Full Judgment Text
2016:BHC-OS:17691-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 270 OF 1996
Maneck Davar, carrying business as sole
proprietor in the name and style of
Spenta Multimedia of Bombay Indian
Inhabitant, having his office at
nd
Newspaper House, 2 Floor, Sasson
Docks, Colaba, Bombay 400 005 .... Petitioner
vs
1 State of Maharashtra,
2 Secretary, Government of Maharashtra,
Cultural Affairs Department, Mantralaya,
Ministry of Cultural Affairs & Sports,
Bombay 400 032
3 Collector, Bombay Suburban District,
having his office at BMRDA Building,
th
4 Floor, Bandra (East), Bombay 400051
4 Recovery Officer,
having his office at Customs House,
Bombay 400 023
5 National Association for The Blind,
having its office at Jehangir Wadia
Building, 51, Mahatma Gandhi Road,
Fort, Bombay 400 023
6 Dinu Gandhi, of Bombay Indian
Inhabitant ViceChairman Programme
Committee for National Association for The Blind,
having its office at Jehangir Wadia
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Building, 51, Mahatma Gandhi Road,
Fort, Bombay 400 023 .... Respondent
ALONG WITH
WRIT PETITION NO. 116 OF 1996
1 National Association for The Blind,
having its office at Jehangir Wadia
Building, 51, Mahatma Gandhi Road,
Fort, Bombay 400 023
2 Dinoo V. Gandhi, of Bombay, Indian
Inhabitant, ViceChairman, Programme
Committee, National Association for The Blind,
Finance Raising Committee, residing at
2223, Franclin Apartment,
Pali Mala Road, Pali Hill, Bandra,
Bombay 400 050 ….. Petitioners
vs.
1 The Collector, Bombay Suburban District,
Entertainment Branch,
having his office at BMRDA Building,
nd
2 Floor, Bandra (East), Bombay 400051
2 State of Maharashtra,
through the Govt. Pleader,
High Court, Bombay
3 Mr. Maneck Davar, of
Spenta Multi Media
having his office at
nd
Newspaper House, 2 Floor, Sasson
Docks, Colaba, Bombay 400 005
4 Collector of Bombay, having
his office at Old Custom House,
Bombay 400 001 …. Respondents
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Dr. Milind Sathe, Senior Advocate i/by M/s. Prakash & Co for the
petitioner in WP/270/1996 and for Respondent No.3 in
WP/116/1996.
Mr. A.I. Patel, Addl. G.P. for respondent/State in both matters.
CORAM: ANOOP V. MOHTA AND
A. S. GADKARI, JJ.
DATE : December 22, 2016
ORAL JUDGMENT (Per Anoop V. Mohta, J.) :
Called out from final hearing board.
2 Both the Petitioners have challenged the common
orders/action initiated by the State of Maharashtra (the State),
through their respective Departments. The following prayers are
made in Writ Petition No.270/1996:
“(A) That this Hon'ble court be pleased to declare
th
that the performance held on 26 April 1995 at
Andheri Sports Complex by foreign music group
Bon Jovi as exempt from payment of
entertainment duty and surcharge in view of the
rd nd
Notification dated 23 October 1972, 22
th th
November 1973, 4 January 1994 and 30 July
1977 issued under the provisions of the Bombay
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Entertainment Duty Act and the Rules, 1923
framed thereunder.
(B) calling for the records and proceedings of
the Petitioner case pertaining to the impugned
th th
orders dated 9 May 1995, 25 September 1995,
th st th
13 October 1995, 21 November 1995 and 8
January 1996. (Exhibits – J, W, Z, CC and DD
respectively hereto) and after going into the
legality and propriety thereof, be pleased to quash
and set aside the same.”
The events and related common, legal issues are relevant
for adjudication of the writ petitions.
3 In 1958, The then Bombay Government under section 7 of
the Bombay Entertainment Duty Act (the Act) made Rules known as
“Bombay Entertainment Duty Rules, 1958” (the Rules). The Rules
provide for grant of exemption from payment of entertainment duty
by issuing Notifications. On 24/5/1959, a Government Resolution
was passed providing for exemption to foreign music / orchestra from
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the payment of entertainment duty. On 23/10/1972, it was clarified
that “A doubt has been raised whether the phrase ‘originating in India’
did not cover foreign amateur artists who were residing in India for
reasons merely participating in dramatic performances.”. The clarified
that Indian dramatic performances originating in India should also
include foreign amateur artist including tourist who are residing India
for reasons other than participating in dramatic performances and
making financial benefits for themselves and dramas performed by
such foreign amateur artist should be exempted from the liability to
pay entertainment duty. On 27/11/1973, further Government
Resolution issued, inter alia , providing that all performances of music
(classical, light and instrumental) and classical and folk dancing from
western and eastern countries should be exempted from liability to
pay entertainment duty. On 4/1/1974, a clarification was sought as
to whether beat music should be included within the scope of the
previous order where ball dancing and cabaret dancing are also
involved. The Government clarified that while beat music should be
included within the scope of these exemption orders, but ball dancing
and cabaret dancing are not covered by these orders for the purpose
of general exemption from the liability to pay entertainment duty
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under the Act. The Government further clarified that performances of
music (classical, light and instrumental) and classical and folk dancing
from western and eastern countries would be taxed if they include
even one single small item of ball dancing and cabaret dancing.
