IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY, THE TWENTY SEVENTH DAY OF AUGUST TWO THOUSAND AND TEN PRESENT THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR CIVIL REVISION PETITION Nos.1085 and 1089 of 2008 BETWEEN: M/s. Sri Lakshmi Rama Picture House. ... PETITIONER AND The Entertainment Tax Officer – II, Gudiwada, Krishna District. ...RESPONDENT Counsel for the Petitioner : MR. P. GIRISH KUMAR Counsel for the Respondent: SPL. GP FOR TAXES The Court made the following: COMMON ORDER: The petitioner/assessee under the Andhra Pradesh Entertainments Tax Act, 1939 (for short ‘the Act’) questions the order of the Entertainment Tax Appellate Deputy Commissioner (CT), Vijayawada dated 29.03.2007 passed in Appeal Nos.VJA-I/95/06-07 and VJA-I/96/06-07. The said appeals as well as these revisions cover two different assessment years i.e. 1998-1999 and 1999-2000. 2. The question involved is very elaborately argued by the learned counsel for the petitioner by contending that Section 5(6)(d) of the Act, as it stood, is applicable on the date of show cause notice to pay the revised tax i.e. 28.04.2001. According to the learned Government Pleader the power exercised by the Entertainment Tax Officer is referable to Section 9(4) read with Section 4 of the Act. 3. The show cause notice dated 28.04.2001 was given to the petitioner by the Entertainment Tax Officer with reference to permitting to pay the tax for the aforesaid two years in Form – II issued on 22.04.1998 and 01.04.1999 respectively fixing the entertainment tax at Rs.241/- per show for the year 1998- 1999 and Rs.252/- per show for the year 1999-2000. It appears that the audit authorities objected to the said fixation of entertainment tax and later the Entertainment Tax Officer gave the aforesaid show cause notice to the petitioner claiming that tax should have been fixed at Rs.428/- and Rs.432/- for the respective years and proposed to vary the quantum of tax fixed in the permit. The show cause notice contained a table of the entertainment tax actually levied and proposed to be levied and the quantum of short levied tax. The petitioner filed a brief reply dated 30.05.2001 stating that the petitioner was given permit and it was already worked out during the relevant years. Later the Entertainment Tax Officer passed final order dated 20.02.2004 in Rc.F.2/5/98 demanding the deficit entertainment tax of Rs.52,949/- and Rs.58,910/- for the respective years. The said order was challenged by the petitioner in appeals for the respective years before the Appellate Deputy Commissioner, which have been dismissed under the orders referred to above. Aggrieved thereby, the present revisions are filed. 4. Mr. P. Girish Kumar, learned counsel for the petitioner, has raised several contentions including the jurisdiction of the Entertainment Tax Officer to vary the permit and the entertainment tax was fixed on the basis of the audit report. He relies upon the order of the Entertainment Tax Officer, which specifically states in the opening paragraph that the deficit fixation of entertainment tax in the permit was pointed by the Accountant General (AP), Hyderabad audit party. He also submits that a Division Bench judgment of this Court in STATE OF AP v. RATNASREE BOX MAKERS[1] considered similar provisions under the APGST Act whether the assessing authority had power to assess the escaped turnover and the corresponding tax if it was found that the tax was levied at a rate lower than the correct rate. He points out that the exercise by the assessing officer under the APGST Act based upon the opinion of the audit party was held to be impermissible by the Division Bench and the said judgment has been followed by another Division Bench in STATE OF AP v. KEDIA VANSAPATI (P) LTD[2] and also in GIRDHARLAL & COMPANY v. STATE OF AP[3]; WESTERN INDIA GUNNIES PVT. LTD. v. STATE OF AP[4] and KANAKADURGA MANURE WORKS v. STATE OF AP[5]. 5. Learned counsel submitted that the order of the Entertainment Tax Officer passed, in the first instance, on 20.02.2004 covered two aspects viz. the rate at which the entertainment tax per show was fixed during each of the assessment years and the same was revised under the said order. The order also dealt with grant of 50% concession on tax paid in terms of G.O.Ms.No.380 Revenue (CT.III) Department dated 03.06.1998 where second run or repeated run Telugu pictures are screened and the Entertainment Tax Officer found that the petitioner has failed to comply with the conditions of the aforesaid GO and disallowed the concession, which was earlier granted. Learned counsel also states that to the extent of the second part; the show cause notice did not contain any averment whatsoever and the petitioner was under the impression that the said show cause notice only deals with proposed revision of entertainment tax in the permit alone. Learned counsel also pointed out that if there was an opportunity to the petitioner, he would have easily satisfied the respondent that the concession granted under the GO aforesaid was justified. He also pointed out that the petitioner filed a detailed representation before the Entertainment Tax Officer under his reply dated 28.06.2004 together with compliance of the conditions of the GO aforesaid. However, by endorsement of the Entertainment Tax Officer dated 16.07.2004 the said representation of the petitioner was not considered since by then already the order dated 20.02.2004 were passed against the petitioner. He has once again raised the self-same contentions before the appellate authority but concurring with the opinion expressed by the primary authority i.e. Entertainment Tax Officer, the appeals were dismissed. Learned counsel, therefore, submits that the exercise of varying the permit on both grounds is unjustified and liable to be set aside. 6. Learned Government Pleader with equal vehemence submits that the order passed by the Division Bench in RATNASREE BOX MAKERS’s case (1 supra) and the subsequent judgments following the same were specifically declared by the Honourable Supreme Court as no longer good law and has cited the judgment in STATE OF AP v. RATNASREE BOX MAKERS[6] where the Supreme Court has held as follows: “In view of the fact that the proprietor of the respondent – company has since died, we do not think that we can interfere with the matter. However, the view expressed by the learned Judge of the High Court in the matter is clearly illegal and it is not a good law. The S.L.P. is accordingly disposed of.” It is also pointed that a similar view as expressed by the Division Bench above was also taken by another Division Bench in SWAMY THEATRE v. DY. COMMERCIAL TAX OFFICER, HYDERABAD[7] but the same was not approved by the Supreme Court by reversing the said Division Bench judgment vide judgment of the Supreme Court in ENTERTAINMENT TAX OFFICER, MADHAPUR CIRCLE, HYDERABAD v. GEETA ENTERPRISES[8]. 