1. This is a petition under Article 226 of the Constitution and the petitioners before us are Messrs. Silver Screen Enterprises, a firm which carries on the business of exhibiting cinematograph films, and Badri Prasad Seth, the proprietor of a Cinema house at Simla. The petitioners challenge the validity of some provisions of Act 8 of 1954 which empowers the levy of entertainment tax on cinematograph shows exhibited in public. By this Act a tax up to a maximum Rs. 10/- can be levied 'on all public cinematograph exhibitions to which persons are admitted on payment.'
2. Mr. Grover raised four points before us. He contended in the first place that this was a tax on a profession or calling as contemplated by Entry 60 of List II of the Seventh Schedule to the Constitution, and inasmuch as the annual levy of the tax would exceed a sum of Rs. 250/- the State Government was not empowered to impose such a tax in view of the provisions of Article 276 of the Constitution.
In the second place, he contended that Section 6 Sub-section (2) of the Act gives arbitrary powers to Government to levy this tax from individuals chosen according to their caprice and therefore the power to tax contravened Article 14 of the Constitution. In the third place, he contended that Article 14 was also contravened because the levy of tax was uniform on all cinemas irrespective of the income they furnished to their proprietors. Lastly, he contended that the provisions of the Act infringed Article 19 of the Constitution.
3. With regard to the first point it is quite clear that the tax falls under Entry 62 which deals with 'Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling'. This is clearly a tax on entertainment because it is the exhibition of a cinematograph film which is being taxed. Mr. Grover argued that the tax payable by the proprietor and that a person who exhibits cinematograph films or in other words is the proprietor for the purposes of this Act follows the calling of a cinematograph exhibitor.
Thus it is the profession of exhibiting films which is being taxed. Now, it is quite clear that the person who pays a tax follows some calling or the other but for that reason alone the tax does not become a tax on his profession or calling. Otherwise the sales tax would be a tax on the profession, of shop-keeping, and any kind of tax would be a tax on the profession which the taxed individual follows. This is clearly a tax on entertainments and the mere fact that the person who pays the tax follows the vocation of providing entertainment for public does not make it a tax which falls under Entry 60.
4. This matter was considered by a Division Bench of the Bombay High Court in -- 'Cantonment Board, Poona v. Western India Theatres Ltd.', 1954 Bom. 261 (AIR V 41) (A). The tax was imposed before the coming into force of the Constitution and the Bombay High Court was considering the interpretation of Item 50 of List II, Schedule Seventh to the Government of India Act, 1935, but that item is in exactly the same terms as Entry 62. In that case too tax was imposed upon the exhibition of films and it was held that it was a tax on entertainment and not on profession or trade'. Bavdekar J. observed:
'Now, the first thing to be noticed when interpreting the words 'tax on entertainments' which occur in Item No. 50 in the Provincial Legislative List is that the word 'entertainments there is used in the plural. It is impossible to accept a contention therefore that 'entertainment' means the receipt of entertainment. The plural necessarily Indicates that the word is used as a common noun and not an abstract one. The entertainment as a common noun must necessarily mean in the case of a cinema a show, in the case of a drama a performance, in the case of a cricket a match.' The tax in that case was held to be valid on the ground that it fell within Item 50.
5. Our attention was drawn by Mr. Grover to a decision of the Court of Madhya Bharat in --'Shrikrishna Shaligram v. Municipal Committee, Ujjain', 1953 Madh-B. 145 (AIR V 40) (B). In that case the learned Judges took the view that a tax on cinema shows was a tax on profession. With great respect to the learned Judges I find myself unable to accept this interpretation of the wording of Entry 60. It must be remembered that in considering under what item a certain tax falls we have to look to the essentials of the tax, in other words its pith and substance. Even if that tax may conceivably fall under another item the widest interpretation should be given to the main item.
A reference may be made in this respect to the observations of their Lordships of the Supreme Court at page 88 of the case -- 'The State of Bombay v. Narottamdas Jathabhai', 1951 S.C 69 (AIR V 38) (C). The present tax is not on cinema exhibitors as such but on the exhibition of cinema films. Each exhibition is separately taxed and therefore it is clear that it is the entertainment which is being taxed and not the profession, trade or calling. I therefore hold that Article 276 of the Constitution is not offended by any provision of the impugned Act.
6. The second argument raised before us was that Article 14 of the Constitution was contravened by the provisions of Section 6(2) of the Act which gives the State Government unfettered power to exempt any show or class of shows or any proprietor or class of proprietors from the levy of the tax. Considered in the abstract this provision may be had because it enables the State Government to discriminate between individuals but this sub-section does not affect the powers of Government under the rest of the Act.
It has not been suggested that indiscrimination has been made and the petitioners cannot say that they have in any way been injured by the application of Section 6(2). The power to grant exemption does not affect the power to levy a tax and it is the power to levy tax which is being challenged before us and I therefore hold that anything in Section 6(2) does not invalidate the rest of the Act, nor does it invalidate the notification whereby the petitioners have been held liable to pay tax.
7. The third argument was somewhat specious. Mr. Grover contended that because there was a uniform rate of tax on all cinemas, proprietors who are earning less money were to pay the same tax as the proprietors earning a larger amount. This result may be inevitable but it cannot be said to offend the provision's of Article 14.
An American case Cumberland Coal Co. v. Board of Revision of Tax Assessment in Greene County, Pennsyvania, (1931) 284 US 23 (D), has really no relevance to the facts of the case before us. We do not know what were the exact powers which were conferred on the Legislative Authority by the Constitution. We do not know whether there was anything like the List of Items to the Seventh Schedule to the Constitution.
There is no such thing as an ideally just tax. Almost any kind of tax. affects a smaller businessman more adversely than his more fortunate rival, and the fact that a cinema which attracts a larger number of visitors has to pay the same tax as another to which very few individuals go is scarcely a reason for holding that Article 14 of the Constitution has been violated.
8. The last argument was that the petitioners had been adversely affected by the tax & therefore had not been able to follow their trade freely. Their rights under Article 19 have therefore been violated. This argument has only to be examined to be rejected. I can find nothing in the Act which can be construed into a measure restraining trade.
9. For the reasons given above this petition must fail and I would dismiss it with costs.
10. I agree.