modes of levy of  tax were prevalent prior to the enactment of Act 24 of 1984,  an option should have been given to the proprietor of a  cinema theatre  to choose between either of the two modes and  that under the impugned provisions the choice is confined to  two modes  of assessment under the same system  of  consolidated levy based on the gross collection capacity per show, one on the  basis on the gross collection capacity per show,  under Section  4(1)  and other on the basis  of  gross  collection capacity per show for a prescribed number of shows per  week under  section 5. We find no substance in  this  contention. Once it is held that tax on entertainment could be levied by either  of the two modes, viz., per payment of admission  or gross   collection  capacity  per  show,  it  is   for   the legislature  to decide the particular mode or modes of  levy to  be adopted and whether a choice should be  available  to the  proprietor of the cinema theatre in this  regard.   The legislature   does   not  transgress  the  limits   of   its legislative power conferred on it under Entry 02 of List  11 if  it decides that consolidated levy on the basis of  gross collection capacity per show shall be the only mode for levy of tax on entertainments. We are, therefore, unable to accept the contention urged  on behalf  of  the  appellants  that  the  impugned  provisions contained  in Section 4 and 5 as amended by Act 24  of  1984 are ultra vires the legislative power conferred on the State Legislature under Entry 62 of List II. The  challenge  to the impugned provisions on the  basis  of Article 14 is grounded on the principle that  discrimination

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would result if unequals are treated equally are reliance is placed on the decision of this Court in K. T Moopil Nair  v. The  State  of Kerala & Anr, [1961] 3 SCR 77.  It  has  been urged  that  under section 4, as substituted by  Act  24  of 1984, a uniform rate has been prescribed for cinema theatres of a particular class situate in different parts of the same local  area  although the average rate of occupancy  in  the cinema theatres located in different parts of the same local area  is not the same and a cinema theatre which is  located in the central part of the local area would have better rate of  occupancy as compared to a theatre located in  a  remote part  and further that the occupancy in the theatre  depends on  various  of the factors which have not been  taken  into account.  We find it difficult to accept the contention. Article  14  enjoins  the State not to deny  to  any  person equality before the law or the equal protection of the laws. The   phrase   "equality  before  the  law"   contains   the declaration  of equality of the civil rights of all  persons within the territories of India.  It is a basic principle of republicanism.   The  phrase "equal protection of  laws"  is adopted from the Fourteenth Amendment to U.S.  Constitution. The right 636 conferred   by  Article  14  postulates  that  all   persons similarly  circumstanced  shall  be treated  alike  both  in privileges  conferred  and liabilities imposed.   Since  the State,  in  exercise  of its  governmental  power,  has,  of necessity,  to make laws operating differently on  different groups of persons within its territory to attain  particular ends in giving effect to its policies, it is recognised that the  State  must  possess the power  of  distinguishing  and classifying persons or things to be subjected to such  laws. It  is,  however,  required  that  the  classification  must satisfy  two  conditions  namely, (i) it is  founded  on  an intelligible differentia which distinguishes those that  are grouped together from others; and (ii) the differentia  must have a rational relation to the object sought to be achieved by   the   Act.   It  is  not  the  requirement   that   the classification should be scientifically perfect or logically complete.   Classification would be justified if it  is  not palpably  arbitrary. [See: Re Special Courts Bill, [1979]  2 SCR  476  at  pp.  534-5361.   It  there  is  equality   and uniformity within each group, the law will not be  condemned as   discriminative,   thou  oh  due  to   some   fortuitous circumstance  arising  out  of  a  peculiar  situation  some included  in a class get and advantage over others, so  long as  they  are not singled out for special  treatment.  [See: Khandige Sham Bhat v. Agricultural Income-Tax Officer, [1963] 3 SCR 809 at p. 8 171 Since  in  the present case we are dealing with  a  taxation measure  it is necessary to point out that in the  field  of taxation  the  decisions of this Court  have  permitted  the legislature  to  exercise an extremely wide  direcretion  in classifying  items for tax purposes, so long as it  refrains from  clear  and hostile discrimination  against  particular persons or classes. [See: East India Tobacco Co. v. State of A.P.,  19631  1 SCR 404, at p. 411,  P.M.  Ashwathanarayanan Shetty  v. State of karnataka, 1988, Supp. 3 SCR 155, at  p. 188,  Federation of Hotel & Restaurant Association of  India v. Union of India, [1989] 2 SCR 918, at p. 949, Kerala Hotel &  Restaurant Association v. State of Kerala, [1990]  1  SCR 516,  at  p. 530, and Gannon Dunkerley and Co. v.  State  of Rajasthan, [1993] 1 SCC 364, at p. 3971. Reference, in this context, may also be made to the decision of the U.S. Supreme Court in San Antonio Independent  School

