P L D 1958 (W (PLP)

(5) The Chief Officer of the Karachi Municipal Corporation may require any person whom he considers liable to the pay ment of the tax to furnish him with a written return on the prescribed form, signed by such person, and such person shall be bound to comply with the said requisition within such period as the Chief Officer prescribes in that behalf. (6) Any person contravening the provisions of Rule 5, shall, on conviction be liable to Oay a fine not exceeding rupees two hundred. (Sd.) S. HASHIM RAZA, Administrator of Karachi". In pursuance of the said notification the respondent‑Corporation levied and recovered from the appellant from May 1950 to Feb ruary 1951 a sum of Rs. 8,470, which was paid by the appellant under protest from the very beginning. The appellant considered the said act as illegal and ultra vires and therefore filed the suit under appeal after giving a statutory notice on 6‑6‑1952 under section 255 of the Karachi Municipal Act to the respondent -Corporation. In this suit the validity of the above‑mentioned entertainment tax was challenged inter alia on the ground that it is not a tax on entertainment but is in substance and in fact a tax on trade and profession, that the impugned tax being a tax on income was ultra vires of the powers of the respondent‑Cor poration, that as under the provisions of the Bombay Entertain ment Duty Act, 1923 entertainment tax has already been levied, the respondent‑Corporation was not entitled to levy a further entertainment tax and that the quantum of‑the impugned tax is beyond the limit authorised by law. The appellant for these reasons prayed that the amount recovered from him may be ordered to be refunded and a perpetual injunction may be issued to the respondent‑Corporation restraining them from recovering the said tax in future. Our learned brother Inamullah, J., after considering the evidence and other documents produced on the record, came to the conclusion that the respondent‑Corporation was entitled to impose the impugned tax that was a tax on entertainment and dismissed the suit. The learned Judge dealt with all the aspects of the case presented in the suit and has pronounced a well‑con sidered judgment on the points involved in the matter. Mr. Sharifuddin, the learned counsel for the appellant, has again raised the same contentions before us viz. that the impugned tax is not an entertainment tax, that is a tax either on income or profession or calling and therefore it falls under Item No. 54 of List I of the Seventh Schedule or Item No. 46 of List II of the Seventh Schedule of the Government of India Act. He contended that if this Court comes to the conclusion that it falls under Item No. 54 of List I of Schedule 7, the respondent‑Corporation had no authority to impose such a tax, and if on the other hand this Court comes to the conclusion that it falls under Item No. 46 of List II of Schedule 7, it exceeds the maximum amount fixed under section 142‑A of the Government of India Act, and there fore cannot be recovered from the appellant. I shall deal with each one of the contentions raised by the learned counsel for the appellant separately. The learned counsel for the appellant contended that the lists introduced in Schedule 7 of the Government of India Act were enacted under an Act of the British Parliament, that there is legislative history behind each Item and therefore the words "tax on entertainments " mentioned in Item No. 50 of List II of Schedule 7 should be interpreted in the Light of the legislative history of the said words in the United kingdom, other British Dominions and also in the United State of America. He therefore took us through the various legislative enactments in these countries to show that the entertainment tax has always been understood to be a tax on visitors and not on the promoters 4f an entertainment. This may be so, but in my opinion the inter pretation of the entries in the List introduced in the Seventh Schedule of the Government of India Act cannot be restricted simply because the British Parliament or the Dominion Parliament imposed the entertainment tax in a different manner than the, one introduced in the impugned legislation. It is a well recognised principle of interpretation of statutes that the language of the' Constitution should be construed in a natural and liberal sense and should not be interpreted in a technical and pedantic manner. The entry in the lists of the Seventh Schedule only demarcates the legislative powers under which the respective Legislatures are entitled to legislate. In my opinion in interpretating the said entries there is no implied restriction to be read on the legislative powers of the respective Legislatures in legislating under those entries. They should be interpreted in a liberal manner and no artificial or restricted interpretation should be given to the meanings of those entries. The learned counsel for the appellant, however, drew our attention to the observations of Bhagwati, J. Tan Bug Taim and others v. Collector of Bombay (AIR1946Bom.216atp.231), in support of his contention. Bhagwati, J. in that case observed "That in the matter of the construction of the Constitution Act like the