# {.JiA STATE OF MAHARASHTRA & ORS v. SWANSTONE MULTIPLEX CINEMA (P) LTD

- **Citation:** [2009] 11 S.C.R. 378
- **Court:** Supreme Court of India
- **Decided:** 2009-07-27
- **Case number:** Civil Appeal No. 4718 of 2009
- **Bench:** S.B. Sinha, Deepak Verma
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jia-state-of-maharashtra-ors-v-swanstone-multiplex-cinema-p-ltd-25055
- **Pages:** 30

## Headnote

,..,
BOMBAY ENTERTAINMENT DUTY ACT, 1923:
,.:l
c
SS.2(d), 3(1), 3(13) - Entertainment duty- Exemption -
Multiplex theatre complex - Collecting entertainment duty
and retaining the same though it was exempt from
entertainment duty - Held: Entertainment duty is a tax - High
Court was not justified in holding that State Government
D conferred upon the theatre the retention benefit - When a
person collects tax illegally it has to refund it to tax payers -
If tax payers cannot be found, court would either direct the
~
same to be paid to and/or appropriated by the State -
·
Supreme Court may, in exercise of its jurisdiction under
E
Article 142 of the Constitution, issue suitable directions -
State shall realize the amount from the theatre to the extent
it had unjustly enriched itself and pay the same to a voluntary
or charitable organization - Doctrine of unjust enrichment -
Constitution of India, 1950 - Article 142.
j,
F
The respondent, a company engaged in the business
of screening of films in its multiplex theatre complex, was
liable to pay duty under the Bombay Entertainment Duty
Act, 1923 @ 45% of payment for admission. The State of
Maharashtra provided exemption in the matter of
G payment of entertainment duty. The respondent availed
~\~
of the said exemption. It, was, however, detected that
during the period for which the respondent was not liable
to pay any duty or was required to pay duty @ 25% only,
it realized the entire duty. The appellants issued a Notice
H
378
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
379
MULTIPLEX CINEMA (P) LTD .
.... )-
to the respondent demanding 75% of the entertainment A
tax reflected by the respondent on its tickets for the period
between 24.6.05 and 22.9.05 amounting to Rs.1,16,95,846
and a further notice dated 21st January, 2006 demanding
Rs.70,39,529/- for the period between 23rd September,
2005 and 5th January, 2006. The respondent filed a writ B
petition before the High Court questioning the legality of
the said demand notice.The High Court allowed the writ
...
petition and quashed the Notices. Aggrieved, the State
Government filed the appeal.
Allowing the appeal, the Court,
c
HELD: 1.1. Entertainment duty is a tax. Tax is a
compulsory exaction. There is no equity about tax. It is a
common burden. The State levied the duty in exercise of 0
its statutory power. Sub-s. (1) of s.3 of the Bombay
·i'.
Entertainment Duty Act, 1923 talks in imperative terms.
Sub-section (13) of s. 3 of the Act provides for an
exemption. It contains a non-obstante clause. Such
exemption is to be granted to the owner of the multiplex
theatre complexes subject to the terms and conditions E
specified in Clause (b) of s. 3(13) of the Act. The crucial
words are "there shall be levied and collected by the State
Government." Such levy and collection is to be made
~
from the proprietor of a multiplex theatre complex. By
reason of the said provision, no duty is to be paid for the F
first three years, and for subsequent period of two years,
the levy and collection would be at the rate of 25% of the
rate of duty leviable under Clauses (b) and (c) of sub-s.
(1) of s. 3 of the Act. Indisputably, in terms of Clause (c)
of sub-s. (1) of s. 3 of the Act, the rate of entertainment G
.....
duty on payment of admission fixed by the proprietor
...
within the limits of Brihan Mumbai Municipal Corporation
would be 45% which amount would become payable from
the sixth year. [Para 14] [398-F-H; 399-A-C]
H
380
SUPREME COURT REPORTS
[2009] 11 S.C.R.
--( ....
A
1.2. Clause (b) of sub-s. (13) of s. 3 of the Act uses
the words "concession in duty". It becomes available to
~he proprietor of the multiplex theatre complex only in the
event the terms and conditions specified therein are
fulfilled. Sub-clause (i) of Clause (b) of sub-s. (13) of s. 3
B provides that the proprietor shall not charge less payment
for admission than the prevailing highest rate of
admission at any given time in any of the cinema theatres
,..
in the district in which the c

## Text

_Characters 0–39,983 of 52,878. This is a partial read: ask again with offset=39983 for what follows._

[2009] 11 S.C.R. 378
-{.JiA
STATE OF MAHARASHTRA & ORS.
V.
SWANSTONE MULTIPLEX CINEMA (P) LTD.
(Civil Appeal No. 4718 of 2009)
JULY 27, 2009
B
[S.B. SINHA AND DEEPAK VERMA, JJ.]
