The Supreme Court recently sent back a matter to the Telangana high court to consider whether cinema owners pass on the benefit of tax exemption to the public or not. The bench of Chief Justice D.Y. Chandrachud and Justices P. Narasimha and J.B. Pardiwala passed the order while considering a challenge against a judgement of the high court passed in 2019.
The Telangana state government had by four government orders granted entertainment tax exemption to cinemas under section 8 of the Andhra Pradesh Entertainment Tax Act, 1939. A PIL was filed by Cine Prekshakula Viniyoga Darula Sangham in the Telangana high court that though the cinemas availed of the tax exemption, they did not pass on the benefit to the cinema patrons. The high court dismissed the plea on the ground that the subject matter of the plea i.e. the four government orders (G.O.s) had become infructuous by efflux of time. The apex court said, this approach of the high court was not correct. It set aside the 2019 order. The Supreme Court said, “Having regard to the ambit of the reliefs which have been sought in the petition, the high court was in error in disposing of the petition as infructuous. We accordingly allow the appeal and set aside the impugned order dated 23 October, 2019.” The writ petition (PIL) was remitted back to the high court for the state of Telangana to dispose of afresh. The Supreme Court asked the high court to dispose of the matter in three months.