Holding

An exemption under the Bombay Entertainment Duty Act does not confer a retention benefit; any entertainment duty collected contrary to the exemption must be returned, and the State may recover it under the doctrine of unjust enrichment.

Summary

The State of Maharashtra appealed a High Court order that quashed demand notices issued to Swanstone Multiplex Cinema Ltd. for entertainment duty collected during a period of statutory exemption. The multiplex had collected the full 45% duty from patrons even though the Act provided a three‑year full exemption and a two‑year concession at 25% of duty. The Supreme Court held that entertainment duty is a tax and that an exemption does not give the proprietor the right to retain tax collected illegally. In the absence of any statutory provision allowing retention, the doctrine of unjust enrichment applies, requiring the multiplex to disgorge the amount to the State, which was directed to donate it to a charitable organization. The appeal was allowed with costs.

Issues considered

Whether the exemption provision in the Bombay Entertainment Duty Act, 1923 confers a right on the multiplex to retain the entertainment duty it collected from patrons.
Whether tax collected in violation of the statutory exemption must be refunded to the State or can be retained by the collector.
Whether the doctrine of unjust enrichment can be invoked in the absence of a specific statutory provision.
Whether Article 296 of the Constitution or Section 72 of the Indian Contract Act are applicable to the recovery of the amount.

Legislation cited

Bombay Entertainment Duty Act, 1923s. 2(d), s. 3(1), s. 3(13), s. 5, s. 5A
Constitution of Indias. Article 142, s. Article 296
Indian Contract Act, 1872s. 72

Subjects

Entertainment dutyTax exemptionConcessionUnjust enrichmentRestitutionStatutory interpretationBombay Entertainment Duty ActArticle 142Article 296Section 72

Judgment

[2009] 11 S.C.R. 378

-{.Ji-
A STATE OF MAHARASHTRA & ORS.
V.
SWANSTONE MULTIPLEX CINEMA (P) LTD.
(Civil Appeal No. 4718 of 2009)

JULY 27, 2009
B
[S.B. SINHA AND DEEPAK VERMA, JJ.]
,..,
,.:l
BOMBAY ENTERTAINMENT DUTY ACT, 1923:

c SS.2(d), 3(1), 3(13) - Entertainment duty- Exemption -
Multiplex theatre complex - Collecting entertainment duty
and retaining the same though it was exempt from
entertainment duty - Held: Entertainment duty is a tax - High
Court was not justified in holding that State Government
conferred upon the theatre the retention benefit - When a
D
person collects tax illegally it has to refund it to tax payers -
~
If tax payers cannot be found, court would either direct the
same to be paid to and/or appropriated by the State - ·
Supreme Court may, in exercise of its jurisdiction under
Article 142 of the Constitution, issue suitable directions -
E State shall realize the amount from the theatre to the extent
it had unjustly enriched itself and pay the same to a voluntary
or charitable organization - Doctrine of unjust enrichment -
Constitution of India, 1950 - Article 142.
j,

F The respondent, a company engaged in the business
of screening of films in its multiplex theatre complex, was
liable to pay duty under the Bombay Entertainment Duty
Act, 1923 @ 45% of payment for admission. The State of
Maharashtra provided exemption in the matter of
G payment of entertainment duty. The respondent availed
of the said exemption. It, was, however, detected that
during the period for which the respondent was not liable
~\~
to pay any duty or was required to pay duty @ 25% only,
it realized the entire duty. The appellants issued a Notice
H 378
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 379
MULTIPLEX CINEMA (P) LTD .
.... )-
to the respondent demanding 75% of the entertainment A
tax reflected by the respondent on its tickets for the period
between 24.6.05 and 22.9.05 amounting to Rs.1,16,95,846
and a further notice dated 21st January, 2006 demanding
Rs.70,39,529/- for the period between 23rd September,
2005 and 5th January, 2006. The respondent filed a writ B
petition before the High Court questioning the legality of
the said demand notice.The High Court allowed the writ
... petition and quashed the Notices. Aggrieved, the State
Government filed the appeal.