,..,
BOMBAY ENTERTAINMENT DUTY ACT, 1923:
,.:l
c
SS.2(d), 3(1), 3(13) - Entertainment duty- Exemption -
Multiplex theatre complex - Collecting entertainment duty
and retaining the same though it was exempt from
entertainment duty - Held: Entertainment duty is a tax - High
Court was not justified in holding that State Government
D conferred upon the theatre the retention benefit - When a
person collects tax illegally it has to refund it to tax payers -
If tax payers cannot be found, court would either direct the
~
same to be paid to and/or appropriated by the State -
·
Supreme Court may, in exercise of its jurisdiction under
E
Article 142 of the Constitution, issue suitable directions -
State shall realize the amount from the theatre to the extent
it had unjustly enriched itself and pay the same to a voluntary
or charitable organization - Doctrine of unjust enrichment -
Constitution of India, 1950 - Article 142.
j,
F
The respondent, a company engaged in the business
of screening of films in its multiplex theatre complex, was
liable to pay duty under the Bombay Entertainment Duty
Act, 1923 @ 45% of payment for admission. The State of
Maharashtra provided exemption in the matter of
G payment of entertainment duty. The respondent availed
~\~
of the said exemption. It, was, however, detected that
during the period for which the respondent was not liable
to pay any duty or was required to pay duty @ 25% only,
it realized the entire duty. The appellants issued a Notice
H
378
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
379
MULTIPLEX CINEMA (P) LTD .
.... )-
to the respondent demanding 75% of the entertainment A
tax reflected by the respondent on its tickets for the period
between 24.6.05 and 22.9.05 amounting to Rs.1,16,95,846
and a further notice dated 21st January, 2006 demanding
Rs.70,39,529/- for the period between 23rd September,
2005 and 5th January, 2006. The respondent filed a writ B
petition before the High Court questioning the legality of
the said demand notice.The High Court allowed the writ
...
petition and quashed the Notices. Aggrieved, the State
Government filed the appeal.
Allowing the appeal, the Court,
c
HELD: 1.1. Entertainment duty is a tax. Tax is a
compulsory exaction. There is no equity about tax. It is a
common burden. The State levied the duty in exercise of 0
its statutory power. Sub-s. (1) of s.3 of the Bombay
·i'.
Entertainment Duty Act, 1923 talks in imperative terms.
Sub-section (13) of s. 3 of the Act provides for an
exemption. It contains a non-obstante clause. Such
exemption is to be granted to the owner of the multiplex
theatre complexes subject to the terms and conditions E
specified in Clause (b) of s. 3(13) of the Act. The crucial
words are "there shall be levied and collected by the State
Government." Such levy and collection is to be made
~
from the proprietor of a multiplex theatre complex. By
reason of the said provision, no duty is to be paid for the F
first three years, and for subsequent period of two years,
the levy and collection would be at the rate of 25% of the
rate of duty leviable under Clauses (b) and (c) of sub-s.
(1) of s. 3 of the Act. Indisputably, in terms of Clause (c)
of sub-s. (1) of s. 3 of the Act, the rate of entertainment G
.....
duty on payment of admission fixed by the proprietor
...
within the limits of Brihan Mumbai Municipal Corporation
would be 45% which amount would become payable from
the sixth year. [Para 14] [398-F-H; 399-A-C]
H
380
SUPREME COURT REPORTS
[2009] 11 S.C.R.
--( ....
A
1.2. Clause (b) of sub-s. (13) of s. 3 of the Act uses
the words "concession in duty". It becomes available to
~he proprietor of the multiplex theatre complex only in the
event the terms and conditions specified therein are
fulfilled. Sub-clause (i) of Clause (b) of sub-s. (13) of s. 3
B provides that the proprietor shall not charge less payment
for admission than the prevailing highest rate of
admission at any given time in any of the cinema theatres
,..
in the district in which the complex is situated till the
~
period of concession under Clause (a) is over. The
c "payment for admission" in terms of s.2(d) must be in
relation to the levy of entertainment duty. The words "in
relation to" are of great significance. The payment for
admission being in relation to the levy of entertainment
duty, there cannot be any composite_ptice for the tickets.
D [Para 15] [399-C-F]
1.3. The respondent from the very inception had been
-~
charging Rs. 135/- from each of the cinema-goers., instead
of Rs.103.51, and had indisputably been collecting 45%
E
of the amount of admission fee by way of entertainment
duty, i.e., the full duty payable in terms of the provisions
of the said Act and the Rules. Respondent itself has
shown the net rate of tickets which they charged by way
of admission charges, entertainment duty separately.
[Para 15 and 16] [309-G-H; 400-D-E]
j,
F
1.4. A proprietor of a multiplex cinema theatre when
collects tax by way of entertainment duty from the
cinema-goers, it would be entitled to collect such tax
which is subject to levy and collection by the State. The
G authority in his behalf is implicit. For the said purpose,
only the statute provides for the mode and manner in
,.__
which the tax is to be collected. Once the taxes are levied,
lr
s. 3 of the Act entitles the State to collect the same from
the owner of the multiplex theatre complex, subject to the
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
381
... )'
MULTIPLEX CINEMA (P) LTD .
concession which had been given to them. Once it is held
A
that the amount realizable from the cinema-goers by way
of entertainment duty comes within the purview of the
definition of 'tax', the High Court was not justified in its
conclusion that the State Government for all intent and
purport conferred the retention benefit. If the State
B
intended to provide for a grant, the same should have
..
