Supreme Court of India
STATE OF WEST BENGAL AND ANR.versusRASH BEHARI SARKAR AND ANR.
- Citation
- 1992 INSC 330
- Decided
- 4 December 1992
- Disposal
- Disposed off
- Bench
- R M SAHAI
Holding
The classification based on profit motive and payment of artists is reasonable and within the scope of Section 8, so the notification is valid and not violative of Article 14.
Summary
The State of West Bengal issued a 1984 notification exempting entertainment tax for performances by group, amateur theatres or amateur jatra that are formed solely for cultural activities and do not pay artists regular or contractual fees, while professional theatres were excluded. A professional theatre challenged the notification as arbitrary and violative of Article 14 of the Constitution. The Calcutta High Court struck down the notification, holding the classification unreasonable and ultra vires. On appeal, the Supreme Court held that the distinction between non‑profit cultural groups and profit‑making professional theatres is a real and intelligible classification that furthers the legislative purpose of promoting social, educational and scientific activities under Section 8 of the Bengal Amusements Tax Act. The Court further ruled that the amended Section 8 authorises the State to prescribe such conditions and that the classification does not offend the equality clause. Consequently, the Supreme Court allowed the appeal and upheld the notification.
Issues considered
- The validity of the classification between group/amateur theatres and professional theatres under Article 14.
- Whether the amended Section 8 of the Bengal Amusements Tax Act, 1922 empowers the State to grant tax exemption only to non‑profit cultural performances.
- Whether the State exceeded its delegated authority in issuing the 1984 notification.
Legislation cited
Subjects
Article 14ClassificationEntertainment tax exemptionProfit motiveDelegated legislationEqualityBengal Amusements Tax ActGroup theatreAmateur theatreProfessional theatre
Judgment
STATE OF WEST BENGAL AND ANR. A
v.
RASH BEHARI SARKAR AND ANR.
DECEMBER 4, 1992
[R.M. SAHAI AND B.P. JEEVAN REDDY, JJ.]
B
Bengal Amusements Taxes Act, 1922 : Section 8-Entertainment
tax-1'Exemption from payment of'-Notification granting exemption to any
perfonnance organised by a Group Theatre, Amateur Theatre or Amateur
Jatra fonned exclusively for cultural activities onl~Validity of-Exclusion of C
performances rendered by professional theatres/jatras-for monetary
gains-Whether violative of Article 14 of the Constitution-Classification
amongst perfonning groups based on profit motive-Whether reasonable and
not arbitrary-Amendment of the Section- Effect of
D
Constitution of India, 1950 : Article 14-Classification amongst
equal~When pennissible Tax exemption based on profit motive-Whether
violative--E:.ercise of power-Tests to be observed.
Section 8 of the Bengal Amusements Taxes Act, 1922, as substituted
in 1981 by the West Bengal Taxation Laws Amendment Act, provided that E
the State Government may for a social, educational or scientific purposes,
by general or special order exempt fully or partly the entertainments tax,
show tax, surcharge or additional surcharge payable under the Act for any
entertainment or class of entertainments, subject to such exclusions as
may be laid down in such order. In exercise of this power the appellant- F
State issued a notification in March 1984 exempting any performance
organised by a bonafide group theatre, amateur theatre or amateur jatra,
formed exclusively for purposes of cultural activities, and not for monetary
gains, by engaging artists who are not paid any regular or con~ctual fees,
from payment of entertainment tax.
G
On a Writ Petition filed by one of the professional theatres assailing
exemption granted to those groups who were engaged in cultural activities
only without monetary gains, as beyond the power to grant exemption for
social, educational and scientific purpose and violative of Article 14 of the
Constitution, the High Court held that the classification made on the basis H
351
352 SUPREME COURT REPORTS (1992) SUPP.~ S.C.R.
A of engagement of a paid artist• was not reasonable as it did not serve the
legislative objective sought to be achieved by Section 8 of the Act and
consequently it was ultra vires.lt also held that since dramatic performance
given by a professional group on public stages could not be said to be
..'
devoid of any social values, the classification made by the Government
between the amateur and professional group was arbitrary, and that
B
dramatic performance for social, educational or scientific purposes
formed class by themselves and, therefore, any further classification on
pro~t motive and engagement of artists on contractual or regular basis
was not permissible in law.
C Disposing of the appeal, this Court
HELD: Per Sahai, J.
