Rajkamal Talkies and ors. Vs. the State of Maharashtra, - Court Judgment

Excerpt:
[n.k.patil ; u.s.kempanna jj.] this mfa is filed u/s 173(1) of mv act against the judgment and award dated: 21/02/2005 passed in mvc no. 2138/2003 on the file of tne iv addl. judge, member, mact, court of small causes, and bangalore (scch 6). partly allowing the claim petition for compensation and seeking enhancement of compensation with interest at 12% p.a. (per b.r. gavai, j.) :1. rule. rule made returnable forthwith. heard by consent.2. by way of present petition, the petitioners have challenged the resolutions passed by the respondent no.3 / municipal corporation, dated 8th february 2010 and 20th february 2010, thereby fixing the rate of theatre tax at the rate of rs. 100/- per show, in so far as cinema theatres are concerned.3. it is not in dispute, that all the petitioners before this court are running cinema theatres. it is the contention of the petitioners, that by the impugned resolutions, the rate of tax has been increased from rs. 15/- to rs. 100/- i.e. almost seven times. it is also the contention of the petitioners, that in view of section 149 of the bombay provincial municipal corporations act, 1949 (for short, hereinafter referred to as "bpmc act"), it is not permissible for the corporation to levy theatre tax unless rules are framed in that regard and a prior approval of the state government is taken for the said rules.4. mr. m.s. deshmukh, learned counsel appearing for respondent nos.3, 4 and 5 / municipal corporation, submits that the tax, which was earlier fixed by the erstwhile municipal council, was fixed in 1980 and since then, there is no increase in the tax. he, therefore, submits that the increase in the theatre tax from rs. 15/- to rs. 100/-, which is done after 30 years, cannot be said to be unreasonable.5. from the perusal of section 127 of the bpmc act and specifically clause 2(d) thereof, the authority of the corporation for imposing a theatre tax cannot be denied. however, it would be relevant to refer to section 149 of the bpmc act which reads thus:"procedure to be followed in levying other taxes : (1) in the event of the corporation deciding to levy any of the taxes specified in sub-section (2) of section 127, it shall make detailed provision, in so far as such provision is not make by this act, in the form of rules, modifying, amplifying or adding to the rules at the time in force for the following matters, namely :-(a) the nature of the tax, the rates thereof, the class or classes of persons, articles or properties liable thereto and the exemptions therefrom, if any, to be granted;(b) .....................................................(c) .....................................................(d) ....................................................(e) ....................................................provided that no rules shall be made by the corporation in respect of any tax coming under clause (f) of sub-section (2) of section 127 unless the state government shall have first given provisional approval to the selection of the tax by the corporation."perusal of section 149 would, thus, clearly reveal that in the event, the corporation decides to levy any tax as specified in sub-section 2 of section 127 of the bpmc act, the corporation is required to make a detailed provision, in so far as such provision is not made by this act, in the form of rules, modifying, amplifying or adding to the rules at the time in force for the matter specified in clauses "a" to "e". perusal of clause "a" of sub-section 1 of the said section would reveal that by the said rules, the nature of the tax, the rates thereof, the class or classes of persons, articles or properties liable thereto and the exemptions therefrom, if any, to be granted, has to be provided under the rules. proviso of sub-section 1 of section 149 would reveal that no such rules can be made by the corporation unless the state government has first given provisional approval to the selection of the tax by the corporation.6. it is, thus, imperative that unless rules are framed and a provisional approval has been granted to the selection of the theatre tax, by the state government, the levy of the tax which is sought to be imposed by the corporation, as theatre tax, would not be permissible in law. perusal of sub-section 2 of section 149 of the bpmc act would further reveal that rules are required to be submitted by the corporation to the state government and the state government may either refuse to sanction them or refer them back to the corporation for further consideration or sanction them either as they stand or with such modifications as it thinks fit. it is further to be noted from sub- section 3 of section 149, that any sanction given by the state government under sub-section 2 shall become operative on such date not earlier than one month from the date of the sanction as the state government shall specify in the order of sanction, and the corporation shall be competent to levy the tax. it is further to be noted that the corporation would be entitled to levy the tax covered by the sanction from the date so specified. sub-section 4 of section 149 provides that as far as practicable, the corporation and the state government shall take steps to see to it, that the date specified in the order of sanction is first day of april. sub-section 5 of section 149 also provides that the provisions of the said section shall also apply, in the event, any alteration is required to be made by the corporation in the rates fixed for any tax, or in the class or classes of persons, articles, etc.7. it can, thus, be clearly seen that section 149 of the bpmc act is a complete code in itself and it specifically provides as to in what manner the tax which is covered under sub-section 2 of section 127 is to be levied. a conjoint reading of the said provision would unequivocally lead to a conclusion that unless the rules are framed and provisional approval for selection of the tax is taken by the corporation, such a tax cannot be imposed. even thereafter, levy of the tax would be permissible after the state government grants its sanction and that too, from the date on which it specifies in its sanction order.8. in that view of the matter, we find that the levy of the tax which is sought to be imposed by the impugned resolutions would be without authority in law. needless to state, that no tax can be collected unless it is authorized by law.9. in the result, the petition succeeds and the same is allowed. rule is made absolute in terms of prayer clause "c". however, there shall be no order as to costs.