expressly been stated. The respondent cannot be
~
granted a huge amount by a welfare state indirectly
which it cannot do directly. [Para 18 and 19] [401-F, C, GH; 402-A]
c
R. S. Joshi, Sales Tax Officer, Gujarat and Others v. Ajit
Mills Limited and Another (1974) 4 SCC 98; Union ofAndia
& Ors. v. Solar Pesticides Pvt. Ltd. & Ors. (2000) 2 SCC 703;
Sahakari Khand Udyog Manda/ Ltd. v. Commissioner of D
Central Excise & Customs (2005) 3 SCC 738, referred to
2.1. The term "concession" is a form of privilege. The
term "exemption" is also a form of privilege. When a
statute confers a privilege, the same must be confined
only to the extent provided for therein. In absence of any
E
express statutory provision, allowing the proprietors of
the multiplex theatre to retain the benefit, such an
inference cannot be drawn. The State has power to
impose tax and to grant ,exemption or concession ',in
respect of payment of tax. It has no power in terms of the
F
provisions of the Constitution or otherwise to allow an
assessee to collect the tax and retain the same. Assuming
that to that effect the provisions are not very clear but the
superior courts will not interpret the statute in such a way
which will confer an unjust benefit to any of the parties,
G
,..,.
i.e., either the taxpayer or tax collector or the State. A
..,
statute must be read in its entirety, then chapter by
chapter and section by section; the rules validly made
forms part of the Act.The statute must, be interpreted
reasonably. It must be so interpreted so that it becomes
H
382
SUPREME COURT REPORTS
[2009] 11 S.C.R.
A workable. Interpretation of a statute must subserve a
constitutional goal. [Para 18 and 24] [401-0-E; 404-D-F]
B
V. Pechimuthu v. Gowrammal (2001) 7 SCC 617,
referred to
Advanced Law Lexican by P. Ramanatha Aiyar,
Advanced (New Delhi: Wadhwa & Company, Nagpur (2005)
Vol. 1 p. 944, referred to.
2.2. A statue of this nature, cannot be interpreted in
C such a manner so as to enable an entrepreneur to get
undue advantage to the effect that he would collect tax
from the cinema-goers and appropriate the same. [Para
25] [404-G]
D
3.1. When a person coll~cts tax illegally, he has to
refund it to the taxpayers. If the taxpayers cannot be
found, the court would either direct the same to be paid
to- and/ or appropriated by the State. In a given case this
Court in exercise of its jurisdiction under Article 142 of the
E Constitution of India may also issue other directions, as
has been done in Indian Banks' Association's case. This
Court may take recourse· to such a procedure, as the
State also having granted exemption was not entitled to
collect the duty and as such was not legally entitled
F thereto. It would be better course, as stricto sensu, Article
296 of the Constitution is not applicable. [Para 25. and 26]
[404-G-H; 405-A-D]
Indian Banks's Association, Bombay and Others v.
G Devkala Consultancy Service and Others (2004) 11 SCC 1,
relied on
3.2. This order is passed keeping in view the peculiar
situation as in either event it was cinema-goers who had
lost a huge amount. It would be travesty of justice if the
H owners of the cinema theatre are allowed to appropriate
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
383
MULTIPLEX CINEMA (P) LTD.
such a huge amount for its own benefit. To the said
A
extent, doctrine of unjust enrichment may be held to be
applicable. A person who unjustly enriches himself
cannot be permitted to retain the same for its benefit, as
in such a case the doctrine of unjust enrichment can be
invoked irrespective of any statutory provisions. [Para
B
26] [405-E-F]
Mafatlal Industries Ltd. v. Union of India (1997) 5 SCC ·
536, relied on.
3.3. Though, in the instant case, the Court is not C
concerned with refund of tax, but then for enforcement
of legal principles, this Court may direct a party to divest
itself of the money or benefits, which, in justice, equity
and good conscience, beiongs to someone else. It must
be directed to restitute that part of the benefit to which it D
was not entitled to. It is, therefore, directed that the State
shall realize the amount to the extent the respondent had
unjustly enriched itself and pay the same to a voluntary
or a charitable organization, which according to it is a
reputed civil society organization and had been
E
rendering good services to any section of the
disadvantaged people and in particular women and
children. The Chief Minister of the State is requested to
take up the responsibility in this behalf so that full, proper
and effective utilization of the amount in question is
F
ensured. [Para 28 and 29] [407 -D-G]
Case Law Reference :
(2001) 1 sec 617
(1974) 4 sec 98
(1997) s sec 536
referred to
referred to
relied on
Para 18
G
Para 20
Para 21
H
384
SUPREME COURT REPORTS
[2009]11 S.C.R.
A
(2004) 11 sec 1
relied on
Para 25
-1--i.
(2000) 2 sec 103
referred to
Para 27
(2005) 3 sec 738
referred to
Para 27
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4718 of 2009.
From the Judgment & Order dated 21.10.2008 of the High
Court of Judicature at Bombay in Writ Petition No. 22 of 2006.
c
Shekhar Naphade, Sanjay V. Kharde, Chinmoy A.
Khaladkar and Asha Gopalan Nair for the Appellants.
