# Rajendra Pratap Singh v. State of U.P. & Ors

- **Citation:** (2023) 2 ILRA 1083
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-01-18
- **Case number:** Writ Tax No. 194 of 2022
- **Bench:** Rajesh Bindal, C.J. J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/rajendra-pratap-singh-v-state-of-u-p-ors-49701
- **Pages:** 8

## Headnote

C.S.C., Sri Nimai Dass (Additional Chief
Standing Counsel), Sri Apurva Hajela
(Standing Counsel)

Uttar
Pradesh
Cinematograph
Rules,
1951-Claim of subsidiary grant after setting
up a cinema hall in rural area was rejected
and
recovery
notice
issued-impugnedPetitioner claim subsidiary grant as per
government scheme dated 21 July, 1986-
merely because Petitioner had moved an
application for grant of license within the
period specified will not entitle him of the
benefit when pre-requisites have not been
fulfilled-license is granted merely to run the
cinema hall-does not ipsofacto entitle to avail
the scheme-instead conditions laid down have
to be fulfilled.

W.P. dismissed. (E-9)

List of Cases cited:

## Text

2 All. Rajendra Pratap Singh Vs. State of U.P. & Ors.
1083
(2023) 2 ILRA 1083
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.01.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE J.J. MUNIR, J.

Writ Tax No. 194 of 2022

Rajendra Pratap Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Shambhu Chopra (Sr. Advocate), Ms.
Mahima Jaiswal, Sri Rakesh Kumar Tripathi,
Ms. Anupama Tripathi

Counsel for the Respondents:
C.S.C., Sri Nimai Dass (Additional Chief
Standing Counsel), Sri Apurva Hajela
(Standing Counsel)

Uttar
Pradesh
Cinematograph
Rules,
1951-Claim of subsidiary grant after setting
up a cinema hall in rural area was rejected
and
recovery
notice
issued-impugnedPetitioner claim subsidiary grant as per
government scheme dated 21 July, 1986-
merely because Petitioner had moved an
application for grant of license within the
period specified will not entitle him of the
benefit when pre-requisites have not been
fulfilled-license is granted merely to run the
cinema hall-does not ipsofacto entitle to avail
the scheme-instead conditions laid down have
to be fulfilled.

W.P. dismissed. (E-9)

List of Cases cited:

1. Commissioner of Customs (Import), Mumbai
Vs M/s Dilip Kumar & Com. & ors. (2018)9 SCC
1

2. Sun Export Corporation. Vs Collector of
Customs (1997) 6 SCC 564
3. Kanai Lal Sur Vs Paramnidhi Sadhukhan, AIR
1957 SC 907

(Delivered by Hon'ble Rajesh Bindal, C.J.
&
Hon'ble J.J. Munir, J.)

1. The present writ petition has been
filed praying for quashing of an order dated
July 13, 2021 passed by the Joint Secretary,
State Tax Department, U.P., Annexure-1 to
the writ petition, vide which the claim of
the petitioner for providing subsidiary grant
after he had set up a cinema hall in rural
area was rejected. Further challenge has
been made to recovery notice dated August
24,
2021
issued
by
Assistant
Commissioner,
Trade
Tax,
Chandauli,
Anneuxre-27 to the writ petition. Further, a
direction has been sought to respondent
No.1 to provide subsidiary grant to the
petitioner with reference to the period
mentioned in the scheme dated July 21,
1986.

2. Mr. Shambhu Chopra, learned
Senior
Advocate
appearing
for
the
petitioner submitted that the Government
had come out with a scheme dated July 21,
1986 (hereinafter referred to as the
"Scheme") pertaining to setting up of new
permanent
cinema
halls.
Under
the
Scheme, such cinema halls, for first year,
were to be paid subsidiary grant equal to
100% of the amount of entertainment tax
payable with regard to the movie exhibited.
Thereafter, for second and third year they
were to be paid equal to 74% and 50% of
the entertainment tax, respectively. The
idea was to promote setting up of more
means of entertainment in the rural areas,
for which the Scheme was meant. One of
the clause of the Scheme provided that
benefit
will
be
available
to
any
entrepreneur, who applies for licence to run
1084 INDIAN LAW REPORTS ALLAHABAD SERIES
a cinema hall between January 1, 1984 to
March 31, 1990. In the case in hand, the
petitioner had applied for licence on
February 26, 1990. Mr. Chopra submitted
that the case of the petitioner having been
recommended by the different authorities
keeping in view the fact that the Scheme
was an exercise of the State for grant of
certain benefits, liberal construction was
required but still despite his repeated
attempts the benefit was not granted to him.
The petitioner had set up the cinema hall
relying upon the Scheme.