1.1. Equality means equality in similar circumstances between same
D class of persons for same purpose and objective. It cannot operate
amongst unequals. Only likes can be treated alike. But even amongst likes
the legislature or executive may classify on distinction which are real. A
classification amongst groups performing shows for monetary gains and
cultural activities cannot be said to be arbitrary. May be that both the
groups carry out the legislative objective of promoting social and educa-
E tional activities and, therefore, they are likes but the distinction between
the two on monetary gains and otherwise is real and intelligible. So long
the classification is reasonable it cannot be struck down as arbitrary. Likes
can be treated differently for good and valid reasons. The State in treating
the group performing theatrical shows for advancement of social and
F educational purpose, differently, on basis of profit making from those
formed exclusively for cultural activities cannot be said to have acted in
violation of Article 14. [359-E-G]
Orient Weaving Mills (P) Ltd. v. The Union of India, [1962] Suppl. 3
G S.C.R. 481 and Gopal Narain v. The State of Uttar Pradesh & Anr., (1964]
4 S.C.R. 869, relied on.
1.2. Dramatic performances for monetary gains and otherwise are
different and stand_ on different footing. The test is not if, even, the
professional group by its performance is serving social or educational
H purpose but if the two groups can reasonably stand on their own. If the
STATEOFW.B. v. RASHBEHARI 3.53
classification is valid, then the executive action of exempting one and not A
the other does not violate Article 14. [360-B, CJ
1.3. In the instant case, the distinction between professional and
amateur group has not been made only on engagement of a paid artiste.
It is on the nature and purpose of activities performed by the two. A
commercial or profit 111aking venture has always been considered to be a
B
class different than the one engaged in non-commercial activities. Clas-
sification based on such distinction is well recognised and is accepted as
valid for purposes of revenue. Under the notification in question, a group
giving amateur performance is first to be registered as such, and then
granted a certificate that it was giving amateur performances; whereas a C
professional theatre is not required to do so. The distinction between two
groups being rationale and ·in keeping with the objective of Section 8, the
High Court was not justified in striking down the notification as. being ultra
vires. [360-C-E]
D
2.1. The High Court was wrong in its view that there was absence of
power in the amended Section 8 of the Act, to grant exemption to any
theatre or jatra on giving performance and shows not for monetary gains,
which was specifically provided for under clause (a) and (c) of the un-
amended Section 8 and which was omitted from the amended Section and, E
therefore, the State Government could not bring it back by exercise of
executive power, through the notification in question. [360-F, G]
2.2. A perusal of the sub-section (1) of Section 2, as it stood prior to
its amendment, indicates that it did not provide for any guideline to the
F
State Government for exercise of power for granting exemption from tax.
It could be exercised in respect of any entertainment. When the section was
amended in 1981, the defect, if any, was cured by the Legislature by
omitting the sub-section altogether but the objective of exempting any
entertainment from tax if it was for social, educational and scientific
purpose, was retained. To this extent there is little difference between the G
amended and unamended section. But the conditions or the circumstances
on existence of which the exemption was available earlier as a matter of
law has now been left to be specified by the State Government in the order
or notification granting exemption. From this it cannot be inferred that
the State Government while granting exemption is debarred from specify- H
'•
354 SUPREME COURT REPORTS [1992) SUPP. 3 S.C.R.
A ing those conditions on which exemption was available earlier. What was
done earlier by the Legislature has now been left to be done by the State
Government. That by itself does not render either the power bad or action
invalid. Any exercise of power or specificatiOn of conditions has to be tested
on the section as it stands and not on assumption that since the section
B has been amended the State is precluded from granting exemption on one
of those conditions on which it was available. earlier. [361-A-E]
2.3. So long as the Government exercising the delegated power cf the
legislature does not contravene the legislative field carved out for it the
exercise of power cannot be held to be bad for extraneous reasons or
c irrelevant considerations. Since the classification between groups perform-
ing for monetary gains and otherwise has been held to be valid, the
notification under challenge cannot be struck down for granting exemption
on those very grounds on which it could be granted under the unamended
section. [361-E-F]
D Per Jeevan Reddy, J. (Concurring)
1.1. No doubt the theory of classification should n.ot be carried too
far, lest it denude the very concept of equality of its true ~ubstance, but
this does not and should not mean invalidation of a proper classification
E designed to achieve the objective underlying the enactment. [366-E-G]
State of J & K v. T.N. Khosla, [1974) 1 S.C.C.19, relied on.
1.2. Whether the power of exemption is treated as conditional legis-
lation or as a species of delegated legislation, the test is whether the power
F is exercised for the purpose(s) indicated. In the instant case, it is. [367-A]
Jalan Trading Co. v. Mill Mazdoor Sabha, [1967) 1 S.C.R. 15, relied
on.
