T. Ramabhadran, J.C.
1. This writ petition, under Article 226 of the Constitution, arises under the following circumstances:--The petitioner is the sole owner of a cinema coacein, styled as 'Krishna Talkies,' situated at Mandi. He is engaged in exhibiting talkie films for the entertainment of the public, admission being regulated by tickets.
On 19-7-1956, by means of a notification, purporting to be one under Section 62(6a) of the Punjab Municipal Act, 1911, as applied to Himachal Pradesh, the Municipal Committee of Mandi, with the previous sanction of the Lieutenant-Governor, Himachal Pradesh, imposed a show tax of Rs. 2/-per show on the petitioner with effect from 20-10-1956.
2. The petitioner's contention is two-fold:--(A) The imposition of the tax was illegal, ultra vires and unconstitutional. (B) In any case, the Municipal Committee could not recover more than Rs. 250/- per annum, from the petitioner, by way of show tax, having regard to the limit laid down in Article 276(2) of the Constitution.
3. Against the levy of the tax, the petitionerfiled an appeal to the Deputy Commissioner ofMandi under Section 84 of the Act. The same was,however, rejected on 13-11-1957. Hence, this petition under Article 226 of the Constitution, whereinI am requested, firstly, to restrain the respondentsfrom levying the show tax on the ground that itwas illegal and ultra vires, and secondly in the(sic)ing more than Rs. 250/- per annum, by way of show tax.
4. Notice of this petition was issued to the respondents. They have both filed written statements, challenging the petitioner's contentions. Their case is that the tax was rightly imposed and levied and the limit laid down in Article 276 of the Constitution would not apply, because the show tax is not a tax on professions or callings, but is a tax on business.
5. Arguments of the learned counsel for the parties were heard at Mandi on the 25th instant. For reasons to be stated shortly, I have come to thei conclusion that while such a tax could validly be imposed, it would amount to a tax on professions and accordingly, cannot exceed Rs. 250/- per annum. I shall deal with these two points seriatim.
6. (A). Mr. Kedar Ishwar for the petitioner invited my attention to Articles 79, 200, 239 and 240 of the Constitution as well as Secs. 3, 21, 24, and 26 of the Government of Part C States Act, 1951. Learned counsel submitted that while in the Punjab (as in other former Part A States), a Municipal Committee, with the previous sanction of the State Government, could impose any other tax, which the State Legislature had power to impose under the Government of India Act 1935 (vide S. 61(2), Punjab Municipal Act in the former Part C State of Himachal Pradesh, financial bills, involving the imposition of any tax could not be introduced, except on the recommendation of the Chief Commissioner and when such a bill has been passed by the Legislative Assembly, it had to be presented to the Chief Commissioner, who had to reserve the same for the consideration of the President.
The President could declare either that he assented to the Bill or he withheld the assent therefrom, vide Ss. 24 and 26 of the Government of Part C States Act, 1951. From this, I was requested to hold that since the Legislative Assembly of Himachal Pradesh had no absolute power to impose a tax, like the present show tax, the Municipal Committee of Mandi could not impose the show tax at Rs. 2/- per show even with the previous approval of the Lieutenant-Governor, Himachal Pradesh. In this connection, reliance was placed on Satya Dev Bushahri v. Padam Dev AIR 1954 S.C. 587, wherein their Lordships of the Supreme Court observed as follows:
'The President, who is the executive head of the Part C States does not function as the executive head of the Central Government, but as the head of the State under powers specifically vested in him under Article 239. The authority conferred under Article 239 to administer Part C States has not the effect of converting those States into the Central Government. Under Article 239, the President occupies in regard to Part C States, a position analogous to that of a Governor in Part A States and of a Rajpramukh in Part B States. Though the Part C States are centrally administered under the provisions of Article 239, they do not cease to be States and become merged with the Central Government.'
Learned counsel for the respondent No. 2 (Municipal Committee of Mandi) pointed out that, when the provisions of the Punjab Municipal Act, 1911, were applied to Himachal Pradesh on 25-12-1948, vide Government of India, Ministry of States Notification No. 386, IB of the same date, it was made clear that the provisions were to apply to this territory with such modifications as were necessary, under the circumstances. Reliance was placed on the following passages in the Notification:--
'The enactments specified in the schedule to this order shall apply to Himachal Pradesh subject (sic) to which the enactments are, for the time being, generally subject in the territories to which they extend.'
'Any Court may construe the provisions of any enactment rule, regulations, general order or bye-law, with such modifications, not affecting the substance, as may be necessary or proper in the circumstances.'
Accordingly, he submitted that in construing the provisions of Section 61(2), Municipal Act the peculiar position of the Himachal Pradesh as a Part C State should not be lost sight of. In other words, I was requested to hold that the Municipal Committee of Mandi had power to impose any other tax with the previous sanction of the Lieutenant-Governor, Himachal Pradesh which the Legislative Assembly of Himachal Pradesh could impose, after following the proper procedure laid down in the Government of Part C States Act, 1951.
I find considerable force in this argument; To hold otherwise would be to render the provisions of Section 61(2), Municipal Act meaningless in Himachal Pradesh. It is important to remember that under the scheme laid down in the Part C States Act, 1951, the Legislative Assembly of Himachal Pradesh was riot totally debarred from passing legislation imposing a tax. It could Co so, provided the proper procedure was adopted, i.e. the Bill could only be moved on the recommendation of the Chief Commissioner.
After it had been passed, the Chief Commissioner had to reserve the Bill for the consideration of the President and the latter had the option of either assenting to the Bill or withholding assent to the Bill. Learned counsel for the respondents pointed out that the tax in question is covered by List II of the Seventh Schedule to the Constitution (see items 60 and 62).