3. Mr. Chopra, learned Senior
Advocate further contended that licence
was granted to the petitioner under the
Uttar Pradesh Cinematograph Rules, 1951
(hereinafter referred to as the "Rules") for
running the cinema hall from February 21,
1991 and any delay in the process was in
the hands of the respondents, which was
beyond the control of the petitioner. He
further submitted that before passing the
impugned order, no opportunity of hearing
was afforded to the petitioner despite
earlier order passed by this Court, as a
result of which he was unable to present his
case before the authority concerned for
proper consideration.

4. The contention has also been raised
that the Scheme does not provide anywhere
that construction of the cinema hall has to
be completed upto March 31, 1990, as it
only provided filing of an application for
grant of licence to run the cinema hall,
which the petitioner had filed. The licence
was granted to him on February 21, 1991,
which clearly establishes that the petitioner
had fulfilled all the conditions laid down
for the purpose. The issue sought to be
raised in the present petition is to the
decision making process adopted by the
State, which should have been fair. Any
decision taken after following due process
has to be examined thereafter on merit. He
further referred to certain examples where,
according to the petitioner, benefits of the
Scheme
have
been
granted
to
the
entrepreneurs, who had set up the cinema
hall in similar circumstances.

5. On the other hand, stand taken by
the learned counsel for the respondents is
that due opportunity was granted to the
petitioner to respond to the notice issued.
The reply filed by the petitioner was duly
considered. The Scheme clearly provides
that application for grant of licence should
have been filed between January 1, 1984 to
March 31, 1990. In terms of the provisions
of the Rules, such an application can be
filed only after fulfilment of certain
conditions. In the case in hand, the building
of cinema hall was still under construction
when the petitioner applied for the licence,
as evident from the facts mentioned in the
impugned order. At the time of inspection,
number of discrepancies were found and
the certificates/documents required to be
annexed by
the petitioner
with
the
application were lacking. Merely because
the petitioner has been granted licence to
run the cinema hall on February 21, 1991,
will not mean that he would be entitled to
get the benefits under the Scheme, as he
does not fulfil the conditions laid down
therein. Any such scheme has to be
interpreted strictly. It is not a case where
there was any delay on the part of the
respondents, rather the petitioner just with a
view to avail benefits under the Scheme,
had filed application for grant of licence
under the Rules to run the cinema hall even
before construction thereof. It was so found
in the inspection made by the respondents.

6. With reference to the argument
regarding discriminatory treatment to the
2 All. Rajendra Pratap Singh Vs. State of U.P. & Ors.
1085
petitioner, he submitted that the aforesaid
argument is not available to the petitioner
for the reason that he cannot raise a plea of
negative discrimination in Court.

7. Heard learned counsel for the
parties and perused the record.

8. The issue arises with reference to a
communication of the Government dated
July 21, 1986 referred to as the Scheme. It
was circulated by the Government to
encourage setting up of new permanent
cinema halls in the rural areas, which has
reference to an scheme earlier issued by the
Government on September 17, 1983. As
certain
difficulties
were
noticed
in
implementation thereof, fresh Scheme was
issued. It providied for subsidiary grant
equal
to
100%
of
the
amount
of
entertainment tax payable with regard to
the movie exhibited. Thereafter, for second
and third year they were to be paid equal to
74% and 50% of the entertainment tax,
respectively. The condition was also laid
down that aforesaid grant shall be paid to
new permanent cinema halls constructed
under the Scheme. The Scheme also
provided that application for grant of
licence under the Rules to run the cinema
hall has to be made between January 1,
1984 to March 31, 1990. Certain other
conditions were also laid down in the
Scheme, which are not required to be
referred to in detail for the reason that legal
issue required to be considered in the
present petition does not hinge on that. It is
not a case where there is any procedural
error, rather it is a case where very
eligibility of the petitioner to receive
benefits under the Scheme is the core
question.