Government of India Act, 1935, regard should be had to the legislative practice prevailing in England as well as in India in order to determine what is ordinarily treated as embraced within a particular topic or category of legislation." The learned Judge for that purpose relied on the observations made in a decision of their Lordships of the Privy Council in E. R. Croft v. Sylvester Dunphy (AIR1933PC16).. Their Lordships observed at page 19 :‑ "When a power is conferred to legislate on a particular topic it. is important, in determining the scope of the power, to have regard to what is ordinarily treated as embraced within that topic in legislative practice and particularly in the Legislative practice of the State which has conferred the power." He also relied on the observations of Beaumont C. J. in Sir Byramjee Jeejeebhoy v. Province of Bombay and others (A I R 1946 Born. 65), a Full Bench decision to the following effect :‑ "In Construing the Government of India Act, 1935, the Court is entitled to look to the legislative practice prevailing in England and in India at the time when it was passed." The views expressed in both the Bombay decisions are based on A I R 1933 P C

16. In that case their Lordships of the Privy Council were considering the validity of Customs Act of Canada (1927) and the question under consideration was whether it was within the power of the Dominion Parliament to pass legislation purporting to operate to a distance of 12 miles from the coast of Canada. It was in that connection that their Lordships made the observations referred to above. This, however, was not the sole ground on which the matter was decided. Their Lordships at page 18 made the following pertinent remarks :‑ "Once it is, found that a particular topic of legislation is among those upon which the Dominion Parliament may com petently legislate as being for the peace, order and good government of Canada or as being one of the specific subjects enumerated in section 91, British North America Act, their Lordships see no reason to restrict the permitted scope of such legislation by any other consideration than is applicable to the legislation of a fully sovereign State." Their Lordships further added that "it had long been the practice to include in Imperial Statutes relating to this branch of law ex ecutiv4 provisions to take effect outside ordinary territorial limits " and concluded :‑ "In these circumstances it is difficult to conceive that the Imperial Parliament in bestowing plenary powers on the Dominion Parliament to legislate in relation to customs should have with held from it the power to enact provisions similar in scope to those which had long been an integral part of Imperial customs legislation and which presumably were regarded as necessary to its efficacy." In my opinion the observations of their Lordships of the Privy Council do not mean that the topics of legislation on which the Dominion Parliament has been empowered are only to be inter preted in the light of the legislative history of the Imperial Parlia ment on such topics. It only means that the legislative history of such parallel statutes can also be taken into consideration. In this view of the matter, it is difficult to accept the argument of the learned counsel for the appellant that because in England and in other Dominions the entertainment tax has always been imposed on the visitors of the cinemas, theatres or other enter tainment shows; the Provincial Legislature's power under the Government of India Act should also be restricted to impose such tax on visitors and not on the owners of the theatres or cinemas. In my opinion the legislative practice is not to be referred to for purposes of finding out in what manner the taxation should be imposed. It is only to be adverted to for the purpose, if tile entries In the list are used in an ambiguous manner, of solving such ambiguity. The legislative practice is never resorted to find out any restrictions on the power of the Legislature to legislate on a particular topic when the words used are clear and not used in the technical sense. I am fortified in this view by a decision of the Indian Federal Court reported in Ralla Ram v. The Province of East Punjab (A I R 1949 F C 81). In that case also it was contended that in interpreting the words "tax on buildings" which occur in List II, regard should be had to the legislative, practice prevailing in England ; and further that since the taxes on buildings in England, or rates as they were called, were generally speaking in the nature of an occupation tax payable by the occupier, it could not have been contemplated by the British Parliament that the expression "tax on buildings" should be something other than an occupation tax and embrace a tax payable by an owner. This argument was similar to the one advanced in the present case. Fazl Ali, J. at page 84 of the report observed :‑ "If therefore the Legislative practice in India is to be taken into consideration, the appellant's argument could be met by saying that the British Parliament might well have intended to enable the Provincial Governments to continue to impose taxes of the nature imposed in different parts of the country from