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P. Muthalagu Vs. the Collector of Tiruchirapalli and ors. - Court Judgment

LegalCrystal Citation
SubjectMedia and Communications
CourtChennai High Court
Decided On
Reported in(1972)2MLJ42
AppellantP. Muthalagu
RespondentThe Collector of Tiruchirapalli and ors.
Excerpt:
- .....as it were, a ban on persons convicted for an offence under clause (a) or (c) of section 14 of the madras entertainment tax act, 1939, from applying for a licence under the madras cinemas (regulation) act, unless a period of two years has elapsed since his conviction. apart from the creation of a statutory ban in the matter of applying for a licence, section 3-a does not state ' any further principle for disqualification. on the other hand, section 5, dealing with the restrictions on the powers of the licensing authority in the matter of the grant of licences for cinematographic exhibitions, lays down certain guidelines which ought to prevail with the licensing authority and which have to be necessarily considered by him while dealing with such applications. inter alia, the matters to.....
Judgment:
ORDER

T. Ramaprasada Rao, J.

1. The petitioner and the third respondent applied for the issue of no-objection certificate to conduct a touring cinema in Perambalur Taluk, Tiruchirapalli district. It is common ground that the petitioner's application was earlier and the third respondent's application was later. If other circumstances were equal, the petitioner ought to have been preferred as he in point of time was the earlier applicant and as the site chosen by the third respondent, in relation to the petitioner's site, was within the prohibited distance. But the petitioner's application was rejected by the Collector in the first instance on the ground that as a past Manager of a Touring Cinema which belonged to his brother-in-Law, the petitioner's conduct disclosed that in relation to the payment of entertainment tax there was an attempted evasion since the petitioner encouraged the sale of duplicate tickets during the shows conducted at the theatre belonging to his brother-in-Law. The Entertainmsnt Tax Officer, who is the Commercial Tax Officer of the division, was by then in seisin of the matter and the assessing authority found that there was such evasion. The matter was, however, taken up in appeal and the said appeal before the appellate authority under the Entertainment Tax Act was pending. During the pendency of the said appeal, the petitioner filed an appeal against the order of the Collector refusing the grant in his favour on the only ground that his antecedents were not satisfactory. The Board set aside the order of the Collector on the ground that the appeal before the Commercial Tax Officer was by then finding and it would be unsafe to reject or finally dispose of the implication for the grant made by the petitioner on the foot that his antecedents were bad, since that question was being agitated in the appellate Court and no one was sure of the result by then. But, while disposing of the matter, the Board observed that the Collector should await the findings of the Joint Commercial Tax Officer in the remanded enquiry with respect to not only the alleged sale of duplicate tickets, but also the personal responsibility of the petitioner. It appears that the appellate authority remanded back the subject once again for disposal by the Joint Commercial Tax Officer. It was this which was noticed by the Board in its order. The observation of the Board that the Collector should take note of any finding as to personal responsibility of the petitioner, is pressed very much into service in this proceeding.

2. After remand, the Collector was satisfied that the Joint Commercial Tax Officer held that there was evasion of tax by using duplicate series of tickets and that there was evasion cf entertainment tax to the extent of Rs. 1,501-8-4. After having satisfied himself that the Commercial Tax Officer so dealt with the delinquent proprietor under the Entertainment Tax Act, he was of the view that the petitioner as Manager of the Talkies belonging to his brother-in-Law was co-extensively responsible for it and viewed in that light his antecedents* according to the Collector, were proved to be not satisfactory. He also found that the local Panchayat did not recommend the application of the petitioner. On all these grounds and as a. licence to run a cinematographic exhibition should be given to persons of integrity and not to those who resort to dishonest practice, he rejected the petitioner's application. The appeal of the petitioner to the Board of Revenue was unsuccessful. This time, however, the Board found that the proprietor of a cinema theatre includes a Manager as well and as the Manager (petitioner) was admittedly in charge of the day-today administration of his brother-in-Law's theatre, his conduct in having evaded the entertainment-tax was a relevant consideration, and in that view, held that his antecedents were bad and agreed with the Collector and dismissed the appeal. It is as against this the present writ petition has been filed.

3. Mr. Chidambaram, the learned Counsel for the petitioner, raises two interesting points. The first one is that Sections 3-A and 5(1)(b) of the Madras Cinemas (Regulation) Act, 1955, are mutually exclusive and the word 'antecedents' appearing in Section 5(1)(b) should be understood de hors the disqualification mentioned in Section 3-A, and thus interpreted, the rejection of the application of the petitioner for the grant is not warranted in Law. His second contention is that under the Madras Enteitainments Tax Act of 1939 even though the expression 'proprietor' might include in its fold a Manager of the cinema theatre concerned, yet as there is no finding involving the petitioner personally in the matter of evasion of entertainment tax and as he was admittedly not convicted under Section 14 of the Act, the reasoning of the Board as well as the Collector is vitiated.

