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PETITIONER: THE WESTERN INDIA THEATRES LTD.

       Vs.

RESPONDENT: THE CANTONMENT BOARD, POONA,CANTONMENT

DATE OF JUDGMENT: 16/01/1959

BENCH: DAS, SUDHI RANJAN (CJ) BENCH: DAS, SUDHI RANJAN (CJ) DAS, S.K. GAJENDRAGADKAR, P.B. WANCHOO, K.N. HIDAYATULLAH, M.

CITATION:  1959 AIR  582            1959 SCR  Supl. (2)  63  CITATOR INFO :  R          1959 SC 586  (4)  F          1959 SC 894  (2)  R          1962 SC1006  (74)  E          1989 SC1949  (7)  R          1990 SC  85  (23)  R          1992 SC1848  (7)

ACT:        Entertainment   Tax-Imposition  on   cinema   show-Validity-        Cantonments  Act,  1924  (Act  11  of  1924),  s.  60-Bombay        Municipal  Boroughs Act, 1925 (Bom.  XVIII of 1925), s.  73-        Government of India Act, 1935, s. 100, Sch.  VII, Entry 50.

HEADNOTE: The  appellant, a public limited company, was the lessee  of wo  cinema  houses, " West, End " and " Capitol  "  situated within the Poona cantonment area. , By a notification  dated June  17, 1948, the Bombay Government with the  sanction  of the Governor-General-in-Council imposed certain taxes in the cantonment of Poona including an entertainment tax of Rs. 10 per show on the appellant’s cinema houses and Rs. 5 per show on  others.  The appellant, who paid the tax under  protest, brought the suit, out of which the present appeal arose, for a declaration that the 64 imposition  of the said tax by the respondent  was  illegal, for  a permanent injunction restraining it from levying  the tax  and  for the refund of Rs. 45,802, paid as tax  by  the appellant.   The trial Court decreed the suit but  the  High Court, on appeal by the respondent, reversed the decision of the  trial Court and dismissed the suit.’ Under s. 60(1)  of the  Cantonments  Act, 1924 (11 Of 1924), read  with  S.  73 (xiv)  Of  the  Bombay Municipal Boroughs  Act,  1925  (Bom. XVIII  of 1925), the respondent had the power to impose  any other  tax  which the Bombay  Provincial  Legislature  could impose  on  the  province.   The  question,  therefore,  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

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undoubtedly  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  on  luxuries,  including taxes on entertainments, amusements, betting and gambling ", the said entry contemplated a law imposing taxes on  persons who  enjoyed the luxuries, entertainments or amusements  and not on persons who provided them.  Such a tax, if levied  on the  latter would be one on profession, trade or calling  as contemplated by Entry 46 of the said Schedule and could  not 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. Held, that the contention must be negatived. It  is well-settled that in construing an  entry  conferring legislative   powers,  the  widest   possible   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] 11 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, entertainments  or  amusements.  What 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.

JUDGMENT: 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 65 Appeal No. 742 of 1951 from Original Decree, arising out  of the  judgment and decree dated July 31, 1951,, of the  Court of the Senior Civil Judge, Poona, in Special’ Suit No. 89 of 1950. H.   D. Banaji, R. A. Gagrat and G. Gopalakrishnan, for  the appellant. 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 the judgment and decree of the  High Court of Bombay dated February 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.  89 of 1950 and dismissing the appellant’s suit  against the respondent 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 company registered  under the  Indian  Companies  Act, 1913.  It is a  lessee  of  two cinema  Houses  known  respectively as " West End  "  and  " Capitol  "  situated within the limits of  Poona  cantonment area.   It  exhibits in the said  two  Houses  cinematograph films, both foreign and Indian. On  March  20, 1947, a notice was issued by  the  respondent