H.N. Salve, Shyam Dewan, E.C. Agrawala, Mahesh
D
Agarwal, Rishi Agrawala, Vineet Naik, Ameet Naik and Ravi
Suryavanshi for the Respondents.
-~
The Judgment of the Court was delivered by
E__
S.B. SINHA, J : 1. Leave granted.
Introduction:
2. Doctrine of unjust enrichment, as opposed to doctrine
bf retention, is the core question involved herein. It arises out
F
of a judgment and order dated 21.10.2008 passed by a
:.}.
Division Bench of the Bombay High Court in Writ Petition No.
22 of 2006.
Background facts:
G
3. Respondent is a company registered and incorporated
under the Companies Act. It inter alia is engaged in the
....
business of operating a multiplex theatre, commonly known as
"'
Fame Adlabs in the town of Mumbai for screening of films in
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
3~5
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.]
... )--
the said theatre. Indisputably, the provisions of the Bombay
A
Entertainments Duty Act, 1923 (for short "the Act") are
applicable to the said multiplex theatre. Tre State of
Maharashtra, however, adopted a policy decision to provide
certain exemptions in the matter of payment of entertainment
duties. Entertainment duty is payable at the rate of 45% on
B
payment for admission by the proprietors so far as the multiplex
....
theatres constituted within the limits of the Brihan Mumbai
•
Municipal Corporation are concerned .
4. Respondent availed the said exemption. It, however,
even during the period for which it was not liable to pay any c
duty or duty at the rate of 25% only realized the entire duty.
Appellants issued a notice dated 5.12.2005 demanding 75%
of the entertainment tax reflected by the respondent on its
tickets for the period between 24.06.2005 and 22.09.2005, i.e.,
D
Rs. 1, 16,95,846/-. On or about 30.12.2005, the appellant issued
"'
another notice demanding Rs. 1, 16,95,846/- within 48 hours.
Further on 21.01.2006 issued a further demand notice to the
respondent for a sum of Rs. 70,39,529/- for the period between
23.09.2005 and 5.01.2006.
E
5. The writ petition having been filed questioning the
legality and/ or validity of the said notices of demand, the High
Court by reason of the impugned judgment directed:
"To conclude, it cannot be said that merely because the
F
proprietors printed full entertainment tax duty on the
admission ticket though they were only liable to pay 25%
of the entertainment tax duty for a period of 2 years for
which they were eligible for 75% exemption of the
entertainment tax, they are liable to pay 100%,
entertainment tax without there being any express authority
G
I _,,
of law created by the Statute. On the other hand, it would
..,,
- ...
deprive them of the incentive which has been specifically
offered under the scheme for which the Act came to be
amended and would be in total conflict with the object and
H
386
SUPREME COURT REPORTS
[2009] 11 S.C.R.
A
reasons with which the Government sought amendment of
"1 ~
the Act nor this can be considered as a case of unjust
enrichment as even, otherwise, the gross admission fee
which the patron is supposed to pay minus the
entertainment tax and other taxes (direct or indirect) would
B
ultimately go in the pocket of the proprietors of the multiplex
theaters.
63. Therefore, we find that the State was not entitled to
;ii
claim more than what could be levied as entertainment duty
c
during the two years period irrespective of the fact that the
Exhibitors have shown on admission tickets issued to
patrons 45% of the duty though they were liable to pay only
25% of 45% during the incentive period which was of 2
years. The impugned notice's and order Exh A-1 and A-2
D
and H are quashed and set aside. Rule made absolute
with no order as to costs."
~
Contentions
6. Mr. Shekhar Naphade, learned senior counsel
E appearing on behalf of the appellants, in support of this appeal,
urged:
(i)
Having regard to the provisions of the Act and the
Bombay Entertainments Duty Rules, 1958 (for short
~
F
"the Rules") in terms whereof entertainment duties
were to be levied and collected, the High Court
committed a serious error in opining that the State
had not granted any exemption to the owners of the
multiplex theatre, but the same were by way of
G
retention benefit.
(ii)
As admittedly from the tickets issued by the
.,. -
respondent, it would appear that they had realized
;
full duties from the cinema-goers payable in terms
of the Act for which they had no authority, the
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
387
~
MULTIPLEX CINEMA (P} LTD. [S.B. SINHA, J.]
'
impugned judgment is wholly unsustainable.
A
(iii)
Any amount of tax illegally realized by the assessee
from the cinema-goers would be hit by Section 72
I
of the Indian Contract Act and, thus, the State would
have right to recover the same in exercise of its
B
power conferred on it under Article 296 of the
Constitution of India.
7. Mr. H.N. Salve, learned senior counsel appearing on
behalf of the respondent, on the other hand, would contend:
c
(i)
Under Section 3(13) of the Act read with Rule 15
of the Rules which is applicable in this case, the
respondent was entitled to exemption from payment
of the entire duty for a period of three years and duty
at the rate of 25% for the next two years inter alia
D
v
in the event it charged the same amount of duty
~'
which was being charged in the neighbouring
theatres for which it used to issue computerized
tickets.
E
(ii)
Having regard to the change in economic scenario,
the respondent was entitled and, thus, charged the
entire amount; the total whereof came to Rs. 135/-
at all stages. The State having granted exemption
-\..
to the respondent for the first three years although . F
it ·had charged a total sum of Rs. 135/- from the
cinema-goers, it is estopped and precluded from
demanding any sum when the respondent was
required to pay only 25% of the duties.
