1. This writ petition concerns the exemption from payment of entertainment duty granted by the State of Maharashtra to Sir Richard Attenborough's film 'GANDHI '.
2. on 9th Dec., 1982 an agreement was arrived at between the Globe Theatres Pvt. Ltd., the 1st petitioner, and the Music India Ltd., the 3rd respondent. Music India are the distributors of the film 'GANDHI '. Globe Theatres are the owner of the Regal Cinema at Bombay . By the agreement the parties agreed that the film 'GANDHI ' would be released in English at the Regal on 14th Jan., 1983 and that Music India would pay each week to Globe Theatres the fixed sum of Rs. 33, 078/- plus an additional amount depending upon receipts. An English print of the film 'GANDHI' was commercially released at Regal from 28th Jan., 1983.
3. On 28th Feb., 1983 the State of Maharashtra, the 1st respondent, in exercise of powers conferred by Section 6(3) of the Bombay Entertainment Duty Act, 1923, 'exempted throughout the State of Maharashtra the exhibition of Sir Attenborough's film 'GANDHI' from liability to pay entertainment duty' subject to the conditions stated therein. the first condition was that 'the exemption shall be valid for a period of 3 months with effect from 1st Mar., 1983'. The second condition is most relevant to this petition and reads thus:--
'(ii) The exemption shall be limited to 4 prints in Greater Bombay and 29 prints in other Districts, i.e., one print per District'. The other conditions need not concern us.
4. On 1st Mar., 1983 Music India wrote to Globe Theatres that, in view of the limitations of the exemption, 'it had been decided to exhibit all English prints in Maharashtra without the Tax Exemption benefit, i.e., all theatres exhibiting the English version of the film will sell tickets at the full price which element.' The Globe Theatres protested. On 6th Mar., 1983 the State issued a press release to clarify that the tax exemption was available also to the English print of the film 'GANDHI'. On 8th Mar., 1983 Music India replied to the protests of Globe Theatres. The letter noted that since 4 Hindi prints were being exhibited when the exemption order was issued and there was an appreciable drop in the revenue from the Hindi version of the film when there was no entertainment tax exemption, it had been decided that the 4 Hindi prints should continue to receive the exemption facility. The letter stated that assumption on which this had been done had been justified as there had been an appreciable improvement in the revenue from the Hindi version while there was no drop in the revenue from the exhibition of the English print.
5. On 11th Mar., 1983 Globe Theatres, its Joint Managing Director and a Regal-goer filed this petition impugning the condition of the exemption order restricting the number of prints that would be given the exemption. At an interim stage of the petition, an order was passed requiring Globe Theatres to collect entertainment duty from the Regal's patrons but to retain the same with themselves till further orders. Patrons of the theater were to be informed that they might, if the Court so ordered, be entitled to refund of the entertainment duty paid by them upon the production of their ticket counter-foils.
6. It is contended by Mr. Vahanvati, learned counsel for the petitioners, that the imposition of a condition restricting the number of prints which would get exemption from entertainment duty was ultra vires Section 6 (3) of the Bombay Entertainment Duty Act, 1923. He contended also that the condition offended Article 14. He submitted that the condition was severable and could be struck down as such. It was contended by Mr. Vahanvati, in the alternative, that the English print being exhibited at the Regal was, in any event, covered by the exemption order.
7. Mr. Shah, learned counsel for the State, submitted that the petitioners has no locus to maintain the petition. He submitted that the revenue of the Globe Theatres did not suffer by reason of the fact that the print being exhibited at the Regal was not Shah's submission the State was delegated the power to grant exemptions from the payment of entertainment duty subject to such terms and conditions as were specified by the State. The specification of the terms and conditions was left to the State. The State was more familiar with the problem of exemption of the film 'GANDHI'. The condition restricting the number of its prints for the purposes of exemption from entertainment duty was a condition which the State could validly impose. There was no discrimination. The controversy had arisen out of disputes between Globe Theatres and Music India. had Music India exhibited only 4 prints in Greater Bombay , the controversy would not have arisen.
8. Mr. Shah stated in reply to a query by the Court that the exemption had been granted upon an application made by Music India on 3rd Dec., 1982. The application had been made for the grant of exemption for 50 prints of the film in Hindi and 5 in English. In answer to another query, Mr. Shah submitted that the State had power to restrict the number of prints which a distributor could exhibit; it was a consequence of the power it had under Section 6 (3)
9. Section 6 (3) reads thus:---
'The State Government may, by general or special order, exempt any entertainment or class of entertainments from liability to entertainments duty subject to such terms and conditions, if any as may be specified in the order.'
Rule 24 of the Bombay Entertainments Duty Rules, 1958, mentions the classes of cinema films qualified for exemption under State. 6 (3). A film which the State or social purpose of a high order' is qualified for exemption.
10. Section 6 (3) contemplates the exemption of an entertainment from liability to entertainment duty. The entertainment in the case of a film is derived upon its projection on a screen. when what is projected fulfills an educational, cultural or social purpose of a high order the film may be exempted from entertainment duty. When a film is so exempted, every print of that film is ipso facto exempted. Every print of that film fulfills an educational, cultural or social purpose. There is, and can be, no power to restrict the exemption to only a stated number of its prints. When, as here, the exemption is restricted to only number of prints of a film which is exempted from payment of entertainment duty, one has the unacceptable position that some prints of the film fulfill as educational, cultural or social purpose and some document not. To restrict the number of prints of a film which are entitled to exemption from entertainment duty is, accordingly, to act arbitrarily and irrationally.