4 On 30/7/1977, the Government issued a Resolution
dealing with the levy of surcharge in respect of entertainment
permanently exempted from payment of entertainment duty under
Section 6 (3) of the Act. The Government directed that surcharge
levied under Section 3 AA of the Act was not to be collected on the
following firms of entertainment from the date of issue of this
Resolution:
“…
(n) All performance of music (classical, light and instrumental) and
classical and folk dancing from Western and Eastern countries.
(o) Beat Music. But performances of music (classical, light and
instrumental) and classical and folk dancing from Western and Eastern
countries would be taxed if they include even one single small item of
Ball Dancing and/or Cabaret Dancing .”
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5 On 6/3/1995, the Petitioner (W. P./270/1996) addressed
a letter to Respondent No.5 delineating the proposal and the approved
outlines of the proposed programme. On 17/4/1995, the Petitioner
informed Respondent No.5 that they were organising a performance
by an International rock group “Bon Jovi” in late April 1995 and as the
Group was keen on performing for charity. They suggested the name
of Respondent No.5. On 24/4/1995, the Additional Collector, Bombay
Suburban District informed Respondent Nos.5 and 6 that the Music
Show proposed would attract the entertainment duty and surcharge.
Petitioner thereupon made a formal representation to the Secretary,
Cultural Affairs, Government of Maharashtra. On 25/4/1995,
Respondent No.5 (National Association of Blind) addressed a letter
seeking exemption from the payment of entertainment duty and
surcharge. On 25/4/1995, An order was passed by the Social Welfare
Cultural Affairs and Sports Department exempting the Music Show
from payment of entertainment tax and surcharge. The order refers to
three Government Resolutions dated 23/10/1972, 4/1/1973 and
30/7/1977 passed by Social Welfare Cultural Affairs, Sports and
Tourism Department. On 26/4/1995, the Music Show was held
accordingly.
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6 On 5/5/1995, the Petitioner made a complaint to the Joint
Commissioner of Police, Greater Bombay Shri M.N. Singh, as he
apprehended that certain people who had entered the Andheri Sports
Complex i.e. the venue of the music show without tickets or on the
basis of forged tickets. On 9/5/1995, the Deputy Secretary, of the
State withdrew the exemption as granted on 26/4/1995. On
15/5/1995, Respondent Nos.5 and 6 made a representation against
the unilateral cancellation of exemption. On 21/05/1995, the
Petitioner addressed a letter to the Deputy Commissioner of Police,
inter alia, complaining about the forged tickets. On 30/5/1995, the
Petitioner once again requested the Deputy Commissioner of Police
(Crime Branch) to carry out investigation. On 6/6/1995 and
15/6/1995, the Collector, BSD called upon Respondent Nos.5 and 6 to
forward necessary documents and other details / particulars asked for
therein with regard to the Music Show. On 12/7/1995, the Petitioner
forwarded to Respondents the particulars of expenses incurred for the
Music Show and all other particulars. Respondent No.5 sought
further particulars and the Petitioner supplied it. On 17/8/1995, a
notice was sent by the office of the Collector, BSD to
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Respondent Nos.5 and 6 calling upon them to pay the entertainment
duty with surcharge of Rs.69,72,000/ and Rs.20,00,000/
respectively totalling to Rs.89,92,000/. On 16/8/1995, Respondent
No.5 addressed a letter to the Collector, BSD. On 22/8/1995,
Respondent No.5 also addressed a similar letter to the Petitioner
requesting him to send audited statement of accounts. On
31/8/1995, the Petitioner was summoned to the office of the Collector
and his statement was recorded. On 31/8/1995, Petitioner handed
over audited statement of accounts.
7 On 28/9/1995, the Collector, BSD directed that an amount
of Rs. 89,92,300/ as entertainment duty and surcharge, be recovered
jointly and severally from the Petitioner and Respondent No.5 as
arrears of land revenue. On 12/10/1995, the Petitioner addressed a
letter to Deputy Commissioner of Police, Crime Branch, Economic
Offences, requesting to investigate the matter on urgent basis. On
13/10/1995, Respondent No.5 addressed a letter to the Hon’ble
Minister for Cultural Affairs forwarding him copy of Income –
Expenditure Accounts and requesting him to look into the matter and
do the needful. On 13/10/1995, Letter addressed by the Collector,
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BSD calling upon the Petitioner to make payment of alleged duty of
Rs.89,92,000/ with surcharge, failing which the same will be
recovered as arrears of land revenue. On 18/10/1995, the Petitioner
through his Advocate addressed a letter to the Collector, BSD drawing
the attention of the Collector to the Resolutions exempting the
performance of Music from payment of entertainment duty and
surcharge. Copy of the letter was sent to the Secretary, Government of
Maharashtra, Social Welfare Department. On 16/11/1995,
Respondent No.5 addressed a reply to the Collector through their
Advocates. On 21/11/1995, Notice was sent to the Petitioner by the
Recovery Officer making a claim of payment of the alleged duty
arrears and threatening the Petitioner with attachment for recovery of
the same. On 8/1/1996, again a notice was sent to the Petitioner by
the Recovery Officer.