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District  v. Bodrigues, 41 1 US 1 at p. 41, wherein  Justice Stewart, speaking for the majority has observed               "No  scheme  of taxation, whether the  tax  is               imposed  on property, income or  purchases  of               goods and services, has yet been devised which               is free of all discriminatory impact.  In such               a   complex   arena  in   which   no   perfect               alternatives exist, the court does well not to               impose  too  rigorous a standard  of  scrutiny               lest all local fiscal schemes become  subjects               of   criticism  under  the  Equal   Protection               Clause."  637 Just a difference in treatment of persons similarly  situate leads of discrimination, so also discrimination can arise if persons  who  are  unequals, i.e.  differently  placed,  are treated  similarly.  In such a case failure on the  part  of the  legislature to classify the persons who are  dissimilar in   separate   categories  and  applying  the   same   law, irrespective  of  the  differences, brings  about  the  same consequence  as in a case where the law makes a  distinction between  persons who are similarly placed.  A law  providing for  equal  treatment of unequal  objects,  transactions  or persons  would  be condemned as discriminatory if  there  is absence  of rational relation to the object intended  to  be achieved by the law. In  K T Moopil Nair v. State of Kerala (supra),  this  Court was  dealing with a law providing for imposition of  uniform land tax at a flat rate without having regard to the quality of the land or its productive capacity.  The law was held to be violative of Article 14 of the constitution of the ground that lack of classification had created inequality. The  said  decision in K. T Moopil Nair’s case  (supra)  has been  explained  by this Court is Jalan Trading  Co.  (Pvt.) Ltd. v. Mill Mazdoor Union, [1967] 1 SCR 15, in the  context of challenge to the validity of section 10 of the Payment of Bonus Act, 1965 providing for payment of a minimum bonus  of 4% by all industrial establishments irrespective of the fact whether  they were making profit.  This Court held that  the judgment  in Moopil Nair’s case (supra) has  not  enunciated any broad proposition that when persons or objects which are unequals are treated in the same manner and are subjected to the  same  burden  or  liability  discrimination  inevitably results.  It was observed :               "It  was  not said by the Court in  that  case               that  imposition  of  uniform  liability  upon               persons,  objects  or transactions  which  are               unequal    must   of   necessity    lead    to               discrimination.    Ordinarily   it   may    be               predicated  of unproductive agricultural  land               that   it  is  incapable  of  being   put   to               profitable agricultural use at any time.   But               that cannot be so predicated of an  industrial               establishment  which has suffered loss in  the               accounting  year, or even over  several  years               successively.    Such  an  establishment   may               suffer  loss  in one year and make  profit  in               another.  " (p.35)               It was further observed               "Equal    treatment   of   unequal    objects,               transactions  or persons is not liable  to  be               struck down as discriminatory unless there  is               simulta- 638               neously absence of a rational relation to  the

