Exemption from Entertainment Tax for movie is a concession by government, can't be claimed as right: Madras High Court

Exemption from payment of entertainment tax is a concession by the government and cannot be claimed as a matter of right, the Madras High Court recently held [G Sundararajan v The Secretary]..Hence, using a Tamil alphabet in a film's title cannot be a ground to claim exemption from payment of entertainment tax, the Court held while refusing relief to the producer and distributor of the 2015 Tamil film, 'I'In a judgment passed on March 8, Justice SM Subramaniam of the Madras High Court refused to interfere with the decision of the Pudducherry administration and the Union Territory's Revenue Department that had rejected the film producer's application for exemption from payment of 30 percent entertainment tax."The payment of Entertainment tax is the rule. Granting exemption is an exception. Thus, such exceptions and the power of discretion to grant exemption are to be exercised cautiously and mere (sic) using the Tamil letter in a film cannot be a ground to grant exemption from payment of Entertainment tax by the High Court in exercise of the powers under Article 226 of the Constitution of India," the Court said. .G Sundararajan, the film's producer and the petitioner in the present case, had approached the High Court in 2015 challenging the Puducherry authorities' refusal to grant him such exemption. A 2007 decision taken by the then Chief Minister of Tamil Nadu entitled local municipalities to levy an entertainment tax of 30 percent on films running in cinema theatres. Theater owners could be exempted from paying this 30 percent tax if the movies had Tamil language titles. However, the final decision on whether or not a film, even one that has a Tamil title, should be granted such exemption was subject to the discretion of the State authorities. In the present case, the Puducherry authorities refused to grant such exemption on two grounds. First, even though the film's posters in the State had the English alphabet 'I' written as 'ai' in the Tamil script, the fact that it was an English title did not change. Second, only cinema theatre owners were entitled to such exemption, and Sundararajan was the producer and distributor of the film and not a cine theatre owner. On the other hand, the petitioner argued that 'ai' when written in the Tamil script is used to express an emotion of exclamation. 'Ai' in Tamil has a distinct meaning, and therefore, the film should be granted the 30 percent exemption. The High Court, however, rejected the argument. ."Exemption from payment of entertainment tax given to a film is a concession granted by the Government to encourage the film makers to use Tamil title for their films. Concession can never be claimed as a matter of right. Concession is to be extended, if the authorities are satisfied and the conditions stipulated in the policy are complied with," the High Court said. The Court also said that the expert body's decision was final since it had gone into the merits of the petitioner's arguments and held the film to be ineligible for grant of such exemption. "The word “I” is a letter in Tamil language. No doubt, the letter “I” may convey certain meaning, since Tamil being an ancient language. Even in 'Thirukkural', the letter “I” has been used by the poet “Tiruvalluvar” to convey some meaning. However, in the context of the film, whether the word “I” may be construed as Tamil title or not is to be decided on merits and with reference to the contents in the movie," the High Court said while dismissing the plea. Advocate T Ravichandran appeared for the petitioner G Sundararajan.Additional Govertment Pleader B Ramaswamy appeared for the Puducherry Department of Local Administration, a respondent in the case. Senior Counsel TP Manoharan and advocate TM Naveen appeared for the Commissioner and the Revenue Officer-I, of the Pudducherry municipality, the other respondents in the case. .[Read Judgment]