9. As per Clause 4 of the Scheme to
avail
of
the
benefits
therein,
an
application for grant of licence under the
Rules has to be filed between January 1,
1984 to March 31, 1990. It is admitted
case that such an application was filed on
February 26, 1990. However, in terms of
Rule 4 of the Rules, an application for
grant of licence to run a cinema hall is
required to be accompanied with certain
documents, which are as follows:

"(a) The order or approval of
plan under Rule 3(1);

(b) Plan of the building and
premises containing the specification
enumerated in sub-rule (2) of Rule 3;

(c) Plan of seating arrangements
for each class, separately;

(d)
Certificate
from
the
Electrical Inspector to Government that
the electrical installations conform to the
required standards and the existing rules;

(e) Certificate from the Medical
Officer of Health having jurisdiction that
the arrangements for sanitation conform
to the requirements of the existing rules;
and

(f) Certificate from the Regional
Fire Officer having jurisdiction that the
arrangements for fire-fighting appliances
provided and the precautions taken
against fire conform to the requirements
of the existing rules."

10. As the final cut off date in the
Scheme for being eligible to avail of the
benefits was March 31, 1990, as is
evident
from
the
impugned
communication, an inspection was carried
out
by
the Assistant
Entertainment
Commissioner, Varanasi on April 1, 1990
and following discrepancies were found:

"(i) The construction work of
walls and rooms of the cinema building has
been completed.
1086 INDIAN LAW REPORTS ALLAHABAD SERIES

(ii) Inside the auditorium 3/4 part
of work has been completed and the rest is
in progress. 7 angles (dSapk) for roof have
been installed and tin shades for 4 rows of
roof have been installed and these are yet to
be installed for the two.

(iii)
The
stage
has
been
completed, but the screen has not been
installed nor has the projector been
installed in cabin nor has the work of
foundation been found in progress. No
seat has been laid in any room of balcony
and ground floor in auditorium. Six doors
have been installed but the flaps are to be
fixed. The work of flooring of hall is in
progress. The work of dumping soil in
auditorium
and
veranda
has
been
completed, plastering is to be done.

(iv) There is no electric fan and
fire-fighting equipment in the auditorium,
it was said to be kept in a room.

(v) Plastering work outside the
hall is underway. Levelling work of outer
open
space
remains
incomplete.
Boundary is not constructed."

11. In the inspection report, it has
also been mentioned by the Inspecting
Officer that at the time of the inspection,
the film exhibition was not in a condition
to be started. Thereafter on January 9,
1991, the spot inspection of the cinema
hall was again conducted by the Assistant
Entertainment
Tax
Commissioner
wherein
the
following
shortcomings/defects were found:

"a.
The
ventilation
flow
exhausters have not been installed to let
out the smoke emitted from the machines
in the projection room. The same be
installed.

b. There is no door fixed in the
female toilet and urinals built near the
balcony. The same be fixed.

c. The way leading to the
rewinding
room
passes
through
the
projection room though as per rules, it
should be out of the projection room."

12.

The
aforesaid
reports
of
inspection clearly establish the fact that the
date on which the petitioner filed the
application for grant of licence or on the
last date as provided under the Scheme,
even the basic infrastructure was not
complete and the petitioner did not have
requisite permission on the basis of which
licence to run cinema hall could be issued.

13. Merely because the petitioner had
moved an application for grant of licence
within the period specified under the
Scheme will not entitle him to avail of the
benefits under the Scheme when the prerequisites for grant of licence have not been
fulfilled.

14. The argument that grant of licence
to the petitioner on February 21, 1991
under the Rules clearly establishes that the
petitioner is entitled to the benefits under
the Scheme is totally misconceived. Two
issues are sought to be mixed up. Grant of
licence is merely to run the cinema hall. It
does not ipso facto entitle the petitioner to
avail of benefits as are provided for under
the Scheme, as for availing of the benefits
under the Scheme, the conditions laid down
therein are also to be fulfilled.

