IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 3653 of 1991 For Approval and Signature:
HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA HONOURABLE MR.JUSTICE J.B.PARDIWALA ========================================== =============== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question of law as 4 to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================== =============== RAMESHCHANDRA K KADIA & 1 - Petitioner(s) Versus STATE OF GUJARAT & 3 - Respondent(s) ========================================== =============== Appearance :
MR MB GANDHI for Petitioner(s) : 1 - 2.MRS TRUSHA M GANDHI for Petitioner(s) : 1 - 2. MS SHRUTI PATHAK, ASSTT.GOVERNMENT PLEADER for Respondent(s) : 1 - 4.
========================================== =============== HONOURABLE THE ACTING CHIEF JUSTICE CORAM :
MR.BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date :30/04/2012 CAV JUDGMENT (Per : HONOURABLE MR. JUSTICE J.B.PARDIWALA) By way of this writ application under Article 226 of the Constitution of India, the writ-petitioner, an owner of a cinema,
(A) Be pleased to issue a writ of mandamus and a writ of certiorari and/or any other appropriate writ, direction and order quashing and setting aside the annexures "B", "E" and "F";
(B) Pending hearing and final disposal of the writ petition, be pleased to grant ad-interim relief staying the implementation, operation and effectuation or recovery on the basis of the orders annexures "B", "C" and "F";
(C) That an ex-parte ad-interim relief in terms of paragraph 8 B hereinabove may please be awarded to the petitioner;
2. The facts relevant for the purpose of deciding this petition may be summarised thus:
2.1 The Deputy Collector, Modassa Division paid a surprise visit to the cinema hall of the petitioner on 10.10.1988. During his visit, it is alleged that he found various irregularities in the cinema. After taking note of the irregularities, the Deputy Collector sent a report in this regard to the Collector of Entertainment Tax, for taking necessary action. The Collector, Sabarkantha vide his letter dated 5.11.1988, directed the Mamlatdar-cum-Prescribed Officer - respondent No.4 herein, to initiate action against the petitioner under the provisions of Section 9(1) and (9(3) of the Gujarat Entertainment Tax Act, 1977 (for short "the Act"). The Mamlatdar-cum-Prescribed Officer issued a show cause notice dated 28.3.1989 alleging inter-alia that (1) 50 spectators in balcony were allowed to sit without tickets and had collected cash amounts from them; (2) that petitioner was hesitating to put his signature in the statement made before the Deputy Collector, Modasa during inspection of the cinema house; and (3) necessary records in relation to inspection were not furnished during the inspection in spite of having presence of Shri Rajubhai, Manager of the cinema house and thereby caused obstacles in checking; and (4) Accounts in form No.17 were not filled up during inspection. It was further alleged that he had reason to believe that assessment on the tickets which are liable to be assessed for entertainment tax for the period from 18.1.1988 to 10.10.1888, was not made.
2.2 The Mamlatdar-cum-Prescribed Officer under the Act finally passed an order dated 31.7.1989, holding that on the date of inspection 50 spectators in the balcony were found watching the movie without tickets and therefore, the petitioner was liable to be assessed under Section 9(1) of the Act. The Mamlatdar-cum-Prescribed Officer passed an order, the relevant portion of which reads as under:-
"........It appears reasonable to make re-assessment for 30 days for the cinema proprietor. Therefore, reassessment is made prior to 30 days of 10.10.88 i.e. from 11.9.88 to 10.10.88. The capacity of the balcony seats are of 240 spectators, the rates of ticket is Rs. 5/-
i.e. the entertainment tax per ticket comes to Rs. 2.50ps. According to the total capacity of the entire house, the tax per one show comes to Rs. 600/- per day. By presuming that the proprietor would have allowed more spectators in the second show, I decide and hold that the reassessment for the second show for 30 days is made to Rs. 18,000/- (Rupees eighteen thousand only) u/s 9(1) of the Gujarat Entertainment Tax Act and one and half of the penalty of reassessment amount to the tune of Rs. 27,000/- (Rupees twenty seven thousand), in all Rs. 45,000/- (Rupees forty five thousand) be recovered. The proprietor should deposit the said amount within thirty days from receipt of this order in the Government Treasury in "0045 OTD" head, failing which the said amount shall be treated as land revenue due u/s 14 of the aforesaid Act and interest at 24% shall be recovered on the said assessed amount."