1.3. Under the notification, Group Theatre/Amateur Theatre/
G Amateur Jatra is defined as one formed exclusively for the purpose of
cultural activities and not for monetary gain and where the artistes are
not paid any 11egular or contractual fees. This is in contrast to the Profes-
sional Theatre/Professional Jatra which is run with a profit motive and
wherein artistes are engaged on payment of regular or contractual fees.
H The distinction is two fold; firstly, between commercial and non- commer-
STATEOFW.B. I'. RASHBEHARI 355
cial theatres and secondly, the purpose f!)r which they are formed; Group A
Theatre/Amateur Theatres are formed exclusively for the purpose of cul-
tural activities, whereas the Professional Theatres may be formed for that
or any other purpose. This is the real distinction between the two. The
definitions contained in clauses (a) and (c) of the Explanation mention yet
another distinction viz., nature of engagement of artistes and the mode in
B
which they are paid. In the case of Group Theatres, the artistes are not
paid any regular or contractual fees whereas in the case of Professional
Theatres they are engaged on regular or contractual fees. Thus, there is a
clear and discernible distinction between both groups of theatres. If so,
they can be reasonably classified into two different groups for the purpose
of Section 8 of the Act. Promoting cultural activities certainly falls within C
social and educational purposes. In other words, the distinction made
between two groups of theatres is not only reasonable but has a close and
proximate nexus with the object underlying Section 8. The notification does
not make an invidious discrimination or unreasonable classification be-
tween theatres similarly situated. No doubt, even a Professional D
Theatre/Professional Jatra may also provide dramatic performances to
promote social, educational and scientific purposes. Even so, the distinc-
tion remains viz., while one is held with a profit motive, the· other is not.
From the point of view of levy of entertainment tax, which ultimately is
passed on to the public (audience), the distinction is a relevant one. it is
not possible to agree that profit motive has no relevance or rational E
relationship to the object underlying Section 8. Generally speaking, for a
commercial theatre profit motive is more important than promotion of
social, cultural or educational purposes; they tend to cater to the base
instincts of men. Not so in the case of a group or society formed with the
sole object of serving/promoting the said purposes without any profit F
motive. It is this latter category that needs and deserves support and
encouragement at the hands of the State. Employment of artistes on
regular/contractual basis too is indicative of a professional theatre work-
ing with a profit motive. This test cannot, therefore, be said to be ir-
relevant. [365-H; 366-A-D; 367-A-E]
G
2. it is true that the repealed Section 8 specifically spoke of absence
of profit motive, but that does not necessarily mean that the said element
is excluded altogether from the amended Section 8. So long as the power
to exempt is exercised by the Government for promoting any or all of the
purposes mentioned in Section 8, no objection can be taken to its validity. H
356 SUPREME COURT REPORTS (1992J SUPP. 3 S.C.R.
A The notification is designed to promote and encourage entertainment~
having social and educational value. The Government presumes that
Group Theatres/Amateur Theatres/Amateur Jatras formed with the ex-
clusive object of promoting cultural activities, without any profit motive
will provide such entertainment. The Government is justified in so
presuming. There is n.,,unreasonableness in it. [367-E, GJ
B
3. The conferment of power of exemption has become a common
feature of present-day legislation, particularly in taxing anactments and
enactments dealing with social and economic regulation. The prime ex-
ample is the Central Excise and Salt Act, 1944, where the number and
C volume of exemption notifications, and the frequency with wh!ch they are
issued, modified, repealed and re-issued are the despair of even the experts
in the field. It is in essence, legislation by executive. In the instant case,
the Legislature has provided clear guidelines in the matter of exercise of
power under Section 8. Where, similar power is conferred without any
D limiting words like those contained in Section 8, the conferment has yet
been upheld. [367-H; 368~A, BJ
PJ. Irani v. State of Madras, 1961 A.LR. S.C.1731, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 37 of 1985.
£ From the Judgment and Order dated 27.6.1984 of the CalcULca High
Court in Appeal from Original Order T.No. 1237/84.
H.K. Puri and Jamshed Bey for the Appellants.
V. Balachandran for the Respondents.
F
The Judgments of the Court were delivered by
R.M. SAHAI, J. Whether the notification issued on 31st March 1984
by the Government of West Bengal, in exercise of power conferred under
Section 8 of the Bengal Amusement Tax Act 1922 (Bengal Act V of 1922)
G (hereinafter referred, ~o as the Act) as amended in 1981, exempting any
performance organised by a bonafide group theatre, amateur theatre or
amateur jatra; formed exclusively for purposes of cultural activities and not
for monetary gains, by engaging artists who are not paid any regular or
contractual fees from payment of entertainment tax was beyond the power
H · to grant exempt~?" for social, educational and scientific purpose, thus
STATEOFW.B. v. RASHBEHARI[SAHAI,J.) 357
violative of Article 14 of the Constitution is the question which arises for A
consideration in this appeal filed by the State of West Bengal againstthe
judgment and order of a Division Bench of the Calcutta High Court.