7. Learned Government Pleader submits that the show cause notice proposing to vary the permit was issued in conformity with the power of the Entertainment Tax Officer under Section 4 of the Act and the same is also referable to similar provision under Section 9-A of the Act and in any case, even if Section 5(6)(d) of the Act is assumed to be applicable, the Entertainment Tax Officer was well within his jurisdiction to correct the erroneous fixation of rate of tax. So far as the objection of the petitioner relating to non issue of show cause notice with regard to alleged violation of the aforesaid GO is concerned, the learned Government Pleader states that the table given in the notice fully explains that part as well and as such, the petitioner having not filed any explanation regarding the same, the impugned orders are justified. 8. In reply, the learned counsel for the petitioner relies upon a Division Bench judgment of the Delhi High Court in KRISHNA ENTERPRISES v. COMMISSIONER OF SALES TAX[9] wherein similar view as expressed by the Division Benches of this Court was also expressed by the Division Bench of the Delhi High Court and several decisions of the Supreme Court were relied upon. Learned counsel, therefore, says that merely because audit party has objected the assessing authority cannot change its opinion and give notice for revision of the permit under Form – II. 9. I have considered the contentions, as above and they have been extracted in detail, as above, for the purpose of crystallization of the respective contentions. While the legal position would depend upon the power under which the Entertainment Tax Officer had proposed to vary the permit, under the Act the power to revise the assessment including best judgment under Section 9-A of the Act is in addition to the power to vary the amount of tax payable by the proprietor specifically provided under Section 5(6)(d) of the Act. There are divergent contentions on behalf of both the parties on the relevant provision applicable and prima facie, it appears that the said power is referable to Section 5(6) of the Act. It is, however, not necessary to decide the said aspect in view of the order proposed to be made keeping in view the specific contention of the learned counsel for the petitioner that to the extent of alleged violation of G.O.Ms.No.380 dated 03.06.1998, referred to above, the show cause notice is silent and do not call upon the petitioner to explain the said aspect. A reading of the notice dated 28.04.2001 clearly shows that it is with reference to only the fixation of entertainment tax and not relating to the concession availed by the petitioner under the aforesaid GO. However, the final order passed shows that the said concession already allowed to the petitioner was taken away on the ground that petitioner failed to produce the documents and failed to establish the compliance of the conditions of the GO. In my view, the said concession could not have been taken away from the petitioner in the manner aforesaid when the same specifically does not form part of the show cause notice asking the petitioner to explain the circumstances. 10. Further, to the extent of reduction of tax also petitioner’s contention that even that part under the impugned order is not justified in view of the fact that the period for which the said permit was granted had long expired and at this distance of time, after three years, it would be impossible for the petitioner to recover any components of entertainment tax relevant for the aforesaid years, as the shows have already been held. Learned counsel also points out that no assessment order is made by the assessing authority for the said relevant years and even now the said aspect can be considered by the Entertainment Tax Officer. 11. Keeping in view all these circumstances, referred to above, I am of the view that the petitioner has been put to prejudice by the deficiency in the show cause notice with respect to the concessions granted to the petitioner under the aforesaid GO, which were sought to be withdrawn under the impugned order of Entertainment Tax Officer as confirmed by the appellate authority. Further, in view of the fact that petitioner’s subsequent explanation together with documents dated 28.06.2004 having rendered unentertainable by the Entertainment Tax Officer, as he had already passed the final order dated 20.02.2004, in the interest of justice and fair play, I deem it appropriate that the petitioner be granted one opportunity to explain the circumstances appearing against him, as is evident from the impugned order of the Entertainment Tax Officer viz. the grounds on which the variation is sought to be made in the permit. 12. The impugned order of the Entertainment Tax Officer and the consequential order of the appellate authority are, therefore, set aside and the matter is remitted back to the Entertainment Tax Officer – II, Gudiwada for fresh consideration. The petitioner shall treat the impugned order dated 28.04.2001, proposed revision, as show cause notice and shall file a detailed explanation together with documents within four (4) weeks from today and the Entertainment Tax Officer shall thereafter pass appropriate orders, in accordance with law, after considering the said explanation. The contentions of both parties, as raised herein, are kept open and they are at liberty to agitate their contentions before the Entertainment Tax Officer. The civil revision petitions are accordingly allowed remitting the matter, as above. There shall be no order as to costs. _____________________ VILAS V. AFZULPURKAR, J August 27, 2010 Note: Office to despatch the copy of the order along with records, if any, within one week. (B/o) DSK [1] (1989) 75 STC 82 (AP) [2] (1994) 95 STC 208 (AP) [3] (1995) 97 STC 442 (AP) [4] (2003) 133 STC 14 (AP) [5] (2003) 133 STC 147 (AP) [6] (1999) 29 APSTJ 221 (SC) [7] (1992) 15 APSTJ 63 [8] (2009) 49 APSTJ 59 (SC) [9] (2005) 140 STC 148 (DELHI)