4. As regards the first contention, I am unable to agree. Section 3-A is an enabling provision which prescribes, as it were, a ban on persons convicted for an offence under Clause (a) or (c) of Section 14 of the Madras Entertainment Tax Act, 1939, from applying for a licence under the Madras Cinemas (Regulation) Act, unless a period of two years has elapsed since his conviction. Apart from the creation of a statutory ban in the matter of applying for a licence, Section 3-A does not state ' any further principle for disqualification. On the other hand, Section 5, dealing with the restrictions on the powers of the licensing authority in the matter of the grant of licences for cinematographic exhibitions, lays down certain guidelines which ought to prevail with the licensing authority and which have to be necessarily considered by him while dealing with such applications. Inter alia, the matters to which regard should be had by the licensing authority are, as provided in Section 5(1)(b) of the Act, the status, antecedents and the previous experience of the applicant. The word 'antecedents' in this Sub-clause has been inserted by the Amending Act XX of 1964, which also brought in Section 3-A into the statute. The word 'antecedents' means something relatable to a thing which has happened or which has preceded or a circumstance which has so preceded or happened. The argument of Mr. Chidambaram is that the word 'antecedents' does not have any relation to the disqualification mentioned in Section 3-A but it should be understood as something Which is not covered by Section 3-A as such. This is an extreme contention. As already stated by me, Section 3-A imposes a ban on persons convicted for offences in the matter of evasion of tax from applying for a licence within a period of two years. If a person was indeed convicted for an offence under Section 14, Clause (a) or (c) of the Madras Entertainments Tax Act, it is certainly a circumstance or an incident which has happened and which cannot be screened from being comprehended or appreciated if it becomes necessary at any future point of time even beyond the period of two years stated in Section 3-A. For instance if A is convicted for an offence under Clause (a) or (e) of Section 14 in the year 1970, he cannot apply for a licence till the expiry of 1972. Thereafter, if he applies for a licence under the Madras Cinemas (Regulation) Act, that does not mean that his previous history that he evaded tax or that he admitted a person for payment to any place of entertainment in contravention of Section 6 can be ignored by the licensing authority while deciding whether to grant or to refuse a licence to him under the Act. The expression 'antecedents' in Section 5(1)(b) enables the licensing authority to peep into the earlier circumstances connected with the conduct of the individual and have regard to that matter as well, to find ultimately whether a grant should be made in his favour or not. In this view of the matter, the word 'antecedents' cannot be understood as being circumscribed or being governed by the principle or hypothesis mentioned in Section 3-A of the Act. Both Sections ere mutt ally exclusive and are operative in their respective fields without the one having an impact on the other.

5. The Board of Revenue, in its first order, in my view, did not correctly appreciate the purport and intendment of Section 5(1) of the Madras Cinemas (Regulation) Act, 1955. Whilst the Board rightly said that the delinquency of the proprietor can be extended to that of the Manager, it made a very casual observation that unless the Manager is personally made responsible for the offences contemplated under the Madras Entertainments Tax Act, he would not be a person whose antecedents could be said to be unsatisfactory. I am unable to agree with this explanation.

6. Section 3(9) of the Madras Entertainments Tax Act defines a 'proprietor' in relation to any entertainment, as one including any person responsible for the management thereof. In the instant case, the petitioner was admittedly the Manager of the quondam talkies which was found to have evaded tax by selling duplicate tickets. It is not also in dispute that the petitioner was in charge of the administration of the said theatre. In those circumstances and having regard to the definition of the word 'proprietor' in the Act, it is unnecessary that a finding as to the personal involvement of the Manager in the delinquency should be separately given by the officers functioning under the Madras Entertainment Tax Act and that such a finding alone could be taken into consideration for purposes of assessing the antecedents of the Manager. The definition of 'proprietor' is wide enough to take the delinquency of either the proprietor or the Manager or both into consideration when the said person applies for a grant beyond the prohibited time and when such an application for grant is dealt with under Section 5 by the licensing authority. The second order of the Board of Revenue, which is the chalenged order, rightly, therefore, appreciated the position and observed that having regard to the definiton of 'proprietor', the evasion of tax by persons responsible for the conduct of the theatre belonging to the brother-in-Law of the petitioner is a relevant circumstance in deciding whether the petitioner's antecedents are good enough for the grant of a no-objection, certificate.

Now that I find that t he Board of Revenue and the Collector of the district were right in having interpreted the word antecedents and had taken the petitioner as a delinquent in the sense that he was also impliedly or vicariously responsible for the evasion of tax, and that such a previous incident is a relevant circumstance, I am unable to find any error of jurisdiction or apparent error of Law in the order challenged.

8. The writ petition, is, therefore, dismissed.

There will be no older as to costs.


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