IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 07.04.2010 CORAM: THE HONOURABLE MR. JUSTICE M.JEYAPAUL W.P.No.19432 of 2003 & M.P.No.24261 of 2003 M/s. Aruna Theatre, Rep. By its Proprietor, Arunachalam, Oddanchathiram, Dindigul District. ... Petitioner Vs The District Collector, Dindigul District, Dindigul. ... Respondent Prayer:- Writ petition filed under Article 226 of The Constitution of India praying for the issuance of a Writ of Certiorari to call for the records pertaining to the impugned order of the respondent passed in Na.Ka.No.C1/43772/01-30, dated 22.06.2003 and to quash the same. For petitioner : Mr.K.P.M.Shankar For Respondent : Mr.D.Srinivasan Additional Government Pleader - - - O R D E R
The petitioner-theatre was inspected by the Commercial Tax Officials on 12.11.2001. The inspecting officials from Commercial Tax Department found that the petitioner-theatre accommodated an excessive viewers and the petitioner also failed to maintain daily collection register.
2. On receipt of notice from the Commercial Tax Department, the petitioner came forward to compound the offence. A sum of Rs.1,000/- for each count was paid by the petitioner after compounding the offences.
3. The respondent issued a show-cause notice invoking the provisions under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955, calling for explanation as to why the licence of the petitioner shall not be revoked or suspended by the respondent, as the petitioner was permitted to compound the offence under Section 15 of the Tamil Nadu Entertainments Tax Act, 1939.
4. The respondent having adverted to the explanation given by the petitioner, passed the impugned order suspending ‘C’ ‘Form Licence for 5 days viz., 15.07.2003 to 19.07.2003 under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955. The said order passed by the respondent is under challenge before this court.
5. Heard the submissions made on either side.
6. The learned counsel appearing for the petitioner would submit drawing attention of this Court to Section 8 A (2) of the Tamil Nadu Cinemas Regulation Act, 1955 that once an offence under the Tamil Nadu Entertainments Tax Act, 1939 is compounded, no further proceedings shall be taken as against the licensee, in respect of the offences which was permitted to be compounded. He would further submit that the explanation given by the petitioner to the show-cause notice was also not properly considered by the respondent. Referring to the judgment of this court, he further submitted that mere compounding of the offence by the prescribed authority under Section 15 of the Tamil Nadu Entertainments Tax Act, 1939 cannot be a ground for suspending the license by the licensing authority.
7. The learned Additional Government Pleader appearing for the respondent would submit that Section 8A (2) of the Tamil Nadu Cinemas Regulation Act, 1955 would apply only in a case where further criminal prosecution is undertaken by the licensing authority even after the offence was compounded. He would submit that the specific provision under Section 9(1) of the said act gives ample power to the licensing authority to revoke or suspend the license, even in a case where the petitioner was permitted to compound the offence. He would further submit that the licensing authority after giving sufficient opportunity to the licensee, drawing his attention to the offence already compounded, is entitled to revoke or suspend the licence.
8. There is no dispute with regard to the fact that the petitioner-theatre was charged with the offence of evasion of entertainment tax, on the ground that the petitioner failed to maintain daily collection register and chose to accommodate excessive viewers. The petitioner was permitted to compound the offence and pay sum of Rs.1,000/- for each count.
9. Section 8A (2) of the Tamil Nadu Cinemas Regulation Act, 1955 reads that when a offence has been compounded , the offender shall be discharged if he has been in custody and no further proceedings shall be taken against him in respect of such offence. The aforesaid provision, in fact, prohibits the licensing authority from prosecuting further the offender who was already permitted to compound the offence in respect of the offence charged as against him. It has nothing to do with the consequential proceedings contemplated under Section 9(1) of the said Act.
10. Section 9(1) of the said Act would read without giving any scope of ambiguity that the license of the licensee who has been permitted to compound an offence under Section 15 of the Tamil Nadu Entertainments Tax Act, 1939 may also be revoked or suspended by the licensing authority.
11. The revocation or suspension of the license by the licensing authority is consequent upon the permission granted to the holder of the license to compound the offence. Of course, the licensee shall not face further prosecution for the very same offence committed by him, once he was permitted to compound the offence.
12. The learned counsel appearing for the petitioner refers to a decision of this Court in the Licensee, Bhuvaneswari Talkies, Gudiyatham Vs. The Appellate Authority and Joint Commissioner-I, Land Administration Department, Madras -5 and others reported in 1999(1) CTC 266 wherein it has been held as follows:-
“Hence, the powers conferred on the prescribed authority under Section 15 of the Tamil Nadu Entertainments Tax Act, 1939, is not similar to that of the powers conferred on the licensing authority under Section 9 of the Tamil Nadu Cinemas Regulation Act, 1955. Section 15 of the Tamil Nadu Entertainment’s Tax Act, 1939, authorises the prescribed authority to compound the offence even on the basis of reasonable suspicion. But, under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1939, the licensing authority is not authorised to revoke or suspend the license, merely on the basis of such reasonable suspicion; on the other hand, the licensing authority is under a statutory obligation to give a reasonable opportunity to the licensee to show cause against the revocation and suspension; hold an enquiry; consider the explanation and pass orders, after giving a finding based on reasons for such revocation and suspension, if so required. In other words, the mere compounding of the offence by the prescribed authority under Section 15 of the Tamil Nadu Entertainments Tax Act, 1939, cannot, by itself, be a ground for the licensing authority to revoke or suspend the license, while exercising the power under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955, particularly when the licensee had offered his explanation.”
13. The licensing authority cannot straight away revoke or suspend the license invoking the provisions under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955, just because there was compounding of the offence by the prescribed authority under Section 15 of the Tamil Nadu Entertainments Tax Act, 1939. After affording reasonable opportunity given to the licensee, who was permitted to compound the offence, the licensing authority can very well resort to revocation or suspension of the license under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955. Of course, the licensing authority is bound to consider the explanation given by the licensee while revoking or suspending the license under 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955. At any rate, this Court in the aforesaid decision does not hold that the licensing authority has no power to revoke or suspend the license under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955, in the aftermath of compounding of the offence by the prescribed authority. The statute obligation reiterated in the aforesaid decision is that the licensing authority is bound to give a reasonable opportunity to the licensee to show-cause against the revocation or suspension proposed under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955.
14. Coming to the order impugned, it is found that the petitioner was given an opportunity to show-cause why his license shall not be revoked or suspended, as he was permitted to compound the offence. An explanation was submitted by the petitioner and the same was considered by the licensing authority. The licensing authority having come to the decision that the failure on the part of the licensee in not maintaining the daily collection register and the accommodation of excessive viewers has caused revenue loss to the Government, chose to suspend the ‘C’ form license just for 5 days from 15.07.2003 to 19.07.2003. Therefore, it is not as if the petitioner was not given an opportunity to explain his position and that the explanation given by the petitioner was not considered by the licensing authority.
15. In view of the above facts and circumstances, the Court finds that the impugned order was passed only in accordance with law by the respondent invoking the provisions under Section 9(1) of the Tamil Nadu Cinemas Regulation Act, 1955. Therefore, the writ petition fails and it stands dismissed. There is no order as to costs.
r n s
To
The District Collector,
Dindigul District,
Dindigul