Section 9-A applies when any entertainment shows escaped assessment of tax under Section 4 or 4-A. In such an event, the prescribed authority shall assess to the best of its judgment, the tax due on such entertainment shown under section 4 or section 4A after making such enquiry as it considers necessary within a limited 6 period. Section 9-A does not apply as no assessment was done previously and the appellant is not assessed under Section 4 or Section 4(1-A) or Section 4A earlier. If any entertainment tax was assessed under section 4 or section 4(1-A), and if tax escaped the assessment in such past assessment, the invocation of section 9-A comes into picture so as to assess the escaped tax. Since, the proceedings of the Entertainment Tax Officer are assessed for the first assessment, the provisions of Section 9A have no relevance. In the instance case, enquiry, as required under Section 9, has been carried out by giving a notice, but no objections were filed. Therefore, it cannot be said there was any illegality in invoking Section 9, more so, when there is escaped assessment.

AP HIGH COURT 

THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

THE HON’BLE SRI JUSTICE BATTU DEVANAND

C.M.A. Nos.591, 594, 596, 598, 599, 600,

603, 604, 609, 590, 607 and 608 of 2019

 DEVATHA MAHAL

-VS-

STATE OF ANDHRA PRADESH

    Advocate - GP FOR COMMERCIAL TAX (AP)

COMMON JUDGMENT : (per the Hon’ble Sri Justice C.Praveen Kumar)

1. The present appeals are filed under Section 9E of A.P.

Entertainment Tax Act, 1939 (for short, ‘the Act’) questioning the

orders dated 26.09.2018 passed by the Appellate Deputy

Commissioner, Tirupati, in ADC Order Nos.3634/28-09-2018,

3634/28-09-2018, 3633/28-09-2018, 3632/28-09-2018,

3635/28-09-2018, 3632/28-09-2018, 3634/28-09-2018,

3635/28-09-2018, 3635/28-09-2018, 3633/28-09-2018,

3633/28-09-2018 and 3632/28-09-2018 respectively.

2. The facts in issue are as under :

 The appellant theatres - Kavali management, have

screened films and filed weekly returns in Form-V along with

Daily Collection Reports under Andhra Pradesh Entertainment

Tax Act, 1939. The details of which are reflected in the order. It

is said that exhibitors have exhibited high budget/dubbing films

in the guise of low budget films and thereby evaded

entertainment tax to the Government, violating Section 4(1-A) of

Andhra Pradesh Entertainment Tax Act and conditions of

G.O.Ms.No.604 (Revenue (CT-IV) Department, dated 22.4.2008.

After careful consideration of the objections filed by the

managers of the theaters, Form-A was issued directing to pay 

2

the balance of tax after deducting the tax paid. Orders passed

by the Entertainment Tax Officer, Kavali, came to be challenged

before the Appellate Deputy Commissioner, who, after going

through the facts in issue and also considering the objection

raised with regard to the applicability of Section 4 vis-à-vis

Section 9, dismissed the appeals. Challenging the same, these

appeals are filed under Section 9E of the Act.

3. The main ground urged by the learned counsel for the

appellants is that in the facts and circumstances of the case,

entertaining an application under Section 4 of the Act without

invoking Section 9-A of the Act is illegal and incorrect. The

second ground urged by the learned counsel for the appellant is

that the appellants herein are entitled to certain exemptions

under the G.O., which were not properly brought to the notice of

the authorities. These two objections were dealt with by the

appellate authority and negatived the same.

4. In so far as entitlement to avail concessions or exemptions

under the entertainment tax, it is to be noted that though

notices were given to the appellants on four occasions on

13.7.2015, 13.6.2016, re-assessment show cause notice on

10.5.2017 and final notice on 12.6.2017, the appellants herein

failed to file objections. The material on record show that if the

appellants intend to differ with the proposal, they have to follow

the conditions laid down in G.O.Ms.No.604, dated 22.4.2008.

They have to file documentary evidence of certified copy of the

feature film/low budget film along with certified copy of 

3

certification obtained from A.P. Film Development Corporation to

the effect the feature film/low budget film is produced in the

State of Andhra Pradesh. The material indicate that the

exhibitors should inform the Entertainment Tax Officer in

advance, in writing, the particulars of screening the feature

film/low budget film produced in A.P. in the application form

represented in G.O.Ms.No.604, dated 22.4.2008. It is clear from

the record that appellants neither filed any objections nor filed

any documentary evidence to contradict the movies screened as

per the UFO, Chennai, even after receiving the detailed date

wise/movie wise information furnished by the Entertainment

Tax Officer, Kavali. Therefore, the argument of the learned

Government Pleader that appellants are not entitled for any

exemptions cannot be brushed aside.

5. At the same time, learned counsel for appellants would

contend that if a reasonable opportunity is given to appellants,

they will file all the objections and documentary evidence

contradicting the movies screened as per the UFO, Chennai.

6. In so far as the applicability of Section 4 and Section 9 of

the Act is concerned, it will be useful to refer to Section 4(1-A)

and Section 9-A of the Act, which are as under :

Section 4(1-A) : There shall be levied and paid to the state

government a tax on the gross collection capacity on every show

(hereinafter referred to as the Entertainments Tax) in respect of

entertainments held in the theatres specified in column (2) of the

table below and located in the local areas specified in the

corresponding entry in column (1) of the said table, calculated at 

4

the rates specified in the corresponding entry in column (3)

thereof for the number of shows prescribed therein for every week.