I shall presently consider the question as to whether this tax falls under item 60 or 62, Suffice it to say that the Legislative Assembly, Himachal Pradesh, was competent to levy this tax, after following the proper procedure. My attention was invited to Cantonment Board Poona v. Western India Theatres Ltd.. AIR 1954 Bom. 261, where a Division Bench of that High Court had occasion to remark:
'The word 'entertainments' in Item 50 is not controlled by the word 'luxuries.' 'Entertainments' is used as a common noun and not an abstract one. So used, it means, in the case of a cinema, a show. Thus a Provincial Legislature can, by virtue of Item 50, validly make a provision in an enactment authorising a municipality to levy a tax upon shows given at the cinemas located within its limits. And such a tax when levied by the municipality can be collected from the proprietor of the cinema show.'
This directly supports the case of the respondents, as far as the validity of the levy of the tax is concerned. The nature of the tax will be considered later.
Under these circumstances, I am unable to accept the petitioner's contention that the imposition of the tax was illegal or ultra vires of the Constitution.
7. (B). In the next place, learned counsel for the petitioner submitted that the so-called show tax has nothing short of a tax on the petitioner's profession and, consequently, it cannot exceed Bs. 250/- per annum, vide Article 276(2) of the Constitution. He pleaded that the tax was inseparable from the petitioner's profession which is that of exhibiting talkie films to the public, who had to purchase tickets to gain admission to the Cinema Hall. It is nobody's case that the show tax was being collected from the audience. Reliance was placed by Mr. Kedar Ishwar on the following authorities
(i) Shrikrishna Shaligram v. Municipal Committee, Ujjain, AIR 1953 Madh. Bha. 145. There, a Division Bench of the Madhya Bharat High Court held that:
'It is clear, therefore, that though Article 276 lays down a tax imposed by a State for the purpose of a Municipality on a calling shall not be invalid on the ground that it relates to a tax on income, every Legislation relating to such a tax cannot ignore the provisions of Clause (2) of the said Article. There must be something either in the language of such Legislation or in the circumstances or manner of the imposition of the tax, which makes it clear that the liability of one person to pay taxes on professions, trades and callings to any one Municipality shall not exceed the sum of Rs. 250/- per annum. It was frankly conceded by the learned Advocate-General, who appeared for the Ujjain Municipality that the imposition of the said performance tax under consideration was open to this criticism. In the absence of any such restriction as is contemplated by Article 276. Cl. (2), the Notification under which the tax in question has been imposed makes a person liable to pay sums far exceeding Rs. 250/-per annum. To take a concrete illustration, if any one of the applicants before us displays in his cinema house one or more shows for one hundred days in a year, he will be liable to pay Rs. 500/- under the said Notification. That the tax in question was open to this criticism was further admitted in the return filed on behalf of the Ujjain Municipality.'
(ii) Western U.P. Electric Power and Supply Co Ltd., Etawah v. Town Area, Taswant Nagar (S) AIR 1957 All 433. There, a Division Bench of that High Court observed that:
'An obvious distinction exists between a tax on trades, callings or professions and a tax on income arising from a trade, calling, or profession. If a tax is imposed on a trade, calling or profession, it will have to be paid by any person practising that trade, calling or profession, whether he derives any income from it or not. It will be a tax on the trade, calling or profession itself. Such a tax may certainly be called a tax in respect of professions, trades, or callings but it cannot by any means be said that it relates to a tax on income.'
It is noteworthy that the petitioner has to pay the show tax every time a show is given, even if cinema hall be empty, i.e., he derives no income from that show.
8. As against this learned counsel for the respondents cited Kantilal Chatrabhuj Shah v. Patiala Municipality, (S) AIR 1955 Sau. 90. There, a Division Bench of that High Court had occasion to point out that :
'The true test for determining, whether a particular tax is a tax on 'calling' referred to in Article 276 or the tax on 'entertainments' under Item 62 of the State List is to ascertain the incidence of the tax. If the incidence falls on the person because he is engaged in the business of providing the entertainment for profit, it is a tax on his calling, but if the incidence of the tax calls on the particular entertainment, irrespective of whether the person, providing the entertainment follows that calling or not, then it is a tax on enterainment and falls within Item No. 62 of the State List and as such will not be hit by Article 276. If for instance the tax is to be paid on a cinema show irrespective of whether it is given by a professional exhibitor or by one following a different calling e.g. by a charitable society to raise funds for a charity, it is obvious that the tax can only be regarded as a tax on entertainment, and not a tax on calling, for what is taxed is not the calling of the person providing the entertainment but the entertainment itself.'
9. As the learned counsel for the petitioner rightly pointed out, the Municipal Committee has not adduced any evidence or cited a single instance to establish that the show tax has been collected from all persons, giving cinema shows irrespective of whether the person providing the shows does so as a profession or not.
On the other hand, the incidence of taxation has fallen exclusively on the petitioner. Mr. Kedar Ishwar for the petitioner further urged--and in my opinion with considerable force--that it was an inseparable part of the petitioner's profession to exhibit talkie films, i.e. if he did not exhibit such films, his profession would come to an end.
Judged by this criterion, I feel that the so-called show tax does amount to a tax on profession, as contemplated by Item No. 60 of List II of the Seventh Schedule to the Constitution. Therefore, under Article 276(2) of the Constitution, the total amount payable by the petitioner as 'show tax' to the Municipal Committee, Mandi cannot exceed Rs. 250/- per annum. To this extent, the petitioner is entitled to relief.