HC adjourns hearing of case on entertainment tax benefit

The Madras High Court today adjourned for further hearing an appeal challenging a single judge's order that if a film is given entertainment tax benefit, ticket prices should be minus the 30 per cent ET component on admission fee and directed authorities concerned to pass necessary orders within four weeks.
A division bench, comprising Justice S Tamilvanan and Justice G Chokkalingam, adjourned further hearing in the case to November 16, without making any observation on an appeal filed by INOX Leisure Limited, Mumbai.
Justice R Mahadevan had on October 29, allowing a writ petition of K J Saravanan, held that it would be the responsibility of the Chief Secretary, the Home Secretary and the commercial tax department to ensure that the tax burden was not passed on to viewers in case of tax-exempted films and necessary orders to this effect should be passed within four weeks.

INOX, in the appeal, submitted that the single judge has completely ignored the provisions of Tamil Nadu Cinemas Regulations Act, 1952, and the conclusion that the burden of tax is borne by the viewer and consequently the benefit of exemption is only for the viewer is completely erroneous and ought to be set aside.
It further submitted that the Judge had failed to see that to get exemption, the producer has to satisfy that the film complies with the conditions for grant of exemption and the same benefit will be available to the industry comprising producer, distributors and exhibitors.
Counsel for the petitioner P Wilson contended that the judgement was violative of the provisions of both Tamil Nadu Entertainment Act and Tamil Nadu Cinemas Regulation Act.

Hence, the benefit for grant of the exemption should be given only to the producer who will share it with the distributors and exhibitors.
"The single judge had failed to take into consideration the facilities provided by the exhibitors in their theatres.