(iii)
The admission charges collected by the respondent G
! _.
being a matter of contract by and between it and
the cinema-goers and the Act having not provided
for any forfeiture clause, the question of the
respondent's being unjustly enriched does not
H
I
-
'I~---~----
388
SUPREME COURT REPORTS
[2009] 11 S.C.R.
A
arise, particularly, when it is not a case where the
i --
amount of tax had been deposited which the State
was entitled to keep with it having regard to the
statutory provisions in this behalf.
'
B Statutes
.
I
8. The State of Bombay enacted the Act to impose a duty
in respect of admission to entertainment
A
c
Section 2 of the Act is the interpretation section. "Payment
for admission" has been defined in Section 2(b) to mean:
"(b) "payment for admission" in relation to the levy of
entertainments duty, includesD
(i) any payment made by a person who, having been
admitted to one part of a place of entertainment, is
subsequently admitted to another part thereof for
admission to which a payment involving duty or more duty
is required,
E
(ii) any payment for seats or other accommodation in a
place of entertainment.
(iii) any payment for a programme or synopsis of, an
entertainment.
F
(iii-a) any payment made for the loan or use of any
instrument or contrivance which enables a person to get
a normal or better view or hearing, of the entertainment
which, without the aid of such instrument or contrivance,
G
such person would not get;
(iv) any payment, by whatever name called for any purpose
..
whatsoever, connected with an entertainment, which a
person is required to mak'l, in any form as a condition of
H
attending, or continuing to attend the entertainment, either
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
389
MULTIPLEX CINEMA(P) LTD. [S.B. SINHA, J.]
._)
in addition to the payment, if any, for admission to the
A
entertainment or without any such payment for admissions;
(v) any payment made by a person for admission to a
video exhibition irrespective of whether any eatables or
beverages or both are or are not provided to him against
B
such payment;
,
.
...
(vi) any payment made by a person by way of contribution
or subscription· or installation connection charges or any
other ·charges collected in any manner whatsoever for c
television exhibition with the aid of any type of ar.tenna with
a cable network attached to it or cable television;
(vii) any payment made by a person to the prop.rietor of a
Direct-to-Home (DTH) Broadcasting service by way of
contribution, subscription, installation or connection
D
•
charges, or any other ch'arges collected in any manner
whatsoever for Direct-to-Home (DTH) Broadcasting
service with the aid of any type of set top box or any other
instrument of like nature which connects television set at
a residential or non-residential place of connection-holder E
directly to the Satellite; and
_ (viii) any payment made by way of sponsorship amount for
•
a programme which is organised only for invitees, without
selling tickets."
F
Section 2(d) defines "admission to an entertainment" to
include admission to any place in whic.h the entertainment is
held. Section 2(f) defines "entertainment duty" in respect of any
entertainment to mean the entertainment duty levied under G
Section 3 .
...
The Act distin~uishes a multiplex theatre complex, on the
one hand, and a permanent cinema, quasi-permanent cinema,
on the other. "Multiplex Theatre Complex" has been defined in
Section 2(f-a) of the Act to mean an entertainment - cum -
H
390
SUPREME COURT REPORTS
[2009] 11 S.C.R.
A
cultural centre which provides:
B
"(i) within the limits of Municipal Corporation of Brihan
Mumbai not less than four theatres in a complex with
minimum total seating capacity of 1250; and ·
(ii) anywhere else in the State, not less than three theatres
in a complex with minimum total seating capacity of
1000, ... "
"Permanent cinema" or "quasi-permanent cinema" has
C been .defined in Section 2(f-1) to mean a cinema which is
licensed as a permanent cinema or a quasi-permanent cinema,
as the case may be, under the Maharashtra Cinemas
(Regulation) Rules, 1966.
D
The charging section is Section 3 of the Act in terms
whereof "there shall be levied and paid to the State Government
all payments for admission to any entertainment" subject to the
exceptions contained therein and the rates specified therefor.
E
The relevant portion of Section 3(13) of the Act reads as
under:
·
F
G
H
"(13) (a) Notwithstanding anything contained in any other
provisions of this Act, but subject to the terms and
conditions specified in clause (b), on and with effect from
the date of coming into force of the Bombay Entertainments
Duty (Amendment) Act, 2001 (Mah. II of 2002), there shall
be levied and collected by the State Government from the
proprietor of a Multiplex Theatre Complex the duty in
respect of any such complex as follows, namely:-
(i) for the first three years from the date of commencement
of the Multiplex Theatre Complex, no duty;
(ii) for the subsequent two years, at the rate of twenty-five
•....
'·
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
391
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.].
