K. Veeraswami, J.
1. This petition is to quash the orders of the second respondent dated 23rd March, 1965, confirming the order of the first respondent dated 5th June, 1964, assessing the petitioner, on best judgment, to entertainment tax and surcharge in respect of a sum of Rs. 3,000 determined to be the entertainment collections made on 3rd May, 1964. The cinema was exhibited on certain other days as well, but we are not concerned with them, as this petition is confined only to the orders we mentioned. The validity of the orders are assailed on three grounds; (i) infraction of natural justice, (ii) the exhibition, including the cinema, did not amount to an entertainment, within the meaning of the Entertainment Tax Act and (Hi) in any case, the Madras Local Authorities Finance Act, 1961, is ultra vires. As we consider the first point is well-founded, it is unnecessary to decide the other two points.
2. Licence for the cinema shows was granted with the express condition that there should be a separate entrance and admission should be free. But the Entertainment Tax Officer found that there was no separate entrance provided and that no one without a ticket on payment of 15 paise at the entrance to the Exhibition, was admitted to the cinema show. That view he formed, as he expressly mentioned in his order, on enquiries made by him. No ground about the infraction of natural justice was taken in the appeal, but it seems to have been urged before the Commercial Tax Officer, as is evident from his order. He made reference to the statements of certain persons and recorded:
The assessing officer did not, as contended by the appellant, reveal the source of enquiries made by him and given them an opportunity to rebut if they so desired to do so. Now the point for consideration is whether the Entertainment Tax Officer's failure to do so will vitiate the proceedings taken by him. I am inclined to hold that it will not....It was within his discretion to reveal or not to reveal the enquiries made by him as the film show already stands to be proved as an ' Entertainment.' However, non-disclosure of these enquiries do not in any way vitiate the proceedings but the Entertainment Tax Officer could have boldly put it out to them as there was nothing shy to feel about it.
It is hardly necessary to say that the view of the Commercial Tax Officer, expressed in these terms, cannot be sustained. He seems to have misconceived the requisites of a quasi-judicial proceeding, like assessment to Entertainment Tax. The materials collected by the Department behind the back of the assessee may well be used by the Department to initiate proceedings, but cannot be used, in such proceedings, to the prejudice of the assessee unless he has been given a proper and reasonable opportunity of answering such materials. The assessee can do so, only if he was fully informed of the materials which the Department proposed to use against him and given a reasonable time to think out his defence and make his objections. If statements of witnesses had been recorded, which were proposed to be used against the assessee in the proceedings, and the assessee asked for an opportunity to cross-examine those witnesses, it is part of the requisites of natural justice that such cross-examination should be allowed. There is no discretion vested in the Department on this matter, as the Commercial Tax Officer wrongly conceived. The defective procedure adopted in this case undoubtedly vitiated the orders of the Entertainment Tax Officer as well as the Commercial Tax Officer. They are, therefore, quashed.
3. The petition is allowed. The Entertainment Tax Officer will be at liberty to re-assess the petitioner; if he so chose, after giving him a reasonable opportunity, as indicated in our orders. We may observe that we do not express any opinion on the other two points raised by the petitioner. The petitioner is entitled to his costs. Counsel's fee Rs. 100.