15. As far as the other argument of the
learned counsel for the petitioner are
concerned, they are also only to be noticed
and rejected. All the issues sought to be
raised by the petitioner even before this
Court, have been duly dealt with in the
impugned
order.
We
have
afforded
opportunity of hearing to the petitioner to
make out his case. We do not wish to
2 All. Rajendra Pratap Singh Vs. State of U.P. & Ors.
1087
relegate the petitioner as earlier also he had
filed a writ petition. Merely because his
case
was
recommended
on
wrong
presumption of various clauses in the
Scheme, will not entitle the petitioner to
claim benefits to which he is not entitled, as
not fulfilling the conditions laid down
therein.

16. As far as liberal construction of
Scheme being beneficial is concerned, the
argument deserves to be rejected, as all the
conditions laid down in the Scheme have to
be strictly fulfilled to avail of the benefits
therein.

17.

The
question
as
to
the
interpretation tools to be applied while
interpreting
a
tax
exemption
provision/notification, when there is an
ambiguity as regards its applicability or
entitlement of the assessee, was referred to
be considered by a Constitution Bench of
Hon'ble
the
Supreme
Court
in
Commissioner of Customs (Import),
Mumbai v. M/s Dilip Kumar and
Company and others (2018)9 SCC 1.
Paras 1 and 2 of the aforesaid judgment
throw light on the issues examined by the
Constitution Bench of Hon'ble the Supreme
Court. These read as under:

"1. This Constitution Bench is set
up to examine the correctness of the ratio in
Sun Export Corporation. v. Collector of
Customs (1997) 6 SCC 564 (hereinafter
referred to as ''Sun Export case', for
brevity), namely, the question is -- What is
the interpretative rule to be applied while
interpreting
a
tax
exemption
provision/notification when there is an
ambiguity as to its applicability with
reference to the entitlement of the assessee
or the rate of tax to be applied?

2. In Sun Export case (supra), a
three-Judge Bench ruled that an ambiguity
in a tax exemption provision or notification
must be interpreted so as to favour the
assessee claiming the benefit of such
exemption. Such a rule was doubted when
this appeal was placed before a Bench of
two Judges. The matter then went before a
three Judge Bench consisting one of us
(Ranjan Gogoi, J.). The three-Judge Bench
having noticed the unsatisfactory state of
law as it stands today, opined that the dicta
in Sun Export case (supra), requires
reconsideration and that is how the matter
has been placed before this Constitution
Bench."

18. It was further observed in the
aforesaid judgment that when the words in
a statute are clear, plain and unambiguous
and only one meaning can be inferred, the
Courts are bound to give effect to the said
meaning irrespective of the consequences
thereof. Paras 21, 22 and 23 thereof are
extracted below:

"21. The well-settled principle is
that when the words in a statute are clear,
plain and unambiguous and only one
meaning can be inferred, the courts are
bound to give effect to the said meaning
irrespective of consequences. If the words
in the statute are plain and unambiguous, it
becomes necessary to expound those words
in their natural and ordinary sense. The
words used declare the intention of the
legislature.

22.
In
Kanai
Lal
Sur
v.
Paramnidhi Sadhukhan, AIR 1957 SC 907,
it was held that if the words used are
capable of one construction only then it
would not be open to the courts to adopt
any other hypothetical construction on the
ground that such construction is more
1088 INDIAN LAW REPORTS ALLAHABAD SERIES
consistent with the alleged object and
policy of the Act.

23. In applying rule of plain
meaning any hardship and inconvenience
cannot be the basis to alter the meaning to
the language employed by the legislation.
This is especially so in fiscal statutes and
penal statutes. Nevertheless, if the plain
language results in absurdity, the court is
entitled to determine the meaning of the
word in the context in which it is used
keeping in view the legislative purpose.
Not only that, if the plain construction
leads to anomaly and absurdity, the court
having
regard
to
the
hardship
and
consequences that flow from such a
provision can even explain the true
intention
of
the
legislation.
Having
observed general principles applicable to
statutory interpretation, it is now time to
consider rules of interpretation with respect
to taxation."

