New Delhi: The Supreme Court has held that States cannot levy different rates of entertainment tax on feature films screened in the State on the basis of language.

Giving this ruling while quashing a notification issued by the Andhra Pradesh Government, a Bench of Justice S.B. Sinha and Justice Markandeya Katju said "the purported classification only on the basis of language without anything more and in particular having regard to the difference in the rate of tax, is ex-facie arbitrary."

10 per cent tax

The notification issued under the Andhra Pradesh Entertainment Tax Act in 2002 provided for levy of 10 per cent entertainment tax on Telugu films and 24 per cent on films produced and screened in other languages.

Aashirwad Films, Hindi film distributor of Hyderabad, challenged the notification contending that it was discriminatory and ultra vires Article 14 of the Constitution (equality before law).

Allowing the writ petition with Rs. 50,000 costs, the Bench said, "it is not the case of the respondent [AP government] that the imposition of different rates of entertainment tax is justified on any ground other than language. Entertainment of a person may not wholly depend on the language of the film he sees. A film may be produced in one language and may be dubbed in another. Even within a State, people belonging to different regions may speak different languages, although the State language may be one."

Without dispute

Writing the judgment, Justice Sinha said: "It has been accepted without dispute that taxation laws must also pass the test of Article 14 of the Constitution. It has been laid down in a large number of decisions of this court that a taxation statute for the reasons of functional expediency and even otherwise, can pick and choose to tax some but the classification thus chosen must be reasonable."

The Bench said "objectives in a statute may have a wide range. But the entire matter should also be considered from a social angle. It cannot be the object of any statute to be socially divisive in which event it may fall foul of the broad constitutional scheme enshrined under Articles 19 (protection of certain rights regarding freedom of speech etc), 21 (right to life and liberty) as also the preamble of the Constitution."

Separate class

The Bench said "it has not been explained as to whether cinema theatres exhibiting Telugu films suffer from any disadvantage. It has not been shown as to why the same theatre where films in different languages are exhibited would be a class apart, only because at different times [the theatre] exhibits films produced in different languages. Moreover, how Telugu films have been treated as a separate class has not been stated."

"The impugned levy cannot be sustained being discriminatory in nature", the Bench held and struck down the notification.

Printer friendly page  
Send this article to Friends by E-Mail