8 On 17/1/1996, Respondent No.5 filed Writ Petition No.
116 of 1996, challenging some of the orders. On 24.1.1996 and
5/2/1996, the Petitioner sought details of exemption for other similar
shows from the State Department.
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9 On 7/2/1996, writ petition No.270/1996 was filed. On
14/2/1996, an Order was passed by this Court directing deposit of
amount by the Petitioner which was to be paid to National Association
for Blind from the proceeds of the concert. On 26/2/1996, the other
Writ Petition was admitted and it was observed that the cancellation
of exemption granted was prima facie illegal and hence the ad
interim order was granted restraining the Collector from taking any
further steps. National Association for Blinds (Respondent No.5) was
permitted to withdraw the amount deposited in the Court. On
26/2/1996, the Writ Petition was admitted. In view of the interim
relief granted in Writ Petition No. 116/1996, no further interim relief
was ordered in other matter. In February 1996, Affidavit of Under
Secretary, Social Welfare and Cultural Department was filed. On
15/12/2008, an Affidavit of the Entertainment Duty Officer on behalf
of the Collector was also filed.
10 The Bombay Entertainments Duty Act, 1923 provides a
charging section, i.e. section 3, as under:
“There shall be levied and paid to the State Government
on all payments for admission to any entertainment duty
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a duty (hereinafter referred to as ‘entertainment duty’)
at the following rates …..”
Sections 6 of the Act as read and referred by the Counsel
for their respective submissions are reproduced as under :
Section 6 of the Act :
“6 (1) Entertainments duty shall not be levied on
payments for the admission to any entertainment
where, in the case of any area for which a
Commissioner of Police has been appointed, the
Commissioner of Police or elsewhere, the District
Magistrate, is satisfied that
(a) the whole of the takings thereof are devoted to
philanthropic or charitable purposes without any
charge on the takings for any expenses of the
entertainment; or
(b) the entertainment is of a wholly educational
character; or
(c ) the entertainment is provided partly for
educational or partly for scientific purposes by a
society, institution or committee not conducted or
established for profit.
(2) Where the Commissioner of Police or the District
Magistrate, as the case may be, is satisfied that the
whole of the net proceeds of an entertainment are
devoted to philanthropic or charitable purposes, and
that the whole of the expenses of the entertainment do
not exceed twenty per cent of the receipts, the amount
of the entertainments duty paid in respect of the
entertainment shall be refunded to the proprietor.
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(3) The State Government may, by general or special
order, exempt any entertainment or class of
entertainments from liability to entertainments, duty,
subject to such terms and conditions, if any, as may be
specified in the order.”
Rule 25 of The Bombay Entertainments Duty Rules, 1958 is as under :
“ 25 Applications for exemption under Section 6(3)
: All applications for exemption under subsection
(3) of Section 6 of the Act shall be made to the
prescribed officer not later than ten days before the
date of the entertainment. An application for
exemption not presented within such period may,
unless sufficient cause shown for not making the
application within ten days as aforesaid, be rejected.”
11 The Petitioner's senior counsel crystalised submissions are
as under :
“(1) That the exemption granted from payment of
entertainment duty for the concert of Bon Jovi held by
the Petitioner for the benefit of Respondent No.5 –
National Association for Blinds was on the basis of the
Government Resolutions which automatically grant
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general exemption from entertainment duty and
surcharge in respect of class of events.
(2) That the exemption was not on the basis of
charitable nature of the Petitioner or any organization
or any condition attached to the exemption order.
(3) The exemption, therefore, was not granted on
the basis of any alleged premise or representation and,
therefore, there was no question of suppression of any
material facts or misrepresentation.
(4) The exemption order granted has been revoked
by order dated 9/5/1995 without hearing the
Petitioner and in complete breach of principles of
natural justice.
(5) That the order dated 25/9/1995 passed by the
Collector is for recovery of the entertainment duty and
surcharge on the basis of cancellation order 9/5/1995
which was in breach of natural justice.
(5) That the amount of entertainment duty and
surcharge demanded of Rs.89,92,000/ is on an
imaginary and hypothetical assessment and without
any material particulars.”
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12 The learned AGP has resisted the above submission by
referring to Section 6(3) of the Act and Rule 25, submitted that even if
there are general exemptions, still for claiming the exemption, as
contemplated under the law, a specific Application is a must and,
therefore, the submission referring to the general exemptions itself is
not sufficient to accept the case of Petitioners.
13 After going through the provisions so reproduced above
and the plain reading of the Section makes the position very clear,
that ultimately it is for the State to decide and grant the general
and/or special exemption. In the present case, as noted, the general
exemptions were granted by the State at the relevant time to such
joint show/programme organised by the Petitioners. There was no
issue with regard to the nature of the programme and the fact that it
falls within the ambit of exemption so provided in the Circulars. After
considering the submission and reading even Sections 3 & 6 and Rule
25,we see there is no such mandate to this extent that even though
there was a general exemption granted by the State,the concerned
party still need to apply for the special exemption under subsection
(3) of Section 6 of the Act. In this case,the exemption was granted before
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the Show. We are not concerned with the other general
permission/licence and or intimations which are required under the
other provisions of law.