Section 8 of the Act prior of its amendment read as under:
"8(1) The entertainments tax (and the show tax) shall not B
be charged on payment for admission to any entertain-
ment where the (State Government) is satisfied -
(a) that the whole of the takings thereof are devoted to
philanthropic, religious or charitable purposes without any
charge on the takings for any expenses of the entertain; or c
(b) that th,:: entertainment is of a wholly educational
character id the case of difference by the (State Govern-
ment) in the department of education; or
(c) that the entertainment is provided for partly educa- D
tional or partly scientific purposes by a society, not con-
ducted or established for profit; or
(d) that the entertainment is provided by a society which
is established solely for the purpose of promoting the
E
interest of the industry of agriculture or the manufacturing
industry, or some branch thereof or the public health, and
which is not conducted for profit, and consists solely of
an exhibition of the products of the industry, or branch
thereof, for promoting the interests of which 'the society
exists or of materials, machinery, appliances, or foodstuffs, F
used in the production of those products, or of articles
which are of material interests in connection with the
questions relating to the public health as the case may be.
(2) The (State Government) may, by general or Special
G
Order, exempt any entertainment or class of entertain-
ments from liability to the entertainments tax (and the
show tax)."
The State Government in 1975.issued a notification under Section 8(2) of
the Act exempting, from the liability of entertainment tax, dramatic perfor- H
358 SUPREME COUR1' REPORTS (1992] SUPP. 3 S.C.R.
A mance including Jatra by professional or other organisations subject to the
condition that the exemption was not available if the same was being
exhibited directly or indirectly as Cabre . In 1977 the notification issued in
1975 was amended and it was provided that entertainment tax was charge-
able and leviable where the admission fee exceeded Rs. 15. These notifica-
tions were amended twice in March and October 1979 reducing the limit
B
of the amount on whi~h the tax was chargeable. From 1977 onwards,
therefore, there was a partial exemption related to rate of admission fee.
In 1981 Section 8 of the Act was substituted by the West Bengal Taxation
Laws Amendment Act and the Substituted Section reads as under:
c "8. The State Government may, for social, educational or
scientific purposes, by general or special order, exempt
fully or partly the entertainments tax, show tax, surcharge
or additional surcharge payable under this Act for any
entertainment or class of entertainments, subject to such
condition as may be laid down in such order."
D
In March 1984 the impugned notification was issued:
"In exercise of the power conferred by Section 8 of the
Bengal Amusements Tax Act, 1922 (Bengal Act V of
1922), the Governor is pleased hereby to rescind, with
E effect from the 1st day of April, 1984, this Department I
order Nos. 1279 F.T. dated the 31~t March 1979 and 1404 (
F.T., dated the 10th April, 1979 and notification No. 1084
F.T., dated the 23rd March, 1983 and all previous orders
exempting payment of entertainment tax on performances,
F other than cinematograph exhibition, issued under Section
8 of the said Act provided that no entertainment tax shall
be charged, levied and paid in respect of any performance
organised by a Group Theatre, Amateur Theatre or
Amateur Jatra subject to the condition that the organisers
of such performance shall obtain necessary certificate
G
from the appropriate authority declaring them as bonajide
Group Theatre, Amateur Theatre ·or Ameteur Jatra.
fuplanation: (a) "Group Theatre" or "Amateur
Theatre" or "Amateur Jatra" means a registered or un-
H registered society or a grq,up of persons formed exclusively
STATE OF W.B. v. RASH BEHAR! (SAHAI, J.] 359
for the purposes of cultural activities and not for monetary A
gains by engaging artistes who are not paid any regular or
contractual foes. "Amateur Theatre" also includes any
amateur organisation engaged in dance and music....... "
On a Writ petition filed by one of the professional theatres assaifuig
exemption granted to those groups who were engaged in cultural activities, B
only without monetary gains, the High Court held that the classification
made on basis of engagement of a paid artist was not reasonable as it did
not serve the legislative objective sought to be achieved by Section 8 of the
Act and consequently it was ultra vires. It was held that Section 8 em-
powered the government to grant exemption to any entertainment or class C
· of entertainment if it was for social or educational or scientific purpose
and since dramatic performance given by a professional group on public
stages could not be said to be devoid of any social values, the classification
made by the Government between the amateur and professional group was
arbitrary. The High Court found that dramatic performance for social, D
educational or scientific purposes form class by themselves and, therefore,
any further classification on profit motive and engagement of artists on
contractual or regular basis was not permissible in law.