2.3 Being aggrieved and dissatisfied by the order passed by the Mamlatdar-cum-Prescribed Officer, Modassa, the petitioner preferred appeal under Section 12 of the Act before the Entertainment Tax Collector. The appeal was heard by the Entertainment Tax Collector and vide order dated 30th June, 1990, partly allowed the appeal. The final conclusion reached by the Entertainment Tax Collector as per the order, is as under:-
....The assessment is made by presuming that on the date of inspection, in the one show only 50 spectators were allowed without collecting tickets and entry taxes, and as against it, the Mamlatdar and Prescribed Officer, Modassa took into consideration total capacity of balcony seats in 30 days, and allowed the spectators in the second show of one month without ticket and thereby assessment is made. The cinema proprietor has given information with respect to sale of the tickets according to form 17 from 9.9.88 to 10.10.88. Taking into consideration and looking to the fact that the cinema proprietor has issued tickets in the second show, the assessment is made by the Mamlatdar in his order dated 31.7.1989 for the second show, for total 240 seats for 30 days and as it is partially liable to be confirmed.
Without ticket, spectators cannot be allowed in the cinema house. Irrespective of filling up form 17, it is obligatory to issue tickets. Therefore, as it is proper in the interest of justice to issue tickets for total 120 spectators in place of 240 seats, as per the order of the Mamlatdar, the following assessment is made:
It is ordered that for 120 spectators, per Rs. 5/- for entry tax for the period from 11.9.88 to 10.1.1988 for balcony class, at Rs. 2.50 ps. entry tax per ticket, Rs. 9,000/- for one month and Rs. 13,500/- u/s 9(3), in all Rs. 22,500/- be recovered and with the aforesaid amendment, the order of the Mamlatdar, Modassa, is confirmed."
2.4 The petitioner thereafter preferred Revision Application under Section 13 of the Act before the Commissioner, Entertainment Tax, Gujarat State. The Entertainment Tax Commissioner, Gujarat State, Gandhinagar, vide order dated 30th March, 1991, rejected the Revision Application confirming the order passed by the Entertainment Tax Collector, Sabarkantha.
2.5 It is at this stage that the petitioner thought fit to approach this Court by way of this writ-application seeking to challenge the orders passed by the authorities below.
Contentions of the petitioner:
3. Mr. M.B. Gandhi, learned counsel appearing for the petitioner vehemently submitted that the impugned orders under challenge are erroneous and contrary to the evidence on record. According to Mr. Gandhi, the authorities below have discriminated the petitioner, inasmuch as identically situated persons running such cinema house have been dealt with very lightly by imposing penalty of a very meager amount. According to Mr. Gandhi, under Section 9(3) of the Act, penalty can be imposed only after the re-assessment is made and not before re-assessment. Sub-section (3) of Section 9 of the Act clearly states that in making any assessment or re-assessment under sub-section (1) as the Prescribed Officer may, if he satisfied that due to wilful mis-statement or suppression of fact by the proprietor the tax has not been levied or has been levied at a lower rate than the rate at which it is leviable, direct the proprietor to pay an addition to the tax assessment or re-assessment under Section 9(1) and the proviso to sub- section (3) clearly states that no penalty under this Section shall be imposed unless the proprietor affected is being given a reasonable opportunity of showing cause against such imposition.
4. The main bone of contention as raised by Mr. Gandhi is that the entire enquiry conducted against the petitioner is not only tainted with malafides, but can be termed as in flagrant violation of the principles of natural justice. According to Mr. Gandhi, neither the Mamlatdar-cum-Prescribed Officer, nor the Collector permitted the petitioner to cross-examine the persons whose statements were recorded, to the effect that tickets were not issued to them. According to Mr. Gandhi, a bare look at the statement would suggest that except the name of the person, there is no other detail worth the name so as to identify a particular person. The manner in which the statements have been recorded does not inspire confidence worth the name. Mr. Gandhi contended that even the copies of the statements of such persons were not supplied though requested. According to Mr. Gandhi, in a quasi-judicial proceedings it is necessary to supply all the documents relied upon for the purpose of a fair and impartial enquiry and an enquiry cannot be conducted at the back of the person. Mr. Gandhi submitted that a specific ground to this effect was taken before the Commissioner, but the Commissioner also has turned a blind eye to this patent irregularity in the conduct of the enquiry going to the root of the matter.