14 Admittedly, the Petitioner in WP/116/1996 had applied
for exemption and it was granted by the specific order. The same was
revoked without giving any show cause notice, hearing and apart from
that, without any reasons. The revocation was after the date of the
programme. The position was that the State, on the Application filed,
had granted the permission after considering the case. The
show/programme was conducted accordingly. However, abruptly the
exemption was revoked. This action is against the basic principles of
natural justice and even the settled law. The allegations of
misrepresentation and/or fraud, if any, itself require due show cause
notice with specific particulars and its details. There was no such
communication prior in point of time.
15 The Collector, thereafter proceeded to recover the amount
stated to be due on various undetailed data and material and the basic
of amount so unilaterally calculated and for the first time reasons
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reflected in the impugned judgment for the same. In the present
case, the controversy, even if any, with regard to the exemption
application so filed by the National Association for the Blind and not
by the Petitioner (Conveyer/organiser) as the specific claim/case was
about the general exemption so referred. There was no need of
making such separate application for special exemption also.
16 The order/judgment passed by the Collector nowhere
dealt with the facet that the Petitioner/organiser failed to apply as per
Rule 25 as sought to be contended by the learned AGP and, therefore,
they have decided to take this action for revocation and the recovery.
We have noted the reasons in the judgment that revolve around the
Application filed by the Petitioner/National Association for Blind. The
programme was actually conducted by the organiser/Petitioner. The
Judgment is based upon the reasons of misdirection and/or mis
representation. It is difficult for any organiser to recover such duty
and the surcharge from any consumer/audience, once the tickets are
sold, on the basis of exemption already granted. The duty/surcharge
could not have charged by the Petitioners in view of the specific
exemption under the law.
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17 This is one of the case where, though it is a question of
revenue, but if the provision of law is clear, no tax and/or revenue
could have been collected by any Department, unless it is the
requirement of the law. They were exempted from the liability under
the Act. The demand so raised in such fashion, in our view, was
unsustainable. Apart from that, the way in which the action was
initiated and the demand so raised as recorded above is against the
basic principles of natural justice and even the settled provisions of
law.
18 We have also noted that, the Department, while initiating
the recovery proceedings, gave reasons for the first time in the
Judgmentwhy they have taken action against the Petitioners of
revocation of the exemption so granted. There was no justification
and reasons placed on record on the date of issuance of action of
revocation. At the stage of recovery only, the department gave
justification, without giving opportunity to the party concerned at the
relevant time. This approach is also unsustainable. The Supreme
Court in Mohinder Singh Gill v. The Chief Election Commissioner, New
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1
has recorded in para 8 as under:
Delhi ,
“8. The second equally relevant matter is that when a
statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so
mentioned and cannot be supplemented by fresh
reasons in the shape of affidavit or otherwise.
Otherwise, an order bad in the beginning may, by the
time it comes to court on account of a challenge, get
validated by additional grounds later brought out. We
may here draw attention to the observations of Bose J.
in Gordhandas Bhanji A.I.T. .
Public orders, publicly made, in exercise of a statutory
authority cannot be construed in the light of
explanations subsequently given by the officer making
the order of what he meant, or of what was in his
mind, or what he intended to do. Public orders made
by public authorities are meant to have public effect
and are intended to effect the acting and conduct of
those to whom they are addressed and must be
construed objectively with reference to the language
used in the order itself.
Orders are not like old wine becoming better as they
grow older :
A Caveat.”
19 This Court, after hearing both the parties on 26 February,
1996 itself, in Writ Petition by Respondent No.5(National Association
for the Blind) after taking note of the background, granted the stay to
the recovery proceedings so initiated by observing that “the
Respondents are directed not to recover the amount on the basis of
1 AIR 1978 SC 851
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impugned order”. Therefore, till this date, no recovery proceedings
could be proceeded by the Respondents. The Division Bench, in
support of above, has observed in para 7, as under :
“7 Prima facie, it appears that the Order passed by
the State Government is illegal. Exemption was
granted to the National Association for the Blind
without any conditions. There were no restrictions
imposed that the show was to be organised by the
National Association for the Blind itself. Exemption
was also granted by exercising the powers under
section 6(3) and not under section 6(1) or 6(2). It is
th
also admitted that the Show was organised on 26
April 1995 and thereafter, the impugned order dated
th
9 May 1995 was issued. If such orders are passed,
after the Show is organised, it would cause irreparable
loss to the Association to which exemption is granted.”
We are in agreement with above observations also, apart from the
reasons in other paragraphs. The amount is with Respondent No.5,
for the purpose for which the Show was conducted. No case to
recover the said amount or demand such amount after Show is over.
20 Therefore, taking overall view of the matter, we are
inclined to allow both the Writ Petitions, in the facts and
circumstances of the case as recorded above, in terms of prayer (B) of
Writ Petition No. 270 of 1996 quoted above and which cover both the
cases.
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21 Rule made absolute accordingly in both the Petitions.
22 There shall be no order as to costs.
(A. S. GADKARI, J.) (ANOOP V. MOHTA, J.)