Equality means equality in similar circumstances between same class
of persons for same purpose and objective. It cannot operate amongst E
unequals. Only likes can be treated alike. But even amongst likes the
legislature or executive may classify on distinction which are real. A clas-
sification amongst groups performing shows for monetary gains and cul-
tural activities cannot be said to be arbitrary. May be that both the groups
carry out the legislative objective of promoting social and educational F
activities and, therefore, they are likes but the distinction between the two
on monetary gains and otherwise is real and intelligible. So long. the
classification is reasonable it cannot be struck down as arbitrary. Likes can
be treated differently for good and valid reasons. The State in treating the
group performing theatrical shows for advancement of social and educa-
tional purpose, differently, on basis of profit making from those formed G
- exclusively for cultural activities cannot be said to have acted in violation
of Article 14.
In Orient Weaving Mills (P) Ltd., v. The Union of India, (1962] Suppl.
3 SCR 481 a classification differentiating between goods produced in big H
360 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.
A establishments and smaller establishments was held to be a valid classifica-
tion permissible under the Constitution. Similarly in Gopal Narain v. The
State of Uttar Pradesh & Anr., [1964] 4 SCR 869 distinction made between
the old city and the new city for purposes of levying higher and lower rate
of tax was upheld as it did not infringe Article 14 of the Constitution.
B Dramatic performance for monetary gains and otherwise are dif-
ferent and stand on different footing. The test is not if, even, the profes-
sional group by its performance is serving social or educational purpose
but if the two groups can reasonably stand on their own. If the classification
is valid, of which there appears no doubt, then the executive action of
c exempting one and not the other does not violate Article 14. The High
Court erroneously understood that distinction between professional and
amateur group has been made only on engagement of a paid artist. The
basic distinction is on the nature and purpose of activities performed by
the two. A commercial or profit making venture has always been con-
D sidered to be a class different than the one engaged in non-commercial
activities. Classification based on such distinction is well recognised and is
accepted as valid for purposes of revenue. Under the impugned notifica-
tion a group giving amateur performance is first to be. registered as such
and then granted a certificate that it was giving amateur performances.
Whereas a professional theatre is not required to do so. The distinction
E between two groups being rationale and in keeping with the objective of
Section 8 the. High Court was not justified in striking down the notification
as being ultra vires.
Even the infirmity found by the .High Court in the notification, on
F absence .of power in the amended Section 8 of the Act, from granting
exemption to any theatre or jatra on giving performance and shows not for
monetary gains is not well founded. According to !he High Court such
power was specifically provided for under clause (a) and (c) of the un-
amended Section 8 but the same having been omitted from the amended
Section the State Government could not bring it back by exercise of
G executive power. The finding appears to proceed on misconception about
the amendment brought about in Section 8 in 1981. In fact a reading of the
amended and unamended section does not warrant such conclusion.
Section 8 as it stood prior to amendment visualised certain exemp-
H tions as a matter of law, such as those specified in clauses (a) to ( d) of
STATEOFW.B. v. RASHBEHARI[JEEVANREDDY,J.] 361
sub-section (1), and sub-section (2) empowered the State Government to, A
'exempt any entertainment or class of entertainments' by gene1 al or special
order. The notifications which were issued in 1975 and onwards were under
.sub-section (2) of Section 8 of the Act. A bare perusal of the sub-section
indicates that it did not provide for any guideline to the State Government
for exercise of power for granting exemption from tax. It could be exercised
in respect of any entertainment. When tpe section was amended in 1981
B
the defect, if any, was cured by the Legislature by omitting the sub-section
altogether but the objective of exempting any entertainment from tax if it
was for social, educational and scientific purpos~, was retained. To this
extent there is little difference between the amended and unamended
section. But the conditions or the circumstances on existence of which the C
exemption was available earlier as a matter of law has now been left to be
specified by the State Government in the order or notification granting
exemption. From this it cannot be inferred that the State Government while
granting exemption is debarred from specifying those conditions on which
exemption was available earlier. What was done earlier by the Legislature D
has now been left to be done by the State Government. That by itself does
not render either the power bad or action invalid. Any exercise of power
or specification of conditions has to be tested on the section as it stands
and· not on assumption that since the section has been amended the State
is precluded from granting exemption on one of those conditions on which
it was available earlier. So long the Government exercising the delegated E
pqwer of the legislature does not contravene the legislative field carved out
for it the exercise of power cannot be held to be bad for extraneous reasons
or irrelevant considerations. Since the classification between groups per-
forming for monetary gains and otherwise has been held to be valid the
impugned notification cannot be struck down for granting ~xemption on F
those very grounds on which it could be granted under the unamended
section.
