The Madras High Court on Friday ordered notice to the State government authorities on a petition seeking to quash a “purposely vague and ambiguous” May 2014 circular of the Commercial Taxes Department relating to exemption of certain films from entertainment tax.
The petitioner said the government itself should fix the admission rates in each class in theatres.
In case of tax exemption, the reduced price of admission rates should be printed on the tickets containing the seal of the Entertainment Tax Officer.
Justice S. Vaidyanathan ordered that the notice would be returnable by February 27.
The petitioner, K.J. Saravanan of Nandanam, an advocate, submitted that whenever the government announced exemption of entertainment tax, it was a certification for viewers that the film was one that promoted Tamil culture and language.
It was widely published that the film ‘Kayal’ had been exempted from entertainment tax. But, INOX theatre where the film was being screened did not extend the benefit of tax exemption to the viewers. When a ticket cost Rs. 120, after deduction of entertainment tax the theatre should have collected only Rs. 83.30 as admission rate. But Rs. 120 was collected per ticket.
A circular of the Commercial Taxes Department of May 6 last year stated that theatre owners should not collect entertainment tax from viewers in case of exempted movies.
The petitioner submitted that the circular was vague and did not clarify the issue as to whether the admission fee fixed by the authorities was inclusive of entertainment tax.
P. Wilson, senior counsel, submitted that when the government exempted a movie from entertainment tax, the benefit should go to the viewers.
The impugned circular enabled theatre owners to automatically increase the admission rate to the maximum sum in the event of exemption from tax. This was illegal and should be quashed.
It enables theatre owners to increase rates to the maximum for such films. This is illegal and must be quashed.