19. In para 29 of the aforesaid
judgment
it
was
opined
that
strict
interpretation of a statute certainly involves
literal or plain meaning test. The other tools
of interpretation, namely contextual or
purposive interpretation cannot be applied
nor any resort is made to look to other
supporting material, especially in taxation
statutes. It is well-settled that in a taxation
statute,
there
is
no
room
for
any
intendment. Regard has to be given to the
clear meaning of the words and the matter
has to be governed wholly by the language
used therein. Equity has no place. Para 29
thereof is extracted below:

"29. We are not suggesting that
literal rule dehors the strict interpretation
nor one should ignore to ascertain the
interplay between "strict interpretation" and
"literal interpretation". We may reiterate at
the
cost
of
repetition
that
strict
interpretation of a statute certainly involves
literal or plain meaning test. The other tools
of interpretation, namely, contextual or
purposive interpretation cannot be applied
nor any resort be made to look to other
supporting material, especially in taxation
statutes. Indeed, it is well settled that in a
taxation statute, there is no room for any
intendment; that regard must be had to the
clear meaning of the words and that the
matter should be governed wholly by the
language of the notification. Equity has no
place in interpretation of a tax statute.
Strictly one has to look to the language
used; there is no room for searching
intendment nor drawing any presumption.
Furthermore, nothing has to be read into
nor should anything be implied other than
essential inferences while considering a
taxation statute."

20. The discussion in Para 55 in the
judgment regarding the stages at which rule
of strict interpretation is to be applied and
in case of ambiguity the beneficiary
thereof, are quite relevant for consideration
of the point in issue in the present writ
petition. It was opined that at the stage of
taxing a subject, in case of ambiguity the
benefit goes to the subject whereas in case
of ambiguity in exemption provision the
benefit goes to the revenue. Para 55 is
extracted below:

"55.
There
is
abundant
jurisprudential justification for this. In
the governance of rule of law by a written
Constitution, there is no implied power of
taxation.
The
tax
power
must
be
specifically conferred and it should be
strictly in accordance with the power so
endowed by the Constitution itself. It is
for this reason that the courts insist upon
strict compliance before a State demands
and extracts money from its citizens
2 All. Rajendra Pratap Singh Vs. State of U.P. & Ors.
1089
towards various taxes. Any ambiguity in
a
taxation
provision,
therefore,
is
interpreted
in
favour
of
the
subject/assessee. The statement of law
that ambiguity in a taxation statute should
be interpreted strictly and in the event of
ambiguity the benefit should go to the
subject/assessee may warrant visualising
different situations. For instance, if there
is ambiguity in the subject of tax, that is
to say, who are the persons or things
liable to pay tax, and whether the
Revenue
has
established
conditions
before raising and justifying a demand.
Similar is the case in roping all persons
within the tax net, in which event the
State is to prove the liability of the
persons, as may arise within the strict
language of the law. There cannot be any
implied concept either in identifying the
subject of the tax or person liable to pay
tax. That is why it is often said that
subject is not to be taxed, unless the
words of the statute unambiguously
impose a tax on him, that one has to look
merely at the words clearly stated and
that there is no room for any intendment
nor presumption as to tax. It is only the
letter of the law and not the spirit of the
law to guide the interpreter to decide the
liability to tax ignoring any amount of
hardship
and
eschewing
equity
in
taxation. Thus, we may emphatically
reiterate that if in the event of ambiguity
in a taxation liability statute, the benefit
should go to the subject/assessee. But, in
a situation where the tax exemption has
to be interpreted, the benefit of doubt
should go in favour of the Revenue, the
aforesaid conclusions are expounded only
as
a
prelude
to
better
understand
jurisprudential basis for our conclusion.
We may now consider the decisions
which support our view." (emphasis
supplied)

21. After elaborate discussions on
all the issues, the reference to the
Constitution Bench was answering in the
following terms:

"66. To sum up, we answer the
reference holding as under:

66.1.
Exemption
notification
should be interpreted strictly; the burden
of proving applicability would be on the
assessee to show that his case comes
within the parameters of the exemption
clause or exemption notification.