B.P. JEEVAN REDDY, J. I agree with my learned bro.ther Sahai, J.
that this appeal ought to be allowed. The reasoning - rather over-simplified
- adopted in the judgment under appeal, however, impels me to say a few G
words.
The Bengal Amusements Tax Act, 1992 was enacted to provide for
levy of lax upon entertainments. Section 2( 4) defines the expression
'entertainment'. it includes any exhibition, performance, amusement, game H
362 SUPREf\!E COURT REPORTS (1992] SUPP. 3 S.C.R.
A or sport to which persons are admitted on payment~ Section 3 is the
charging section. It provides that there shall be charged, levied and paid
to the State Government, a tax on all payments for admission to any
entertainment. Section 8 confers upon the Government the power to
exempt any entertainment or class of entertainment.
B Section 8 of the Bengal Amusement Act as substituted by West
Bengal Taxation Laws Amendment Act, 1961 reads as follows:
"8. The State Government may, for social educational or
scientific purposes, by general or special order_, exempt
fully or partly the entertainments tax, show tax, surcharge
c or additional surcharge payable ·under this Act for any
entertainment or class of entertainments, subject to such
condition as may be laid down in such order."
Section 8 prior to its amendment has been set out in the judgment
D of my learned brother. It is not necessary for me to reproduce the same
over here again.
On 31.3.1984, the Government of West Bengal issued the following
notification under amended Section 8:
E "GOVERNMENT OF WEST BENGAL
FINANCE DEPARTMENT TAXATION
No. 1042-F.T.
Calcutta, the 31st March, 1984.
F
NOTIFICATION
In exercise of the power conferred by Section 8 of the
Bengal Amusements Tax Act, 1922 (Ben. Act V of 1922),
the Governor is pleased hereby to rescind, with effect
G from the 1st day of April, 1984, this Department order
Nos. 1279 F.T. dated the 31st March, 1979 and 1404 F.T.,
dated the 10th April, 1979 and notification No. 1084 F.T.
dated the 23rd March, 1981 and all previous orders ex-
empting payment of entertainment tax on performances
H other than cinematograph exhibition, issued under Section
STATEOFW.B. v. RASHBEHARI[JEEVANREDDY,J.] 363
8 of the said Act provided that no entertainment tax shall A
be charged, levied and paid in respect of any performance
organised by a Group Threatre, Amateur. Theatre or
Amateur Jatra subject to the condition that the organisers
of such performance shall obtain necessary certificate
from the appropriate authority declaringthem as bonafide
Group Theatre, Amateur Theatre or Amateur Jatra.
B
Explanation: (a) "Group Theatre" or "Amateur Theatre"
or "Ainateur Jatra" means a registered or unregistered
society or a group of persons formed exclusively for the
purposes of cultural activities and not for monetary gains c
by engaging artistes who are not paid any regular or
contractual fees. "Amateur Theatre" also includes any
amateur. organisation engaged in dance and music.
(b) "Appropriate authority" means the department of In-
formation and Cultural Affairs, Government of West Ben- D
gal, who shall issue certificates to be renewed every year
on the basis of papers and returns as may be required by
that Department from time to time.
(c) "Professional Theatre" or "Professional Jatra" means
any theatrical or histrionic performance including musical E
recitals organised by a proprietory or partnership con-
cerns or public limited company or any proprietor or
lessee of a public show house, engaging artistes on pay-
ment of regular or contractual fees.
F
By order of the Governor.
sd/ - N.P. Bagchee
Spl. Secy. to the Govt. of West Bengal"
A reading of the impugned notification shows that it repeals three G
notifications issued earlier under Section 8 (both before and after its
amendment). The only exemption from tax now provided is "in respect of
any performance organised by a Group Theatre, Amateur Theatre or
Amateur Jatra subject to the condition that the organiser of such perfor-
mances shall obtain necessary certificate from the appropriate authority H
364 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.
A declaring them as bo~afide ·group theatre, amateur theatre or katew:
jatra". Tpe Explanation appended to the notification contains three clauses.