many years past. It seems, however, unnecessary to pursue the matter further, because the point can, in our opinion, be disposed of on a surer ground. It appears to us that when the words used in the Act are clear and unambiguous; and they are not unfamiliar or uncommon words or such words as may be aptly described as terms of art, it is unnecessary to travel beyond the Act for the purpose of constru ing them. Item 42 of List II, deals with taxes on lands and buildings, hearths and windows'. There are no words in the Act to suggest that the tax is to be paid only by the occupier and not by the owner, and it seems to us to be wholly wrong to read into item 42 words do not occur there and thereby to limit the scope and meaning of the expressions used." It therefore appears to me that if the words in a statute are clear and unambiguous, effect should be given to the plain E grammatical meaning of the words, and their meaning should not be restricted on the ground that the Imperial Parliament imposed such tax on a particular class of people. I am in complete agreement with Inamullah, J., that the mode in which the different legislatures of various countries have passed legisla tion on entertainment tax does not provide any basis or rule for construing or interpreting the words "taxes on entertainment." Equally untenable is the contention on behalf of the appellant that the words "taxes on entertainments" has acquired a limited meaning in legal terminology. Mr. Sharifuddin referred us to Volume 28 Halsbury's Laws of England (2nd Edition) para. 681 and 170 L T 631 at page 633, Vol. XXX, Art.' 33 American Jurisprudence and British Encyclopaedia Vol. XIV (1948 Edition) page 506 on the subject "Tax on Luxury", but they show nothing more than this that entertainment tax was levied in, different parts of the British Dominion and in United States of America and it was a tax on the admission of the visitors in places of entertainment. There is no ambiguity in entry 50 of List II of Schedule

7. The Provincial Legislature is permitted to legislate on the subject "Tax on luxuries including taxes on entertainments." There is no G indication as to how and on whom thi3 tax is to be imposed. No restriction is mentioned in this behalf. If therefore the impugned tax falls on anything which comes within the meaning of entertainment, there is no doubt it will be a tax on the entertainments. Mr. Sharifuddin contended that the respondent‑Corporation by imposing a tax of Rs. 10 per show, has in effect taxed the income of the proprietor or promoter of the cinema show. At first sight, it appears to be a plausible argument. But on closer examination it is abundantly clear that the impugned tax is not to be calculated on any percentage of income. There is a uniform tax of Rs. 10 per show exhibited in all cinemas and theatres in Karachi irrespective of the income earned therein. The tax will be recoverable even from those promoters of the show who are not at all carrying on that business. In my opinion the true criterion to find out whether the tax is on the income or on the entertainment will be to see whether it is directly levied on the income of the promoter or is on the entertainment provided by him. The mere fact that it incidentally hits the income of the promoter of the enter tainment cannot convert it into a tax on income. The promoter can easily pass it on the visitors by including the amount paid by him on the amount charged for their admission. It is thus obvious that the impugned tax is not at all on the income. It was next argued by the learned counsel for the appellant that it was a tax on the calling or profession of the proprietor of the cinema or theatre. This contention is also without any force because the tax has not been imposed on the proprietor of the cinema because he carries on such business. The tax has been imposed on the show that is exhibited in this cinema. The mere fact that incidentally the person from whom the said tax is going to be recovered happens to be the proprietor of the cinema cannot change such tax into a tax on, calling or profession. It is the true nature of the tax imposed, which will determine subject on which the legislation has been made. It was admitted by the learned counsel for the appellant that the impugned tax will be recoverable from those persons, who are not carrying on this profession if they organize any show in any cinema or theatre at Karachi. Under these circumstances how can such a tax be treated as a tax on calling or profession ? This view is also supported by some Indian decisions viz. Cantonment Board Poona v. Western Indian Theatre Ltd. (A I R 1954 Bom. 261) Kantilal Chatrabhuj Shah v. The Palitana Municipality (A I R 1955 Saurashtra 90) and Silver Screen Enterprises v. The State and another (A I R 1956 Pb. 203). The learned counsel for the appellant being a shrewd lawyer in his opening address referred to these decisions and distinguished them on the ground that they did not take into consideration the principle that in interpreting the entries in the various lists of the Seventh Schedule, legislative practice in England and other Dominions should be taken into considera tion. I have already dealt with