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 270 OF 1996
Maneck Davar, carrying business as sole
proprietor in the name and style of
Spenta Multimedia of Bombay Indian
Inhabitant, having his office at
nd
Newspaper House, 2 Floor, Sasson
Docks, Colaba, Bombay 400 005 .... Petitioner
vs
1 State of Maharashtra,
2 Secretary, Government of Maharashtra,
Cultural Affairs Department, Mantralaya,
Ministry of Cultural Affairs & Sports,
Bombay 400 032
3 Collector, Bombay Suburban District,
having his office at BMRDA Building,
th
4 Floor, Bandra (East), Bombay 400051
4 Recovery Officer,
having his office at Customs House,
Bombay 400 023
5 National Association for The Blind,
having its office at Jehangir Wadia
Building, 51, Mahatma Gandhi Road,
Fort, Bombay 400 023
6 Dinu Gandhi, of Bombay Indian
Inhabitant ViceChairman Programme
Committee for National Association for The Blind,
having its office at Jehangir Wadia
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Building, 51, Mahatma Gandhi Road,
Fort, Bombay 400 023 .... Respondent
ALONG WITH
WRIT PETITION NO. 116 OF 1996
1 National Association for The Blind,
having its office at Jehangir Wadia
Building, 51, Mahatma Gandhi Road,
Fort, Bombay 400 023
2 Dinoo V. Gandhi, of Bombay, Indian
Inhabitant, ViceChairman, Programme
Committee, National Association for The Blind,
Finance Raising Committee, residing at
2223, Franclin Apartment,
Pali Mala Road, Pali Hill, Bandra,
Bombay 400 050 ….. Petitioners
vs.
1 The Collector, Bombay Suburban District,
Entertainment Branch,
having his office at BMRDA Building,
nd
2 Floor, Bandra (East), Bombay 400051
2 State of Maharashtra,
through the Govt. Pleader,
High Court, Bombay
3 Mr. Maneck Davar, of
Spenta Multi Media
having his office at
nd
Newspaper House, 2 Floor, Sasson
Docks, Colaba, Bombay 400 005
4 Collector of Bombay, having
his office at Old Custom House,
Bombay 400 001 …. Respondents
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Dr. Milind Sathe, Senior Advocate i/by M/s. Prakash & Co for the
petitioner in WP/270/1996 and for Respondent No.3 in
WP/116/1996.
Mr. A.I. Patel, Addl. G.P. for respondent/State in both matters.
CORAM: ANOOP V. MOHTA AND
A. S. GADKARI, JJ.
DATE : December 22, 2016
ORAL JUDGMENT (Per Anoop V. Mohta, J.) :
Called out from final hearing board.
2 Both the Petitioners have challenged the common
orders/action initiated by the State of Maharashtra (the State),
through their respective Departments. The following prayers are
made in Writ Petition No.270/1996:
“(A) That this Hon'ble court be pleased to declare
th
that the performance held on 26 April 1995 at
Andheri Sports Complex by foreign music group
Bon Jovi as exempt from payment of
entertainment duty and surcharge in view of the
rd nd
Notification dated 23 October 1972, 22
th th
November 1973, 4 January 1994 and 30 July
1977 issued under the provisions of the Bombay
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Entertainment Duty Act and the Rules, 1923
framed thereunder.
(B) calling for the records and proceedings of
the Petitioner case pertaining to the impugned
th th
orders dated 9 May 1995, 25 September 1995,
th st th
13 October 1995, 21 November 1995 and 8
January 1996. (Exhibits – J, W, Z, CC and DD
respectively hereto) and after going into the
legality and propriety thereof, be pleased to quash
and set aside the same.”
The events and related common, legal issues are relevant
for adjudication of the writ petitions.
3 In 1958, The then Bombay Government under section 7 of
the Bombay Entertainment Duty Act (the Act) made Rules known as
“Bombay Entertainment Duty Rules, 1958” (the Rules). The Rules
provide for grant of exemption from payment of entertainment duty
by issuing Notifications. On 24/5/1959, a Government Resolution
was passed providing for exemption to foreign music / orchestra from
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the payment of entertainment duty. On 23/10/1972, it was clarified
that “A doubt has been raised whether the phrase ‘originating in India’
did not cover foreign amateur artists who were residing in India for
reasons merely participating in dramatic performances.”. The clarified
that Indian dramatic performances originating in India should also
include foreign amateur artist including tourist who are residing India
for reasons other than participating in dramatic performances and
making financial benefits for themselves and dramas performed by
such foreign amateur artist should be exempted from the liability to
pay entertainment duty. On 27/11/1973, further Government
Resolution issued, inter alia , providing that all performances of music
(classical, light and instrumental) and classical and folk dancing from
western and eastern countries should be exempted from liability to
pay entertainment duty. On 4/1/1974, a clarification was sought as
to whether beat music should be included within the scope of the
previous order where ball dancing and cabaret dancing are also
involved. The Government clarified that while beat music should be
included within the scope of these exemption orders, but ball dancing
and cabaret dancing are not covered by these orders for the purpose
of general exemption from the liability to pay entertainment duty
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under the Act. The Government further clarified that performances of
music (classical, light and instrumental) and classical and folk dancing
from western and eastern countries would be taxed if they include
even one single small item of ball dancing and cabaret dancing.