11. The film 'GANDHI' is by the exemption order exempted throughout the State from liability to pay entertainment duty. No condition can be imposed upon the number of its prints which are entitled to the exemption.
12. As I read the Act, there is no power, either explicit or implicit or consequential, by which the State can restrict the number of prints of the film exhibited by the distributor. Where, therefore, exemption from entertainment duty is restricted to only a specified number of prints, it is left to the distributor to decide which particular prints should receive the benefit of the exemption. In the instant case, on the date on which the exemption order was issued, 4 Hindi and 1 English print of the film were being exhibited in Greater Bombay . It was left to Music India to decide which 4 prints would receive the benefit of the exemption from entertainment duty within Greater Bombay . This too is beyond the powers conferred by State. 6 (3).
13. The film, 'GANDHI' was exempted because it was considered by the State to fulfill an educational, cultural r social purpose of a high order. Why, then should a cinema-goer at the Regal have to pay entertainment duty for seeing a film which fulfills this purpose? And why should he have to pay entertainment duty when another cinemagoer, seeing a print of the same film to which the benefit of the exemption from payment of entertainment duty has been made available by the distributor, does not? Why should one theatre-owner reap the benefit of a larger business because the print that he shows has been given the benefit of the emption from entertainment duty while another have his business suffer because the print that he shows has not been accorded such benefit? There are no satisfactory answers to these questions. Discrimination is writ large upon the impugned condition.
14. Having regard to all this, I have no doubt that the impugned condition is ultra vires the powers of the State under Ss. 6 (3), is arbitrary and discriminatory and must be struck down.
15. That the condition is severable is patent. The film 'GANDHI' has been found to fulfill an educational, cultural or social purpose of a high order. Every print of the film fulfills that purpose and every print and its viewers can and must have the benefit of the exemption from entertainment duty.
16. Mr. Shah relied upon authorities of the Supreme Court, to which I now refer. In I. C. Corpn. v. Commercial Tax Officer, Hubli, : 2SCR345 , the Court said, 'A concession is not a matter of right. where the Legislature, taking into consideration the hardships caused to a certain set of tax-payer, gives them a certain concession it does not mean that that action is bad as another set of tax-payers similarly situated may not have been given a similar concession'. This judgment does not say that any concession from tax is valid, though arbitrary or discriminatory.
17. In I. T. Officer, Shillong v. N. T. R. Rymbai, AIR 1976 SC 670, the Court observed that the legislature had ample freedom to select and classify persons, districts, goods, properties, incomes and object which it would tax, and which it would not tax. So long as the classification made within this wide and flexible range by a taxing statute did not transgress the fundamental principles underlying the doctrine of equality, it was not vulnerable on the ground of discrimination merely because it taxed or objects and not others. Having held that the classification of 33 prints made by the impugned order is arbitrary, discriminatory and irrational, it transgresses the doctrine of equality and must be struck down.
18. In M. Match Works v. Asstt. Collector C. E. : 1978(2)ELT429(SC) , the Court observed that the modern State, in exercising its sovereign power of taxation, had to deal with complex factors relating to the objects to be taxed, the quantum to be levied, the conditions subject to which the levy had to be made, the social and economic policies which the tax words of Mr. Justice Holmes that the machinery of government would not work if it were not allowed a little play in its joints. It will have been noticed that it was urged that the State was more familiar with the problem of entertainment of the film 'GANDHI' but, though the State's affidavit says much the same thing, it does not disclose what that problem is. Mr. Shah laid emphasis upon a portion of the judgment which holds that the unconstitutionality and not unconstitutionality of the impugned condition. The unwisdom of it is not for the Court to comment upon.
19. In Union of India v. P. M. works, : 1978(2)ELT436(SC) , the Court reiterated that in the matter of granting concessions or exemption from tax, the Government had a wide latitude of discretion. It need not give exemption or concession to everyone in order that it may grant the same to some. Undoubtedly, provided there is no arbitrariness or invidious discrimination, as there is here.
20. The point about locus raised by Mr. Shah can be shortly disposed of. The third petitioner is a cinema-goer who wants to see the film 'GANDHI' at the Regal but does not want to pay entertainment duty for doing so. He certainly has the standing to maintain this petition.
21. Mr. Shah's submission that the real dispute was between Music India and Globe Theatres because Music India had not given the English print of the film GANDHI the benefit of the exemption to serve its own ends is true but Music India has been enabled to serve its own ends by reason of the arbitrariness and irrationality of the impugned condition.
22. In the result, condition (ii) of the exemption order dated 28th Feb., 1983 is struck down. I direct that issuance of a writ requiring the 1st and 2nd respondents forthwith to grant an exemption order in respect of the film 'GANDHI' without any condition limiting or restricting the exemption to a specified number of its prints. I direct the 1st and 2nd petitioners to return to patrons of the Regal between 17th Mar., 1983 till today the amount of the entertainment duty paid by them for seeing the film 'GANDHI', upon production of ticket counterfoils. The facility of such return shall be made available up to 30th April, 1983. The petitioners shall advertise the facility. Immediately after 1st May, 1983, the 1st and 2nd petitioners shall make up accounts of the entertainment duty collected and returned and shall pay over to the 1st and 2nd respondents the unrefunded amount of entertainment duty. No. order as to costs.
23. On Mr. Shah's application, the order is stayed till 5 p. m. on 4th April, 1983. During the interregnum the interim order passed in the petition shall continue. The 1st and 2nd petitioners are at liberty to inform patrons that his order has been passed but is stayed until 4th April, 1983.
24. Ordered accordingly.