this aspect of the case and this consideration is not at all relevant in respect of such entries, which are in clear and unambiguous language. The learned counsel further contended that the correct legal position with regard to this particular topic viz., enter tainment has been exposed in State of Bombay v. R. M. D. Chamarbaugwala and others (A I R 1956 Bom. 1 p. 11). In that case Chagla, C. J., observed. "The entertainment and amusement contemplated by entry 3 of List II with regard to legislation and entry 62 of List II with regard to taxes is not the subjective entertainment or amusement which a person may receive by solving a crossword puzzle or by indulging in any other mental or intellectual pleasure. The entertainment or amusement contemplated is some thing objective outside the person amused or entertained, and with regard to the tax on entertainment and amusement, the tax also is on the spectator who witnesses some amusement or entertainment. Therefore, although it may be said that a person who solves a cross‑word puzzle is amusing himself or entertaining himself, this is not the amusement which the Constitution contemplates in placing the topic of entertainments and amusements in the relevant entries." These observations do not support the view pressed before us. The learned Judges in that case were considering whether the tax imposed was on entertainment or on the income. The tax in that case was on the gross proceeds in the hands of the promoters and was held to be on the business. It will, however, be noticed that the learned Judges were prepared to treat it as tax entertainment, if the tax could have been passed on to the competitors of the cross‑word puzzle. But since they were of the opinion that it was difficult to understand how that tax could be passed on to the competitors, they came to the con clusion that it was a tax on the business of the petitioners. This view, however, was not accepted by their Lordships of the Supreme Court of India in State of Bombay v. R. M. D. Chamarbaugwala and another (A I R 1957 S C 699). Their Lordships observed at page 710 "This, with respect, is taking a very narrow view of the matter. Entry 62 talks of taxes on betting and gambling and not of taxes on the men who bet or gamble. It is necessary therefore, to bear in mind the real nature of the tax. The tax imposed by S. 12‑A is, in terms a percentage of the sums specified in the declaration made under S. 15 by the promote or a lump sum having regard to the circulation and distribution of the newspapers or publication in the State." At another place they observed.‑ "It is a kind of tax which, in the language of J. S. Mil quoted by Lord Hobhouse in Bank of Toronto v. Lambe (1887) 12 A C 575 (D), is demanded from the promoter it the expectation and intention that he shall indemnify himself at the expense of the gamblers who sent entrance fees to him. That, we think, is the general tendency of the tax according to the common understanding of men." The other authority relied upon by the learned counsel for the appellant is Shrikrishna Shaligram Gupta and others v. Municipal Committee, Ujjain (A I R 1953 M B 145). The learned Judges in that case treated a similar tax as a tax on calling. The view taken in that case is not at all correct because I have already observed that the tax has not been imposed on the appellants because they are carrying on the business of the cinema but it is imposed on the entertainment provided by them and it is to be charged on each show which is exhibited by them in their cinema hall. It appears to me that in order to determine whether a particular tax is a tax on calling or it is a tax on entertainment, one shall have to find out whether the person from whom the tax is to be recovered is charged because he is engaged in the business of providing the entertainment. If the tax has been imposed for that reason, in my opinion it will be a tax on his‑ calling, but if the tax has been imposed on the particular entertain ment, irrespective of the fact whether the person providing the entertainment is carrying on that business or not, then there is, no doubt in my mind that it will be a tax on entertainment. In the present case, it is to be noted that the tax imposed cannot only be recovered from the proprietor of the cinema but also from a club, an association or a social organization if they provide any entertainment of the nature contemplated in the order under consideration. This aspect of the impugned tax is a sufficient answer to the contention raised before us that it is not a tax on entertainment but a tax on calling or income. In my opinion therefore the view taken by our learned brother Inamullah, J., on the aspect of the question is correct and I see no reason to differ from the conclusions arrived at by him in the case under appeal. The learned counsel for the appellant pressed no other point raised in the memo. of appeal. I would, therefore, dismiss the appeal with costs. As the matter involved in this appeal relates to the interpretation of the provisions of the Government of India Act, I will grant a certificate for leave to appeal to the Supreme Court. S. A. RAHMAN, C. J. ‑

I agree. K M. A. Appeal dismissed.