~
. .,
per cent, of the rate of duty leviable under clause (b) and
A
clause (c) of sub-section (1) or, as the case may be, subsection (3);
(iii) from the sixth year, full amount of duty leviable at the
rate specified in clause (b) and clause (c) of sub-section
B
~
(1) or, as the case may be, subsection (3):
-
***
***
***
},,
(
(b) The concession in duty as provided under clause (a) c
shall be available to the proprietor of the Multiplex Theatre
Complex subject to following terms and condit1ons,
namely:-
(iii) during the period of concession covered by clause (a)
above, the minimum rates of admission in a multiplex shall
D
~
be determined by the Collector. Such minimum rates of
admission shaU not be less than the prevailing highest
rate, excluding the rates of the highest priced fifty seats,
in any of the cinemas theatres in the district in which
multiplex is situated and accordingly such minimum rates
E
of admission may be different for morning, matinee and·
other shows;
***
***
***"
-\·
Section 4 of the Act reads as under:
F
"4 - Method of levy
(1) Save·as otherwise provided by this Act, no person other
than a person who has to perform some duty in connection
G
with an entertainment or a duty imposed upon him by any
~
law, shall be admitted to any entertainment except with a
valid printed ticket or complimentary ticket.
(2) Every proprietor of any entertainment in respect of H
392
SUPREME COURT REPORTS
[2009) 11 S.C.R.
. \
.
··f ....
A
which the entertainment duty is payable under section 3,
shall apply to the prescribed officer by the fifteenth days
of January of every calendar year, to allow him to pay the
entertainment duty due and payable, and the prescribed
omcer may, on receipt of such application, allow the
B
proprietor, on such conditions as the State Government
may specify by general or special order issued in that
~·
behalf, to pay the amount of entertainment duty due.
....
(a) by a consolidated payment of percentage; to be fixed
"'--
c
by the State Government, of the gross sum received by the
proprietor on account of payments for admission to the
entertainment and on account of the duty;
(b) in accordance with returns of the payments for
D
admission to the entertainment and on account of the duty;
(c) in accordance with the results recorded by any
.....
mechanical contrivance which automatically registers the
number of persons admitted:
E
Provided that, the State Government may suo motu, by
general or special order in the Official Gazette, direct the
proprietor of any entertainment or class of entertainment
to pay the amount of duty due, in accordance with the
returns of the results recorded· by any mechanical
;j
F
contrivance referred to in clause (b) and (c), as the case
may be.
Provided further that, the prescribed officer may, within
fifteen days from the date of receipt of the application as
G
aforesaid, reject the application after giving an opportunity
of being heard to the applicant and recording reasons for
suc_h· rejection.
·
)-
(3) The provisions of sub-section (1) of this section and of
section 5 shall not apply to any entertainment in respect
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
393
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.]
of which the duty due is payable in accordance with the A
provisions of sub-section (2)."
....
Section 6 of the Act provides for entertainments for
charitable or educational purposes exempted. Section 9 of the
Act deals with recoveries.
s
9. The Rules framed by the State under the said Act, which
are relevant for our purpose, are as under:
"7. Price of admission, date and show to be shown on,
'C
and stamps affixed to ticket-Except as provided in Rules
15 and 23, every dutiable ticket, not being a complimentary
ticket, issued on payment for admission to· entertainment
shall be in three parts. One part shall remain on the ticket
book and the remaining two parts shall be detached
therefrom and issued to the purchaser. Every dutiable ticket D
shall have each part clearly marked with the price of
admission, and with the date and show for which it is
-available and also with the book number and the serial
numbers (being such series and numbers in respect of the
ticket book and tickets as may be previously approved by E
the prescribed officer) and shall also have securely affixed
to it a stamp of the value of the duty payable out of the said
price of admission :
Provided that the prescribed officer may, upon such F
conditions and for such period as he thinks fit, exempt any
proprietor from the operation of this rule or any part thereof.
xxx xxx
xxx
15. Unstamped tickets issued under Section 4(2)(a) and G
(b):-(1 )Every ticket, not being a complimentary ticket,
issued by a proprietor who has been allowed to pay the
duty under the provisions of clause (a) or clause (b) of subsection (2) of Section 4, shall consist of three parts. One
H
A
B
c
D
E
394
SUPREME COURT REPORTS
[2009] 11 S.C.R.
part shall remain on the ticket book and the remaining two
parts shall be detached therefrom and issued to the
purchaser; and shall bear on each part of such ticket the
price of admission, the book number and the serial number
(being such series and numbers in respect of the ticket
book and tickets as may be previously approved by the
prescribed officer) and the date on which, and the show
for which it is issued.
(2) On admission of the purchaser, the proprietor shall
cause to be collected one of the two parts sold to the
purchaser and the other to be returned to him.
(3) The purchaser shall retain his part of the ticket till he
leaves the place of entertainment, and the part retained by
the proprietor sh~ll be retained by him till the entertainment
is over:
Provided that the prescribed officer may, upon such
conditions and for such period as he thinks fit, exempt any
proprietor from the operation of this rule or any part
thereof."
16. Returns required under Section 4(2) (a) and (b):-
Every proprietor making a consolidated payment under clause
(a) of sub-section (2) of Section 4 or making payment in
F
accordance with return of the payments for admission undr
clause (b) of sub-section (2) of Section 4, shall, within ten days
of the date of entertainment, submit to the prescribed officer a
return in Form 'B', showing the number of tickets (not being
complimentary tickets) issued at each rate, the serial number
G
of ·tickets issued, the gross amount received from the sale of
tickets and the amount of duty payable to the State
Government He shall, if so required by the prescribed officer,
also submit to the said officer, within ten days of the date of
entertainment, a return in Form 'C', showing the price of
H
.. t
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
395
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.]
programme or synopsis including duty, the number of A
programme or synopsis issued, the gross amount received
from the sale thereof and the amount of duty payable to the
State Government."