Local Authority Theatre Rate of tax on the

gross collection

capacity per show

(1) (2) (3)

a) First Grade

 Municipality

All categories of

theatres

10% of the gross

collection capacity

per show multiplied

by 21.

b) Second Grade

 Municipality

All categories of

theatres

9% of the gross

collection capacity

per show multiplied

by 21

c) Third Grade

 Municipality

All categories of

theatres

8% of the gross

collection capacity

per show multiplied

by 17

d)Gram Panchayats

townships and any

local authorities

(1) with a

population of

15,000 and above

i) permanent and

semi-permanent

ii) Touring and

Temporary

7% of the gross

collection capacity

per show multiplied

by 14

7% of the gross

collection capacity

per show multiplied

by 10.

(2) with a

population of 7,500

and above but

below of 15,000.

i) permanent and

semi-permanent

ii) Touring and

Temporary

6% of the gross

collection capacity

per show multiplied

by 14.

6% of the gross

collection capacity

per show multiplied

by 10.

(3) with a

population of less

than 7,500

i) permanent and

semi-permanent

ii) Touring and

Temporary

5% of the gross

collection capacity

per show multiplied

by 14.

5% of the gross

collection capacity

per show multiplied

by 7.

 

5

“Section 9A : Payment for Admission, etc., escaping

assessments :

 “(1) Where, for any reason any entertainment show has

escaped assessment to tax under section 4 or section 4A, the

prescribed authority may, subject to the provisions of sub-section

(3) and at any time within such period as may be prescribed,

assess to the best of its judgment the tax due on such

entertainment show under section 4 or section 4A, as the case

may be, after making such enquiry as it considers necessary and

after giving the proprietor a reasonable opportunity to show cause

against such assessment

 (2) Where, for any reason any entertainment show has

been assessed at a rate lower than the rate at which it is

assessable under section 4 or Section 4-A, as the case may be,

the prescribed authority may, subject to the provisions of subsection (3) and at any time within such period as may be

prescribed, re-assess the tax due on such payment or

entertainment show under section 4 or Section 4-A as the case

may be, after making such enquiry as it may consider necessary

and after giving the proprietor a reasonable opportunity to show

cause against such re-assessment.

 (3) When making an assessment to the best of Judgment

under sub-section (1) or sub-section (2) the prescribed authority

may also direct the proprietor to pay in addition to the tax

assessed, a penalty as specified in sub-section (4).

 (4) The penalty leviable under sub-section (3) shall,--

 (a) in a case where the prescribed authority is satisfied

that the failure of the proprietor to disclose the whole or part of

the particulars correctly or to submit the return before the

prescribed date, was willful, not exceed one and half times the

entertainments tax or the tax on entertainment shows due;

 (b) in a case where such failure was not wilful, not exceed

on half of such tax :

 Provided that where such failure occurred due to a

bonafide mistake on the part of the proprietor, no such penalty

shall be levied.

 Provided further that no penalty under this sub-section

shall be imposed unless the proprietor affected has had a

reasonable opportunity of showing cause against such

imposition.”

7. A reading of the two provisions makes it clear that Section

9-A applies when any entertainment shows escaped assessment

of tax under Section 4 or 4-A. In such an event, the prescribed

authority shall assess to the best of its judgment, the tax due on

such entertainment shown under section 4 or section 4A after

making such enquiry as it considers necessary within a limited 

6

period. Section 9-A does not apply as no assessment was done

previously and the appellant is not assessed under Section 4 or

Section 4(1-A) or Section 4A earlier. If any entertainment tax

was assessed under section 4 or section 4(1-A), and if tax

escaped the assessment in such past assessment, the invocation

of section 9-A comes into picture so as to assess the escaped tax.

Since, the proceedings of the Entertainment Tax Officer are

assessed for the first assessment, the provisions of Section 9A

have no relevance. In the instance case, enquiry, as required

under Section 9, has been carried out by giving a notice, but no

objections were filed. Therefore, it cannot be said there was any

illegality in invoking Section 9, more so, when there is escaped

assessment.

8. The main plea of the learned counsel for appellants

appears to be that if an opportunity is given to appellants, they

would fulfil the requirements by claiming exemptions or

concessions as per the said G.O.

9. The same is strongly opposed by the learned Government

Pleader for Commercial Taxes contending that enough

opportunities have been given to appellants, but, in spite of the

same, they never utilized. She also contends that there is any

amount of doubt as to whether really the appellants are entitled

to any exemptions or concessions as urged by them. According

to her, even if such exemptions or concessions are given, still

appellants would be liable to pay certain amounts. 

7

10. A perusal of the orders impugned shows that it is not as if

the appellants have not paid any money. They have paid some

amount which was adjusted and thereafter the amount due is

reflected in the orders. Having regard to the facts and

circumstances of the case and with a view to give the appellants

an opportunity, we feel that it is a fit case where the matter can

be remanded back directing the appellants to fulfil the

requirements as pleaded here on certain terms and conditions

within a period of four weeks from today. In which event, the

primary authority shall pass appropriate orders within a period

of four weeks thereafter.

11. As the orders of the appellate authority indicate that the

appellants have paid some amounts out of disputed amounts,

and with a view to give an opportunity to appellants (only to the

extent of producing material for availing concessions or

exemptions) the matter shall be remanded back, setting aside the

orders under challenge, subject to appellants paying ½ (half) of

the demanded (disputed) amount, which would be inclusive of

the disputed amount already paid. Further, the appellants

shall comply with the order within four weeks from today, in

which event the primary authority shall pass orders in

accordance with law within four weeks thereafter. If the

appellants fail to deposit the amount within four weeks, as

directed above, the authorities shall proceed further basing on

the earlier orders passed. 

8

12. With the above directions, the Appeals are allowed. No

orders as to costs.

 Consequently, interlocutory applications pending, if any,

shall stand closed.

______________________________

JUSTICE C.PRAVEEN KUMAR

_____________________________

JUSTICE BATTU DEVANAND

Date : 24.03.2020

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