Contentions of respondent:
5. Learned AGP Ms. Shruti Pathak appearing for the respondents submitted that the orders are passed on findings of facts recorded by the adjudicating authority and re- appreciated and confirmed by the appellate and revisional authority. She submitted that this Court, in exercise of writ jurisdiction, may not undertake re-appreciation of evidence and may not disturb the findings of fact which have been arrived at by the Appellate and Revisional authority, more so when it is supported by evidence and the conclusions cannot be said to be perverse. Ms. Pathak went to the extent of submitting that this petition in substance is a petition under Article 227 of the Constitution as three authorities below have looked into the matter and thereafter the matter has reached before this Court. Ms. Pathak submitted that as all the issues raised in this petition have been taken care of by the authorities below, this Court in exercise of the supervisory jurisdiction under Article 227 of the Constitution of India may not disturb the findings. Ms. Pathak submitted that in a summary enquiry of the present nature, there is no question of giving any opportunity of cross-
examination to the petitioner. According to Ms. Pathak, there is no such legal obligation for giving an opportunity of cross- examining the persons whose statements have been recorded. Ms. Pathak submitted that the enquiry, which was conducted can be said to be fair, impartial and in accordance with law. She submitted that there is no merit in this petition and the same deserves to be rejected.
Analysis:
6. Having heard learned counsel for the respective parties and having gone through the materials on record, the picture that emerges is that the petitioner herein is the proprietor of the cinema known as "Apsara Cinema" situated in the city of Modassa of Dist. Sabarkantha. On 10.10.1988, a surprise visit was undertaken by the Deputy Collector of Modassa Division of the theater in question. At that point of time second show of a movie "Johni Mera Nam" was in progress. As per the case of the respondents, upon verification it was found that 50 spectators in the balcony were allowed to sit without tickets and the amount was collected from such spectators. The case set up by the authorities is that money was collected for watching the film but tickets were not actually issued with the sole intention of evading entertainment tax. Manifold contentions have been raised by the petitioner as regards violation of certain provisions of the Act as well as the Rules, but what has appealed to us is the serious complaint of the petitioner so far as the manner, the method and the mode in which the entire enquiry was conducted. We have noticed that the entire case is based on few statements of the persons said to have been watching the film without tickets on that particular day, recorded by the Deputy Collector and other officers. We have noticed that in the statements, except the name and the age and the name of the town, there is no other detail on the basis of which a person can be identified. When the petitioner right from the beginning requested the authorities that he may be permitted to cross-examine such persons whose statements have been recorded, then in that case this opportunity ought to have been given to the petitioner as a part of the principles of natural justice. There are serious allegations levelled by the petitioner that as a matter of fact, some of the persons are not even existing while statements of some of the persons are such who were actually not even present on that particular day in the theater. This could have been verified only if the petitioner would have been given an opportunity of cross-examining such witnesses. Apart from rule of audi-alteram partem, one of the facets of principles of natural justice is fairness. A statutory authority under the law is duty bound to act fairly and not to the detriment of the interest of the person proceeded against. We have noticed that even the highest authority, namely the Commissioner has over-looked this aspect. A specific ground to this effect has been taken in the memo of the revision application and even in the notes of argument, but very conveniently it seems to have been over-looked. The statements which have been recorded have been perused by us. Some of the statements are to the effect that they have actually not paid the price for the ticket because the owner is known to them i.e. the petitioner herein, whereas some of the statements are that money was paid to the door keeper, but the tickets have not been issued. On perusal of the statements we find that none of the statements inspire confidence and the entire enquiry seems to have been conducted in a slipshod manner.
7. We have noticed that in the appeal memo specific ground was taken up that the Prescribed Officer has not allowed cross- examination of the checking staff, persons who are alleged to be found in the auditorium without ticket etc. though requested. We are of the view that since heavy reliance has been placed by the authorities on the statements of the persons who were said to have been watching the film on that particular date without tickets, the authorities ought to have given an opportunity of cross-examining such persons and also by providing the statements which were recorded in writing. Since there is a serious lapse in the conduct of the entire enquiry and proceedings, it is difficult for us to accept the contention of Ms. Pathak, learned AGP that this Court may not interfere as the orders are passed on findings of fact recorded by the adjudicating authority and re-appreciated and confirmed by the appellate and revisional authority.
8. We accordingly, for the reasons stated aforesaid, allow this petition. SCA No. 3653 of 1991 is hereby allowed. Order passed by the Mamlatdar-cum-Prescribed Officer dated 31.7.1989 - Annexure "B", order passed by the Collector dated 6.7.1990 - Annexure "E" and the order passed by the Commissioner, Entertainment Tax dated 30.3.1991 - Annexure "F" to the petition, are hereby quashed and set aside. Rule is made absolute with no order as to costs.
(Bhaskar Bhattacharya, Actg. C.J.) (J.B. Pardiwala, J.) */Mohandas