Form 'B' attached to the Rules read as under:
FORM '8'
(SEE RULE 16)
B
Statement of tickets not being complimentary tickets c
issued when duty is payable under clause (a) or (b) of subsection (2) of Section 4
Name and place- of entertainment: .............. Date of
performance: ........... .
Number
Price of
Number Serial
Gross
Amount Remarks
and
tickets
of
numbers
receipts of duty
time of
including tickets
of tickets
payable
show
Duty
issued
to Gover
ment
subject
to
duty
From to
Rs.
Rs.
I
10. We may for the sake of completeness also place on
record that the State had adopted two resolutions, viz., dated
21.09.2000 and 4.01.2003
The relevant portion of annexure attached to the resolution
dated 21.09.2000 is as under:
"(1) The three parts of the ticket should be in the following
D
E
F
G
order.
H
A
8
c
D
E
F
G
H
396
SUPREME COURT REPORTS
[2009] 11 S.C.R.
Portion
Portion remaining
Portion to be
remaining
with the
retained by
with the
door keeper
the spectators
(A Counter)
(D Counter)
(P Counter)
***
***
***
, (8) Sale of tickets of the Movie which is exempted from
Entertainment Tax, the tickets should have printed ,on it 'Tax
Free". And of ticket after deduction of tax should be printed
on the ticket.
xxx xxx
xxx
11. Each ticket should be printed in the format shown
below:
Alphabet of series
Roll No.
Six digit. Ticket
Code No. of
Number
Theatre
Sale Centre
Name of Theatre
Address
Show Time
Entrance Fee
Show Date/day
Entertainment Tax
Seat Group
Service Charges
Row No. Seat No. ND/P Counter.Total Entrance
Fee Rs."
Clause 3 of the resolution dated 4.01.2003 reads as
under:
"3. It was declared by the Government Resolution dated
the 20th September, 2000 that the concessions to be
granted in the Entertainment Tax to the Multi purpose
Cinema Theatres complexes would be implemented
during the period from the 17th August, 2001 to 16th
...I
J
).- '
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
397
MULTIPLEX CINEMA (P) LTD. [S.8. SINHA, J.]
,. 't
August, 2002. There was very good response to the said
A
scheme in the State. Total 221 applications were received
by Government in the State for grant of availing concession
in the entertainment tax avai.lable to the Multi purpose
cinema theaters complexes Government had decided that
all the applications should be properly scrutinized from the
B
point of view of getting concessions in the Entertainment
,,
Tax only to the appropriate Multi purpose Cinema Theatre
..
and all the facilities will be definitely reached upto the
public/audience as expected by Government and the
Cinema industry will be developed healthy."
c
In the said resolution, it was further stated:
"(i)
The applicant will be eligible to get the exemption
from paying entire Entertainment Tax for period-of
first 3 initial years from the date of commencement
D
of the Complex, whereas, he will be admissible
exemption (sic) from paying 75 per cent of the
Entertainment Tax due for the fourth and fifth years.
The applicant must pay the Entertainment Tax at the
prescribed rate from the sixth year. IV
E
11. Section 72 of the Indian Contract Act, 1872 reads as
under:
..
"72 - Liability of person to whom money is paid or thing
delivered by mistake or under coercion ·
F
A person to whom money has been paid, or anything
delivered, by mistake or unde.r coercion, must repay or
return it."
12. Article 296 of the Constitution of India reads as under:
G
....
--4
"296 - Property accruing by escheat or lapse or as bona
vacantia
SUbject as hereinafter provided any property in the territory
H
398
A
B
c
SUPREME COURT REPORTS
[2009] 11 S.C.R.
of India which, if this Constitution had not come into
operation, would have accrued to His Majesty or, as the
case may be, to the Ruler of an Indian State by escheat
or lapse, or as bona vacantia for want of a rightful owner,
shall, if it is property situate in a State, vest in such State,
anc:i shall, in any other case, vest in the Union:
Provided that any property which at the date when it would
have so accrued to His Majesty or to the Ruler of an Indian
State was in the possession or under the control of the
Government of India or the Government of a State shall,
according as the purposes for which it was then used or
held were purposes of the Union or a State, vest in the
Union or in that State.
Explanation.--ln the article, the expressions "Ruler", and
D
"Indian Slate" have the same meanjngs as in article 363."
Statutory Interpretation
13. A statute, as is well-known, must be read in its entirety,
then chapter by chapter and section by section. It is also wellE settled that the rules validly made forms part of the Act.
14. Entertainment duty is a tax. Tax, as is well-known, is a
compulsory exaction. There is, it is trite, no equity about tax. It
is a common burden. The State levied the duty in exercise of
F
its statutory power. Sub-section (1) of Section 3 of the Act talks
in imperative terms. Sub-section (13) of Section 3 of the Act,
wherewith we are concerned, provides for an exemption. It
contains a non-obstante clause. Such exemption is granted
wholly or partly and spread out over a period of five years. It is
G to be granted to the owner of the multiplex theatre complexes
subject to the terms and conditions specified in Clause (b) of
Section 3( 13) of the Act. The crucial words are "there shall be.
levied and collected by the State Government. Such levy and
collection is to be. made from the proprietor of a multiplex
H theatre complex. By reason of the said.provision, no duty is to
).. ...