Judgment:
(Per B.R. Gavai, J.) :

1. Rule. Rule made returnable forthwith. Heard by consent.

2. By way of present petition, the petitioners have challenged the resolutions passed by the respondent no.3 / Municipal Corporation, dated 8th February 2010 and 20th February 2010, thereby fixing the rate of theatre tax at the rate of Rs. 100/- per show, in so far as cinema theatres are concerned.

3. It is not in dispute, that all the petitioners before this Court are running cinema theatres. It is the contention of the petitioners, that by the impugned resolutions, the rate of tax has been increased from Rs. 15/- to Rs. 100/- i.e. almost seven times. It is also the contention of the petitioners, that in view of Section 149 of the Bombay Provincial Municipal Corporations Act, 1949 (For short, hereinafter referred to as "BPMC Act"), it is not permissible for the Corporation to levy theatre tax unless rules are framed in that regard and a prior approval of the State Government is taken for the said rules.

4. Mr. M.S. Deshmukh, learned Counsel appearing for respondent nos.3, 4 and 5 / Municipal Corporation, submits that the tax, which was earlier fixed by the erstwhile Municipal Council, was fixed in 1980 and since then, there is no increase in the tax. He, therefore, submits that the increase in the theatre tax from Rs. 15/- to Rs. 100/-, which is done after 30 years, cannot be said to be unreasonable.

5. From the perusal of Section 127 of the BPMC Act and specifically Clause 2(d) thereof, the authority of the Corporation for imposing a theatre tax cannot be denied. However, it would be relevant to refer to Section 149 of the BPMC Act which reads thus:

"Procedure to be followed in levying other taxes : (1) In the event of the Corporation deciding to levy any of the taxes specified in sub-section (2) of section 127, it shall make detailed provision, in so far as such provision is not make by this Act, in the form of rules, modifying, amplifying or adding to the rules at the time in force for the following matters, namely :-

(a) the nature of the tax, the rates thereof, the class or classes of persons, articles or properties liable thereto and the exemptions therefrom, if any, to be granted;

(b) .....................................................

(c) .....................................................

(d) ....................................................

(e) ....................................................

Provided that no rules shall be made by the Corporation in respect of any tax coming under clause (f) of sub-section (2) of section 127 unless the State Government shall have first given provisional approval to the selection of the tax by the Corporation."

Perusal of Section 149 would, thus, clearly reveal that in the event, the Corporation decides to levy any tax as specified in Sub-Section 2 of Section 127 of the BPMC Act, the Corporation is required to make a detailed provision, in so far as such provision is not made by this Act, in the form of rules, modifying, amplifying or adding to the rules at the time in force for the matter specified in Clauses "a" to "e". Perusal of clause "a" of Sub-Section 1 of the said Section would reveal that by the said rules, the nature of the tax, the rates thereof, the class or classes of persons, articles or properties liable thereto and the exemptions therefrom, if any, to be granted, has to be provided under the rules. Proviso of Sub-Section 1 of Section 149 would reveal that no such rules can be made by the Corporation unless the State Government has first given provisional approval to the selection of the tax by the Corporation.

6. It is, thus, imperative that unless rules are framed and a provisional approval has been granted to the selection of the theatre tax, by the State Government, the levy of the tax which is sought to be imposed by the Corporation, as theatre tax, would not be permissible in law. Perusal of Sub-Section 2 of Section 149 of the BPMC Act would further reveal that rules are required to be submitted by the Corporation to the State Government and the State Government may either refuse to sanction them or refer them back to the Corporation for further consideration or sanction them either as they stand or with such modifications as it thinks fit. It is further to be noted from Sub- Section 3 of Section 149, that any sanction given by the State Government under Sub-Section 2 shall become operative on such date not earlier than one month from the date of the sanction as the State Government shall specify in the order of sanction, and the Corporation shall be competent to levy the tax. It is further to be noted that the Corporation would be entitled to levy the tax covered by the sanction from the date so specified. Sub-Section 4 of Section 149 provides that as far as practicable, the Corporation and the State Government shall take steps to see to it, that the date specified in the order of sanction is first day of April. Sub-Section 5 of Section 149 also provides that the provisions of the said Section shall also apply, in the event, any alteration is required to be made by the Corporation in the rates fixed for any tax, or in the class or classes of persons, articles, etc.

7. It can, thus, be clearly seen that Section 149 of the BPMC Act is a complete Code in itself and it specifically provides as to in what manner the tax which is covered under Sub-Section 2 of Section 127 is to be levied. A conjoint reading of the said provision would unequivocally lead to a conclusion that unless the rules are framed and provisional approval for selection of the tax is taken by the Corporation, such a tax cannot be imposed. Even thereafter, levy of the tax would be permissible after the State Government grants its sanction and that too, from the date on which it specifies in its sanction order.

8. In that view of the matter, we find that the levy of the tax which is sought to be imposed by the impugned resolutions would be without authority in law. Needless to state, that no tax can be collected unless it is authorized by law.

9. In the result, the petition succeeds and the same is allowed. Rule is made absolute in terms of prayer clause "C". However, there shall be no order as to costs.