Clause (a) defines Group Theatre/Amateur Theatre/Amateur Jatra
whereas clause (c) defines Professional Theatre/Professional Jatra. Clause
(b) defines· the expression 'appropriate authority' referred to in the body
of the notification. Cfause (a) of the explana_tion says that a Group
B Theatre/Amateur Theatre/ Amateur J atra means. a registered or un-
registered society or a group of persons "formed exclusively for the pur-
poses of cultural activities and not for monetary gains by engaging artistes
who are not paid any regular or contractual fees." In contra-distinction to
this, clause (c) of the explanation defines Professional Theatre/Professional
c Jatra to ptean "any theatrical or histrionic performance including musical
recital organised by a proprietor or a partnership concern or a public
limited company or proprietor or lessee of a public show house engaging
artistes on payment on regular or contractual fees." There is no exemption
in favour of the entertainment provided by Professional Theatres/profes-
D sional Jatras.
The respondents who are running Professional Theatres filed a writ
petition in the Calcutta High Court questioning the validity of the Notifica-
tion dated 31st March, 1984. According to them, it was discriminatory and,
therefore, violative of Article 14 of the Constitution of India. The writ
E petition was ad~itted ·and an injunction granted as prayed for by the
respondents/writ petitioners. The State of West Bengal filed an appeal
against the Interlocutory Order. The Division Bench took up the main writ
petition itself for hearing with tl}e consent of the parties and allowed che
same. The reasoning of the Division Bench,· condensed by me runs thus:
F
Dramatic performances for socia~ educational or scien-
tific purposes form a class by themselves; if so, further
classification among that class is not permissible in law.
Profit motive and engagement of artistes on contractual
or regular remuneration basis have no rational relation-
G ship to the object sought to be achieved by the Act. Group
theatres, amateur theatres and amateur jatras as well as
-the professional theatres provide entertainment. Both of,
them aim at social reformation. Indeed, some of the per-
formances. by amateur theatres are highly intellectual and
H beyond the comprehension of a common man, whereas
STATEOFW.B. v. RASHBEHARI[JEEVANREDDY,J.] 365
the Professional Theatres provide fare suited-to a common A
man. The classification between the two categories of
theatres cannot be reasonably regarded as based upon
some differentia which distinguishes group theatres,
amateur theatres or amateur jatra from the professional
theatres. The twin tests enunciated in the decisions of the
Supreme ~ourt have not been satisfied in this case. There B
is nothing on the face of the notification nor any cir-
cumstances have been brought to the notice of the court
- to justify the said classification. Due regard must also
be had to the amendment of Section 8. There is a qualita-
tive difference between the un-amended and amended c
Section 8. The un-amended Section 8. expressely stipulated
that exemption can be granted only in the ~e of enter-
tainment which is not conducted or established with a
pr9fit motive whereas the amended Section 8 does not
stipulate any such condition. The change must be deemed
to be deliberate. In such a situation, the impugned
D
notification which again stipulates the aforesaid condition
(absence of profit motive) is outside the ambit of amended
Section 8.
Correctness of the above view is questioned in this appeal. E
Section 8 confers the power ·upon the Central Government to ex-
empt, fully or partly, the entertainment tax for any entertainment or class
of entertainment subject to such conditions as may be specified in its order.
The entertainment to be exempted should, however, be designed to serve F
socia~ educational and scientific purposes. So long as the power is exer-
cised for achieving the said ends, the exercise is unobjectionable.
The impugned notification says that no entertainment tax shall be
levied on performances organised by a Group Theatre/Amateur Theatre/
Amateur Jatra subject to the condition that the organisers of such perfor- G
mances shall obtain the necessary certificate from the appropriate authority
declaring them as bonafide Group Theatre/Amateur Theatre/Amateur
Jatra. Group Theatre/Amateur Theatre/Amateur Jatra is defined as one
formed exclusively for the purpose of cultural activities and not for
monetary gain and where the artistes are not paid any regular or contrac- H
366 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.
A tual fees. This is in contrast to the Professional Theatre/Professional Jatra
which is run with a profit motive and wherein artistes are engaged on
payment of regular or contractual fees. The distinction is two fold: firstly,
between commercial and non-commercial theatres and secondly, the pur-
pose for which they are formed; Group Theatre/Amateur Theatres are
formed exclusively for the purpose of cultural activities, whereas the
B
Professional Theatres may be formed fQr"that or any other purpose. This
is the real distinction between the two. The definitions contained in clauses
)
(a) and (c) of the Explanation mention yet another distinction viz., nature
of engagement of artistes and the mode in which they are paid. In the case
of Group Theatres, the artistes are not paid any regular or contractual fees
c whereas in the case of Professional Theatres they are engaged on regular
or contractual fees. Thus, there is a clear and discernible distinction
between both groups of theatres. If so, they can be reasonably classified
into two different groups for the purpose of Section 8 of the Act. Section
8 says that the Government may exempt any entertainment from the tax so
D long as such entertainment is held for promoting social, .educational and
scientific purposes. Promoting cultural activities certainly falls within social
and educational purposes. In other words, the distinction made between
the two groups of theatres is not on•y reasonable but has a close and
proximate nexus with the object underlying Section 8.