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whereby, in exercise of the powers conferred on it by s.  60 of  the Cantonments Act, 1924 (11 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.  4160 dated June 17, 1918, and intimated that the draft amendments 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 1. Cinemas, Talkies or Rs.       5-0-0 per    dramas                 Rs.   10-0-0 show 2. Circus                 Rs.   20-0-0 per show 3.  Horse  Races            Rs.  100-0-0  per  day  of  race meeting. 4.   Amusement park       Rs.   20-0-0 per day provided as follows:- 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 Association  of India  submitted certain objections to the  proposals.   The Cantonment  Executive  Officer, Poona, by his  letter  dated July  8, 1947, informed the Secretary 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 Government  of  India, Defence Department  notification  No. 1463 dated May 7, 1947.  On June 17,1948, a notification was issued  by  the Government of Bombay to the effect  that  in supersession of the notifications of Government noted on the margin  and 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 Rs. 5-0-0 per show 2.   Circus    Rs. 2-0-0 per show 3.   Horse Races    Rs. 100-0-0 per                         day of race                         meetings. 4.   Amusement park Rs. 20-0-0 per                         day." 67 The  appellant  paid the tax under protest and on  or  about April  19,  1950, filed a suit (being suit No. 89  of  1950) against  the  respondent in the Court of  the  Civil  Judge, Senior  Division,  Poona for a declaration  that  the  levy, collection or recovery of the said tax by the respondent was illegal and invalid, for a permanent 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 preferred 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,

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allowed  the appeal and dismissed the appellant’s suit  with costs  throughout.  The High Court, however, granted to  the appellant a certificate of fitness for appeal to this  Court and hence this final appeal questioning the validity of  the said tax. At  all  times material to this appeal  the  respondent  was governed  by  the Cantonments Act, 1924 (Act  11  of  1924). Section 60 of that Act runs as follows:- "  60(1)  The Board may, with the previous sanction  of  the local  Government, impose in any Cantonment any  tax  which, under  any  enactment for the time being in  force,  may  be imposed  in  any municipality 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  (Bom.   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 might  be imposed by a municipality.  The relevant  portions thereof, prior to its present adaptation, were as follows:- "  Subject  to  any  general or  special  orders  which  the Provincial  Government  may make in this behalf and  to  the provisions of sections 75 and 76, a municipality may  impose for  the  purposes of this Act any of the  following  taxes, namely:- (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 provincial 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 counsel for the appellant contends  that the impugned tax is not covered by this entry at all.   This entry,  according to him, contemplates a law imposing  taxes on  persons 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 entertainment  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 entry 46, namely, taxes on professions, 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.  We are unable  to  accept this argument as sound. 69 As  pointed out by this’ Court in Navinchandra  Mafatlal  v. The  Commissioner of Income Tax, Bombay City (1),  following certain  earlier decisions referred to therein, the  entries in  the legislative list should not be read in a  narrow  or

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restricted  sense and that each general word should be  held to  extend to all ancillary or subsidiary matters which  can fairly and reasonably be said to be comprehended in it.   It has been accepted 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 luxuries or  entertainments or  amusements " in entry 50 as having 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, entertainments, and amusements as objects on which the tax is to be imposed.  If the words are to be so 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 entertainment tax as  a  tax  on expenditure  and,  indeed, when the tax is  imposed  on  the receiver  of  the  entertainment, 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, entertainments  or amusements.  The entry, as we have  said, contemplates a law with respect to these matters regarded 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 the privilege of carrying  on any  trade or calling.  It is a tax imposed on  every  show, that  is  to say, on every instance of the exercise  of  the particular  trade,  calling or employment.  If there  is  no show, there is no tax.  A (1)  [1955] 1 S.C.R. 829. 70 lawyer  has  to  pay  a tax or fee to  take  out  a  license irrespective of whether or not he actually practises.   That tax  is  a  tax for the privilege of  having  the  right  to exercise  the profession if and when the person  taking  out the license chooses to do so.  The impugned tax is a tax  on the  act  of  entertainment resulting in  a  show.   In  our opinion,  therefore, s. 73 is a law with respect to  matters enumerated  in  entry  50 and not entry 46  and  the  Bombay legislature had ample power to enact this law. 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 treatment 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 meaning,  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 Bihar (1) and Shri Rama Krishna Dalmia v. Shri Justice S. R. Tendolkar (2).  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 house 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 circumstances  than the tax that may be im. posed  on  shows

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given   in   a   smaller  cinema   house   containing   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  decision  as  to whether  there  had  been  any  real discrimination in the facts and circumstances of this  case. It (1) [1951] S.C.R. 1045. (2) [1959] S.C.R. 279. 71 may  be  that the appellant may in  some  future  proceeding adduce  evidence  to establish that there are  other  cinema houses similarly situate and that the imposition of a higher tax  on the appellant is discriminatory as to which  we  say nothing;  but  all  we need say is that  in  this  suit  the appellant  has not discharged the onus that was on him  and, on  the material on record, it is impossible for us to  hold in this case that there has been any discrimination in fact. For reasons stated above this appeal must be dismissed  with costs.                                   Appeal dismissed