4 On 30/7/1977, the Government issued a Resolution
dealing with the levy of surcharge in respect of entertainment
permanently exempted from payment of entertainment duty under
Section 6 (3) of the Act. The Government directed that surcharge
levied under Section 3 AA of the Act was not to be collected on the
following firms of entertainment from the date of issue of this
Resolution:
“…
(n) All performance of music (classical, light and instrumental) and
classical and folk dancing from Western and Eastern countries.
(o) Beat Music. But performances of music (classical, light and
instrumental) and classical and folk dancing from Western and Eastern
countries would be taxed if they include even one single small item of
Ball Dancing and/or Cabaret Dancing .”
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5 On 6/3/1995, the Petitioner (W. P./270/1996) addressed
a letter to Respondent No.5 delineating the proposal and the approved
outlines of the proposed programme. On 17/4/1995, the Petitioner
informed Respondent No.5 that they were organising a performance
by an International rock group “Bon Jovi” in late April 1995 and as the
Group was keen on performing for charity. They suggested the name
of Respondent No.5. On 24/4/1995, the Additional Collector, Bombay
Suburban District informed Respondent Nos.5 and 6 that the Music
Show proposed would attract the entertainment duty and surcharge.
Petitioner thereupon made a formal representation to the Secretary,
Cultural Affairs, Government of Maharashtra. On 25/4/1995,
Respondent No.5 (National Association of Blind) addressed a letter
seeking exemption from the payment of entertainment duty and
surcharge. On 25/4/1995, An order was passed by the Social Welfare
Cultural Affairs and Sports Department exempting the Music Show
from payment of entertainment tax and surcharge. The order refers to
three Government Resolutions dated 23/10/1972, 4/1/1973 and
30/7/1977 passed by Social Welfare Cultural Affairs, Sports and
Tourism Department. On 26/4/1995, the Music Show was held
accordingly.
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6 On 5/5/1995, the Petitioner made a complaint to the Joint
Commissioner of Police, Greater Bombay Shri M.N. Singh, as he
apprehended that certain people who had entered the Andheri Sports
Complex i.e. the venue of the music show without tickets or on the
basis of forged tickets. On 9/5/1995, the Deputy Secretary, of the
State withdrew the exemption as granted on 26/4/1995. On
15/5/1995, Respondent Nos.5 and 6 made a representation against
the unilateral cancellation of exemption. On 21/05/1995, the
Petitioner addressed a letter to the Deputy Commissioner of Police,
inter alia, complaining about the forged tickets. On 30/5/1995, the
Petitioner once again requested the Deputy Commissioner of Police
(Crime Branch) to carry out investigation. On 6/6/1995 and
15/6/1995, the Collector, BSD called upon Respondent Nos.5 and 6 to
forward necessary documents and other details / particulars asked for
therein with regard to the Music Show. On 12/7/1995, the Petitioner
forwarded to Respondents the particulars of expenses incurred for the
Music Show and all other particulars. Respondent No.5 sought
further particulars and the Petitioner supplied it. On 17/8/1995, a
notice was sent by the office of the Collector, BSD to
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Respondent Nos.5 and 6 calling upon them to pay the entertainment
duty with surcharge of Rs.69,72,000/ and Rs.20,00,000/
respectively totalling to Rs.89,92,000/. On 16/8/1995, Respondent
No.5 addressed a letter to the Collector, BSD. On 22/8/1995,
Respondent No.5 also addressed a similar letter to the Petitioner
requesting him to send audited statement of accounts. On
31/8/1995, the Petitioner was summoned to the office of the Collector
and his statement was recorded. On 31/8/1995, Petitioner handed
over audited statement of accounts.
7 On 28/9/1995, the Collector, BSD directed that an amount
of Rs. 89,92,300/ as entertainment duty and surcharge, be recovered
jointly and severally from the Petitioner and Respondent No.5 as
arrears of land revenue. On 12/10/1995, the Petitioner addressed a
letter to Deputy Commissioner of Police, Crime Branch, Economic
Offences, requesting to investigate the matter on urgent basis. On
13/10/1995, Respondent No.5 addressed a letter to the Hon’ble
Minister for Cultural Affairs forwarding him copy of Income –
Expenditure Accounts and requesting him to look into the matter and
do the needful. On 13/10/1995, Letter addressed by the Collector,
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BSD calling upon the Petitioner to make payment of alleged duty of
Rs.89,92,000/ with surcharge, failing which the same will be
recovered as arrears of land revenue. On 18/10/1995, the Petitioner
through his Advocate addressed a letter to the Collector, BSD drawing
the attention of the Collector to the Resolutions exempting the
performance of Music from payment of entertainment duty and
surcharge. Copy of the letter was sent to the Secretary, Government of
Maharashtra, Social Welfare Department. On 16/11/1995,
Respondent No.5 addressed a reply to the Collector through their
Advocates. On 21/11/1995, Notice was sent to the Petitioner by the
Recovery Officer making a claim of payment of the alleged duty
arrears and threatening the Petitioner with attachment for recovery of
the same. On 8/1/1996, again a notice was sent to the Petitioner by
the Recovery Officer.