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
399
MULTIPLEX CINEMA (P) LTD. [S.S. SINHA, J.]
,.. "*
be paid. If no duty is to be paid by the multiplex theatre complex,
A
the question of the same being levied and collected would not
arise for a period of three years. Similarly, fc~ subsequent
period of two years, the levy and collection would be at the rate
of 25% of the rate of duty leviable under Clauses (b) and (c) of
Sub:section (1) of Section 3 of the Act. Indisputably, in terms
B
of Clause (c) of Sub-section (1) of Section 3 of the Act, as noted
-
hereinbefore, the rate of entertainment duty on payment of
•
admission fixed by the proprietor within the limits of Brihan
Mumbai Municipal Corporation would be 45% which amount
would become payable from the sixth year.
c
15. Clause (b) of Sub-section (13) of Section 3 of the Act
uses the words "concession in duty". It becomes available to
the proprietor of the multiplex theatre complex only in the event
the terms and conditions specified therein are fulfilled. Subclause (i) of Clause (b} of Sub-section (13) of Section 3 D
A
provides that the proprietor shall not charge less payment for
admission than the prevailing highest rate of admission at any
given time in any of the cinema theatres in the district in which
the complex is situated till the period of concession under
Clause (a) is over. Section 2(b) of the Act provides for an
E
inclusive provision. The provision is not-exhaustive although
expansive. The payment for admission must be in relation to
the levy of entertainment duty. The words "in relatiort to" are of
.,
great significance. The payment for admission being in relation
to the levy of entertainment duty, there cannot be any composite
F
price for the tickets.
Mr. Salve may be correct that Rule 7 of the Rules would
not be applicable in the instant case but we are not concerned
therewith. But except for complementary tickets, all other tickets
G
are required. to be in three parts. They must fulfill the other
....
4
criteria laid down therein including.the price for admission, the
ticket number, the serial number, the date and the show for
which it is issued. Respondent from the very inception had been
charging Rs. 135/- from each of the cinema-goers.
H
400
SUPREME COURT REPORTS
(2009] 11 S.C.R.
A
We may heretobelow notice the method of computation
B
c
D
which the respondent themselves showed vis-a-vis the correct
method of computation and entertainment duty as per the State:
Particulars of Tickets Ticket rate as
Corrected method
per ticket issued
of computation
by the Petitioner
of entertainment
duty as per G.R.
A) Net rate of tickets
93.05
93.05
B) Entertainment Duty
41.95
10.46
C) Service Charges
Nil
Nil
D) Gross rate of ticket
135.00
103.51"
16. In view of the aforementioned admitted situation, the
State is entitled to raise a contention that whether the
respondent was entitled to keep the entire gross receipt for the
first three years and 75% of the tax payable for the next two
E years thereafter is the question. Respondent itself has shown
the net rate of tickets which they charged by way of admission
charges, entertainment duty separately. Respondent had
indisputably been collecting 45% of the amount of admission
fee by way of entertainment duty, i.e., the full duty payable in
terms of the provisions of the said Act and the Rules.
F
17. The contention of Mr. Salve that the entire amount of
'Rs. 135/- became chargeable from the cinema-goers as a
price is fallacious. If the sum of Rs. 135/- is the amount which
the owner of a multiplex theatre complex becomes entitled to
G appropriate, the rate of admission would come down from the ·
sixth year in so far as that, whereas for the first three years, the
respondent would be entitled to keep a sum of Rs. 135/- with
•
""'
it; for the next two years, it would become entitled to Rs. 124.54
only and Rs. 93.05 from the sixth year.
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE
4Cl1
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.)
-
i
18. Section 3(13)(a) of the Act uses two different terms,
A
viz., duty and admission. They must be held to have different
meanings. It is one thing to say that in terms of ~he Rules they
were not liable to show the rate of tax collected from the cinemago~rs but it is another thing to say that although they had
collected the full rate of tax from the cinema-goers, they would
B
be entitled to retain the benefit thereof. Whether a statute
expressly confers power on an assessee to realize the amount
~
of tax payable to the State from its customers or not, in our
opinion, is wholly immaterial. The fact remains that it has to
collect such taxes which are to be collected from the consumers c
and are required to be levied. Once the taxes are levied,
Section 3 of the Act entitles the State to collect the same from
the owner of the multiplex theatre complex, subject, of course,
to the concession which had been given to them.
The term "concession" is a form of privilege. {See V.
D
>
Pechimuthu v. Gowrammal (2001) 7 SCC 617); P. Ramanatha
Aiyar, ,.Advanced Law Lexican (New Delhi: Wadhwa &'-
Company, Nagpur, 2005) Vol. 1 p. 944]. The term "exemption"
is also a form of privilege. When a statute confers a privilP.g~,
E
the same must be confined only to the extent provided fN
therein.
19.