66.2. When there is ambiguity
in exemption notification which is
subject to strict interpretation, the
benefit of such ambiguity cannot be
claimed by the subject/assessee and it
must be interpreted in favour of the
Revenue.

66.3. The ratio in Sun Export
case (supra) is not correct and all the
decisions which took similar view as in
Sun Export case (supra) stands overruled."

22. It has been authoritatively held
in the aforesaid judgment of Hon'ble the
Supreme
Court
that
exemption
notifications are to be interpreted strictly
and the burden to prove that an assessee
falls within the four corners of exemption
notification lies on him. If the facts of the
case in hand are examined in that light,
the petitioner has not been able to prove
that he is eligible to avail the benefits as
provided for under the Scheme, as he had
not fulfilled the conditions laid down
therein.

23. For the reasons mentioned above,
we do not find any merit in the present writ
petition.
The
same
is,
accordingly,
dismissed.
----------
1090 INDIAN LAW REPORTS ALLAHABAD SERIES
(2023) 2 ILRA 1090
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 06.02.2023

BEFORE

THE HON'BLE RAJESH BINDAL, C.J.
THE HON'BLE ALOK MATHUR, J.

Writ Tax No. 208 of 2017

Principal Commissioner of Income Tax
(Central) ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Manish Mishra, Advocate

Counsel for the Respondents:
Sri D.D. Chopra and Sri S.B. Pandey Senior
Advocates with Sri Shishir Chandra and
Shailesh Verma, Advocates

Civil Law - Income Tax Act, 1961Commission proceeded on application of the
assesses- settled the matter rejecting the
objections
raised
by
the
Income
tax
Department vide impugned order-Further the
Settlement Commission proceeded at the
behest of only two of the applicant to rectify
the order u/s 245 D (6B) of the Income Tax
Act, 1961-Manipulation by the respondents
and the two assesses who were not before
the Commission but were part of search
seizure operation is evident-benefits -manner
in
which
commission
proceeded
is
questionable.

The Commission contrary to the settled legal
position has illegally and arbitrarily reviewed its
order-impugned order quashed.

W.P. allowed. (E-9)

List of Cases cited:

1. Commissioner of Income Tax Vs Anjum M. H.
Ghaswala & ors., (2002) 1 SCC 633

2. Jyotendrasinhji Vs S.I. Tripathi & ors., 1993
Supp.(3) SCC 389 at page 399

3. Ajmera Housing Corporation & anr. Vs
Commissioner of Income Tax (2010) 8 SCC 739

4. Anjum M.H. Ghaswala & ors.' case (supra)
and the other

5. Brij Lal & ors. Vs Commissioner of Income
Tax, Jalandhar, (2011) 1 SCC 1

(Delivered by Hon'ble Alok Mathur, J.)

1. The Principal Commissioner of
Income Tax
(Central),
Lucknow has
approached this Court by means of the
present Writ Petition assailing the orders of
the Income Tax Settlement Commission
(hereinafter referred to as Commission)
dated 19/22.08.2016 and 17.02.2017.

2. The brief facts of the case are that a
search and seizure was conducted on
31.07.2013 on different premises of 5
persons, namely, (1) Dr A. K. Sachan, (2)
Ms. Richa Mishra, (3) Shekhar Chief
Justice's Court Serial No. 34 2 WRIT TAX
No. 208 of 2017 Hospital (P) Ltd, (4) Shri
Balaji Charitable Trust and (5) M/s Hind
Charitable Trust. During the search cash of
₹1,76,94,500/- was seized1,76,94,500/- was
seized from the residential premises and
from
the
office
rooms
of
the
Dr
A.K.Sachan and Ms Richa Mishra. At the
time of the search one of the assessee Ms.
Richa Mishra surrendered ₹1,76,94,500/-
was seized 8.00 crores as undisclosed
income as under: -

Table-

1.
Ms. Richa Mishra
5.00 crores
2.
Shri Balaji Charitable Trust
1.50 crores
3.
Shekhar Hospital (P) Ltd.
1.50 crores