8 On 17/1/1996, Respondent No.5 filed Writ Petition No.
116 of 1996, challenging some of the orders. On 24.1.1996 and
5/2/1996, the Petitioner sought details of exemption for other similar
shows from the State Department.
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9 On 7/2/1996, writ petition No.270/1996 was filed. On
14/2/1996, an Order was passed by this Court directing deposit of
amount by the Petitioner which was to be paid to National Association
for Blind from the proceeds of the concert. On 26/2/1996, the other
Writ Petition was admitted and it was observed that the cancellation
of exemption granted was prima facie illegal and hence the ad
interim order was granted restraining the Collector from taking any
further steps. National Association for Blinds (Respondent No.5) was
permitted to withdraw the amount deposited in the Court. On
26/2/1996, the Writ Petition was admitted. In view of the interim
relief granted in Writ Petition No. 116/1996, no further interim relief
was ordered in other matter. In February 1996, Affidavit of Under
Secretary, Social Welfare and Cultural Department was filed. On
15/12/2008, an Affidavit of the Entertainment Duty Officer on behalf
of the Collector was also filed.
10 The Bombay Entertainments Duty Act, 1923 provides a
charging section, i.e. section 3, as under:
“There shall be levied and paid to the State Government
on all payments for admission to any entertainment duty
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a duty (hereinafter referred to as ‘entertainment duty’)
at the following rates …..”
Sections 6 of the Act as read and referred by the Counsel
for their respective submissions are reproduced as under :
Section 6 of the Act :
“6 (1) Entertainments duty shall not be levied on
payments for the admission to any entertainment
where, in the case of any area for which a
Commissioner of Police has been appointed, the
Commissioner of Police or elsewhere, the District
Magistrate, is satisfied that
(a) the whole of the takings thereof are devoted to
philanthropic or charitable purposes without any
charge on the takings for any expenses of the
entertainment; or
(b) the entertainment is of a wholly educational
character; or
(c ) the entertainment is provided partly for
educational or partly for scientific purposes by a
society, institution or committee not conducted or
established for profit.
(2) Where the Commissioner of Police or the District
Magistrate, as the case may be, is satisfied that the
whole of the net proceeds of an entertainment are
devoted to philanthropic or charitable purposes, and
that the whole of the expenses of the entertainment do
not exceed twenty per cent of the receipts, the amount
of the entertainments duty paid in respect of the
entertainment shall be refunded to the proprietor.
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(3) The State Government may, by general or special
order, exempt any entertainment or class of
entertainments from liability to entertainments, duty,
subject to such terms and conditions, if any, as may be
specified in the order.”
Rule 25 of The Bombay Entertainments Duty Rules, 1958 is as under :
“ 25 Applications for exemption under Section 6(3)
: All applications for exemption under subsection
(3) of Section 6 of the Act shall be made to the
prescribed officer not later than ten days before the
date of the entertainment. An application for
exemption not presented within such period may,
unless sufficient cause shown for not making the
application within ten days as aforesaid, be rejected.”
11 The Petitioner's senior counsel crystalised submissions are
as under :
“(1) That the exemption granted from payment of
entertainment duty for the concert of Bon Jovi held by
the Petitioner for the benefit of Respondent No.5 –
National Association for Blinds was on the basis of the
Government Resolutions which automatically grant
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general exemption from entertainment duty and
surcharge in respect of class of events.
(2) That the exemption was not on the basis of
charitable nature of the Petitioner or any organization
or any condition attached to the exemption order.
(3) The exemption, therefore, was not granted on
the basis of any alleged premise or representation and,
therefore, there was no question of suppression of any
material facts or misrepresentation.
(4) The exemption order granted has been revoked
by order dated 9/5/1995 without hearing the
Petitioner and in complete breach of principles of
natural justice.
(5) That the order dated 25/9/1995 passed by the
Collector is for recovery of the entertainment duty and
surcharge on the basis of cancellation order 9/5/1995
which was in breach of natural justice.
(5) That the amount of entertainment duty and
surcharge demanded of Rs.89,92,000/ is on an
imaginary and hypothetical assessment and without
any material particulars.”
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12 The learned AGP has resisted the above submission by
referring to Section 6(3) of the Act and Rule 25, submitted that even if
there are general exemptions, still for claiming the exemption, as
contemplated under the law, a specific Application is a must and,
therefore, the submission referring to the general exemptions itself is
not sufficient to accept the case of Petitioners.
13 After going through the provisions so reproduced above
and the plain reading of the Section makes the position very clear,
that ultimately it is for the State to decide and grant the general
and/or special exemption. In the present case, as noted, the general
exemptions were granted by the State at the relevant time to such
joint show/programme organised by the Petitioners. There was no
issue with regard to the nature of the programme and the fact that it
falls within the ambit of exemption so provided in the Circulars. After
considering the submission and reading even Sections 3 & 6 and Rule
25,we see there is no such mandate to this extent that even though
there was a general exemption granted by the State,the concerned
party still need to apply for the special exemption under subsection
(3) of Section 6 of the Act. In this case,the exemption was granted before
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the Show. We are not concerned with the other general
permission/licence and or intimations which are required under the
other provisions of law.