E It is true that the theory of classification should not be carried too
far, lest it denude the very concept of equality of its true substance, as
pointed out by Chandrachud, J. in State of J&K v. T.N. i<hosla, [1974] 1
S.C.C. 19. The learned Judge said:
".... Jet us not evolve, through imperceptible extentions, a
F theory of classification which may subvert, perhaps sub-
merge, the precious guarantee of equality. The, eminent
spirit of an ideal society is equality and so we must not be
let to ask in wonderment; What after all is the operational
residue of equality and equal opportunity?"
G
But this does not and should not mean invalidation of a proper
classification designed to achieve the objective underlying the enactment.
Power of exemption has been d'escribed as 'conditional legislation'
. by a Constitution Bench of this Court in la/an Trading Co. v. Mill Mazdoor
H Sabha,' [1967) 1 S.C.R. 15 an~ not in the nature of delegated legislation.
STATEOFW.B. v. RASHBEHARI[JEEVANREDDY,J.] 367
Whether this power is treated as conditional legislation or as a species of A
delegated legislation, the test is whether the power is exercised for the_
purpose (s) indicated. In this case, it is. I a:m, therefore, unable to agree
that the impugned notification makes an invidious discrimination or un-
reasonable classification between theatres similarly situated. True it is that
even a professional theatre/professional jatra may also provide dramatic
performances to promote social, educational and scientific purposes. E;ven
B
so, the distinction remains viz., while one is held with a profit motive, the
other is not. From the point of-view of levy of entertainment tax, which
ultimately is passed on to the public (audience), the distinction is a relevant
one. It is not possible to agree that profit motive has no relevance or
rational relationship to the object underlying Section 8. Generally speaking, c
for a commercial theatre profit motive is more important than promotion
of social, cultural or educational purposes; they tend to cater to the baser
instincts of men. Not so in the case of a group or society formed with the
sole object of serving/promoting the said purposes without any profit
motive. It is this latter category that needs and deserves support and D
encouragement at the hands of the State.
Employment of artistes on regular/contractual basis too is indicative
of a professional theatre working with a profit motive. This test cannot,
therefore, _be said to be irrelevant.
E
I am equally unable to appreciate the argument based upon the
language of the repealed Section 8. True it is that repealed Section 8
specifically spoke of absence of profit motive but that doesn't necessarily
mean that the said element is exduded altogether from the amended
Section 8. So long as the power to exempt is exercised by the Government F
for promoting any or all of the purposes men~ioned in Section 8, no
objection can be taken to its validity. The notification is designed to
promote and encourage entertainments having social and educational
value. The Government presumes that Group Theatres/Amateur
Theatres/Amateur Jatras formed with the exclusive object of promoting
cultural activities, without any profit motive will provide such entertain- G
ment. The Government is justified in so presuming. There is no un-
reasonableness in it.
It may be noted that conferment of power of exemption has become
a common feature of present-day legislation, particularly in trucing enact- H
368 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.
A ments and enactments dealing with social and economic regulation. The
prime example is the Central Excise and Salt Act. 1944, where the number
and volume of exemption notifications, and the frequency with which they
are issued, modified, repealed and re-issued are the despair of even the
experts in the field. It is in essence, what C.K. Allen calls, legislation by
executive. Unpleasant as it is, it has its own defenders. Be that as it may,
B
so far as the present case is concerned, the Legislature has provided clear
guidelines in the matter of exercise of power under Section 8. Where,
similar power is conferred without any limiting words like those contained
in Section 8, the conferment has yet been upheld. Reference in this
connection may be made to P.J. Irani v. State of Madras (A.LR. 1961 S.C.
c 1731). Section 13 of the Madras Buildings, Lease and Rent Control Act,
1949 empowered the State Government to exempt any building or class of
buildings from all or any of the provisions of the Act. It was argued that
the said sec(Gn confers unguided and un-controlle~ discretion upon the
State Government and, therefore, amounts to excessive delegation. The
D argument was repelled. It was held that the very policy and scheme of the
Act furnishes adequate guidance to the Government in the exercise of its ,
power. It was held .at the same time that where such power is exercised for •
purposes, not germane to the purpose or policy of the enactment or where
it is found to be discriminatory, the· action can always be questioned.
N.P.V. Appeal disposed of.
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