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             object  intended to be achieved by  the  law."               (p.36) The  limitations  of the application of the  principle  that discrimination  would  result  if unequals  are  treated  as equal,  in the field of taxation, have been pointed  out  by this  Court in Twyford Tea Co. Ltd. & Anr. v. The  State  of Kerala  &  Anr., [1970] 3SCR 383, wherein tax at  a  uniform rate was imposed on plantations.  Hidayatullah, CJ, speaking for the majority, while upholding the tax, has observed               "It may also be conceded that the uniform  tax               falls more heavily on some plantations than on               others   because  the  profits   ,ire   widely               discrepant.    But   does   that   involve   a               discrimination  ?  If  the answer  be  in  the               affirmative hardly any tax direct or  indirect               would  escape the same ensure for taxes  touch               purses  of  different  lengths  and  the  very               uniformity of the tax and its equal  treatment               would  become its undoing.  The rich  and  the               poor pay the same taxes irrespective of  their               incomes  in many instances such as the  sales-               tax and the profession tax etc." (pp. 389-390)               It was further observed :               "The  burden  is on a  person  complaining  of               discrimination.   The  burden is  proving  not               possible  ’inequality’ but  hostile  ’unequal’               treatment.  This is more so when uniform taxes               are  levied.  It is not proved to us  how  the               different  plantations  can  be  said  to   be               hostilely  or  unequally treated.   A  uniform               wheel  tax on cars does not take into  account               the value of the car, the mileage it runs,  or               in the case of taxis, the profits it makes and               the   miles  per  gallon  it   delivers.    An               ambassador taxi and a fiat tasi give different               out  turns  in  terms of  money  and  mileage.               Cinemas pay the same show fee.  We do not take               a doctrinaire view of equality." (p.393-94) In  the  instant  case, we find  that  the  legislature  has prescribed  different rates of tax by  classifying  theatres into different classes, namely, air-conditioned, air-cooled, ordinary   (other  than  air-conditioned  and   air-cooled), permanent and semipermanent and touring and temporary.   The theatres  have further been categorized on the basis of  the type  of  the  local area in which  they  are  situate.   It cannot, therefore, be said that there has been no attempt on the part of the legislature to classify the cinema  theatres taking into consideration the differentiating circum-  639 stances for the purpose of imposition of tax.  The grievance of the appellants is that the classification is not perfect. What  they  want  is that there  should  have  been  further classification  amongst  the theatres falling  in  the  same class  on the basis of the location of the theatre  is  each local area.  We do not think that such a contention is  well founded. In  relation  to  cinema theatres it can be  said  that  the attendance  in  the various cinema theatres within  a  local area would not be uniform and would depend on factors  which may  very  from time to time.  But this does not  mean  that cinema theatres in a particular category of local area  will always be at a disadvantage so as to be prejudicely affected by  a uniform rate as compared to cinema theatres  having  a better  location in the local area.  It is,  therefore,  not possible   to  accept  the  contention  that  the   impugned

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provisions  are  violative of right to  equality  guaranteed under  Article  14  of the Constitution on  the  basis  that unequals are being treated equally. Another  contention  that has been urged on  behalf  of  the appellants  is  that  while provision was  made  under  sub- section  (6) of section 5 for enhancement of the  amount  of tax  in  the  event  of increase  in  the  amount  of  gross collection  capacity, there was no  corresponding  provision for  reduction  for  the  amount of  tax  in  the  event  of reduction  in  the  gross  collection  capacity.   The  said provision  for enhancement contained in sub-section  (6)  of section  5  relates to the cases where the proprietor  of  a cinema  theatre  opts  for payment  of  weekly  consolidated amount.  Since the proprietor has the option to opt for  the said scheme he cannot complain that the scheme suffers  from inequality   on  account  of  absence  of  a   corresponding provision for reduction of amount of tax.  In any event  the said  grievance has how been removed by the introduction  of sub-section (6-A) in section 5 by amendments, introduced  in the Act by A.P. Act 23 of 1988 and A.P. Act 16 of 199 1. In  the  result, we find no merit in these appeals  and  the special  leave petition and they are accordingly  dismissed. The parties are, however, left to bear their own costs. V.P.R.                          Appeals dismissed. 640