14 Admittedly, the Petitioner in WP/116/1996 had applied
for exemption and it was granted by the specific order. The same was
revoked without giving any show cause notice, hearing and apart from
that, without any reasons. The revocation was after the date of the
programme. The position was that the State, on the Application filed,
had granted the permission after considering the case. The
show/programme was conducted accordingly. However, abruptly the
exemption was revoked. This action is against the basic principles of
natural justice and even the settled law. The allegations of
misrepresentation and/or fraud, if any, itself require due show cause
notice with specific particulars and its details. There was no such
communication prior in point of time.
15 The Collector, thereafter proceeded to recover the amount
stated to be due on various undetailed data and material and the basic
of amount so unilaterally calculated and for the first time reasons
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reflected in the impugned judgment for the same. In the present
case, the controversy, even if any, with regard to the exemption
application so filed by the National Association for the Blind and not
by the Petitioner (Conveyer/organiser) as the specific claim/case was
about the general exemption so referred. There was no need of
making such separate application for special exemption also.
16 The order/judgment passed by the Collector nowhere
dealt with the facet that the Petitioner/organiser failed to apply as per
Rule 25 as sought to be contended by the learned AGP and, therefore,
they have decided to take this action for revocation and the recovery.
We have noted the reasons in the judgment that revolve around the
Application filed by the Petitioner/National Association for Blind. The
programme was actually conducted by the organiser/Petitioner. The
Judgment is based upon the reasons of misdirection and/or mis
representation. It is difficult for any organiser to recover such duty
and the surcharge from any consumer/audience, once the tickets are
sold, on the basis of exemption already granted. The duty/surcharge
could not have charged by the Petitioners in view of the specific
exemption under the law.
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17 This is one of the case where, though it is a question of
revenue, but if the provision of law is clear, no tax and/or revenue
could have been collected by any Department, unless it is the
requirement of the law. They were exempted from the liability under
the Act. The demand so raised in such fashion, in our view, was
unsustainable. Apart from that, the way in which the action was
initiated and the demand so raised as recorded above is against the
basic principles of natural justice and even the settled provisions of
law.
18 We have also noted that, the Department, while initiating
the recovery proceedings, gave reasons for the first time in the
Judgmentwhy they have taken action against the Petitioners of
revocation of the exemption so granted. There was no justification
and reasons placed on record on the date of issuance of action of
revocation. At the stage of recovery only, the department gave
justification, without giving opportunity to the party concerned at the
relevant time. This approach is also unsustainable. The Supreme
Court in Mohinder Singh Gill v. The Chief Election Commissioner, New
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1
has recorded in para 8 as under:
Delhi ,
“8. The second equally relevant matter is that when a
statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so
mentioned and cannot be supplemented by fresh
reasons in the shape of affidavit or otherwise.
Otherwise, an order bad in the beginning may, by the
time it comes to court on account of a challenge, get
validated by additional grounds later brought out. We
may here draw attention to the observations of Bose J.
in Gordhandas Bhanji A.I.T. .
Public orders, publicly made, in exercise of a statutory
authority cannot be construed in the light of
explanations subsequently given by the officer making
the order of what he meant, or of what was in his
mind, or what he intended to do. Public orders made
by public authorities are meant to have public effect
and are intended to effect the acting and conduct of
those to whom they are addressed and must be
construed objectively with reference to the language
used in the order itself.
Orders are not like old wine becoming better as they
grow older :
A Caveat.”
19 This Court, after hearing both the parties on 26 February,
1996 itself, in Writ Petition by Respondent No.5(National Association
for the Blind) after taking note of the background, granted the stay to
the recovery proceedings so initiated by observing that “the
Respondents are directed not to recover the amount on the basis of
1 AIR 1978 SC 851
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impugned order”. Therefore, till this date, no recovery proceedings
could be proceeded by the Respondents. The Division Bench, in
support of above, has observed in para 7, as under :
“7 Prima facie, it appears that the Order passed by
the State Government is illegal. Exemption was
granted to the National Association for the Blind
without any conditions. There were no restrictions
imposed that the show was to be organised by the
National Association for the Blind itself. Exemption
was also granted by exercising the powers under
section 6(3) and not under section 6(1) or 6(2). It is
th
also admitted that the Show was organised on 26
April 1995 and thereafter, the impugned order dated
th
9 May 1995 was issued. If such orders are passed,
after the Show is organised, it would cause irreparable
loss to the Association to which exemption is granted.”
We are in agreement with above observations also, apart from the
reasons in other paragraphs. The amount is with Respondent No.5,
for the purpose for which the Show was conducted. No case to
recover the said amount or demand such amount after Show is over.
20 Therefore, taking overall view of the matter, we are
inclined to allow both the Writ Petitions, in the facts and
circumstances of the case as recorded above, in terms of prayer (B) of
Writ Petition No. 270 of 1996 quoted above and which cover both the
cases.
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21 Rule made absolute accordingly in both the Petitions.
22 There shall be no order as to costs.
(A. S. GADKARI, J.) (ANOOP V. MOHTA, J.)
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