Allowing the appeal, the Court,
c
HELD: 1.1. Entertainment duty is a tax. Tax is a
compulsory exaction. There is no equity about tax. It is a
common burden. The State levied the duty in exercise of
its statutory power. Sub-s. (1) of s.3 of the Bombay 0
·i'. Entertainment Duty Act, 1923 talks in imperative terms.
Sub-section (13) of s. 3 of the Act provides for an
exemption. It contains a non-obstante clause. Such
exemption is to be granted to the owner of the multiplex
theatre complexes subject to the terms and conditions E
specified in Clause (b) of s. 3(13) of the Act. The crucial
words are "there shall be levied and collected by the State
Government." Such levy and collection is to be made
~ from the proprietor of a multiplex theatre complex. By
reason of the said provision, no duty is to be paid for the F
first three years, and for subsequent period of two years,
the levy and collection would be at the rate of 25% of the
rate of duty leviable under Clauses (b) and (c) of sub-s.
(1) of s. 3 of the Act. Indisputably, in terms of Clause (c)
of sub-s. (1) of s. 3 of the Act, the rate of entertainment G
.....
duty on payment of admission fixed by the proprietor
... within the limits of Brihan Mumbai Municipal Corporation
would be 45% which amount would become payable from
the sixth year. [Para 14] [398-F-H; 399-A-C]
H
380 SUPREME COURT REPORTS [2009] 11 S.C.R.
--( ....
A 1.2. Clause (b) of sub-s. (13) of s. 3 of the Act uses
the words "concession in duty". It becomes available to
~he proprietor of the multiplex theatre complex only in the
event the terms and conditions specified therein are
fulfilled. Sub-clause (i) of Clause (b) of sub-s. (13) of s. 3
B provides that the proprietor shall not charge less payment
for admission than the prevailing highest rate of
,..
admission at any given time in any of the cinema theatres
in the district in which the complex is situated till the ~
period of concession under Clause (a) is over. The
c "payment for admission" in terms of s.2(d) must be in
relation to the levy of entertainment duty. The words "in
relation to" are of great significance. The payment for
admission being in relation to the levy of entertainment
duty, there cannot be any composite_ptice for the tickets.
[Para 15] [399-C-F]
D
1.3. The respondent from the very inception had been -~
charging Rs. 135/- from each of the cinema-goers., instead
of Rs.103.51, and had indisputably been collecting 45%
of the amount of admission fee by way of entertainment
E duty, i.e., the full duty payable in terms of the provisions
of the said Act and the Rules. Respondent itself has
shown the net rate of tickets which they charged by way
of admission charges, entertainment duty separately.
j,
[Para 15 and 16] [309-G-H; 400-D-E]
F
1.4. A proprietor of a multiplex cinema theatre when
collects tax by way of entertainment duty from the
cinema-goers, it would be entitled to collect such tax
which is subject to levy and collection by the State. The
G authority in his behalf is implicit. For the said purpose,
only the statute provides for the mode and manner in ,.__
lr
which the tax is to be collected. Once the taxes are levied,
s. 3 of the Act entitles the State to collect the same from
the owner of the multiplex theatre complex, subject to the
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 381
... )'
MULTIPLEX CINEMA (P) LTD .

concession which had been given to them. Once it is held A
that the amount realizable from the cinema-goers by way
of entertainment duty comes within the purview of the
definition of 'tax', the High Court was not justified in its
conclusion that the State Government for all intent and

.. ~
purport conferred the retention benefit. If the State
intended to provide for a grant, the same should have
expressly been stated. The respondent cannot be
granted a huge amount by a welfare state indirectly
B

which it cannot do directly. [Para 18 and 19] [401-F, C, G-
H; 402-A] c
R. S. Joshi, Sales Tax Officer, Gujarat and Others v. Ajit
Mills Limited and Another (1974) 4 SCC 98; Union ofAndia
& Ors. v. Solar Pesticides Pvt. Ltd. & Ors. (2000) 2 SCC 703;
Sahakari Khand Udyog Manda/ Ltd. v. Commissioner of
D
Central Excise & Customs (2005) 3 SCC 738, referred to

2.1. The term "concession" is a form of privilege. The
term "exemption" is also a form of privilege. When a
statute confers a privilege, the same must be confined
only to the extent provided for therein. In absence of any E
express statutory provision, allowing the proprietors of
the multiplex theatre to retain the benefit, such an
inference cannot be drawn. The State has power to
impose tax and to grant ,exemption or concession ',in
respect of payment of tax. It has no power in terms of the F
provisions of the Constitution or otherwise to allow an
assessee to collect the tax and retain the same. Assuming
that to that effect the provisions are not very clear but the
superior courts will not interpret the statute in such a way
which will confer an unjust benefit to any of the parties, G
,..,. .., i.e., either the taxpayer or tax collector or the State. A
statute must be read in its entirety, then chapter by
chapter and section by section; the rules validly made
forms part of the Act.The statute must, be interpreted
reasonably. It must be so interpreted so that it becomes H
382 SUPREME COURT REPORTS [2009] 11 S.C.R.

A workable. Interpretation of a statute must subserve a
constitutional goal. [Para 18 and 24] [401-0-E; 404-D-F]

V. Pechimuthu v. Gowrammal (2001) 7 SCC 617,
referred to
B
Advanced Law Lexican by P. Ramanatha Aiyar,
Advanced (New Delhi: Wadhwa & Company, Nagpur (2005)
Vol. 1 p. 944, referred to.

2.2. A statue of this nature, cannot be interpreted in
C such a manner so as to enable an entrepreneur to get
undue advantage to the effect that he would collect tax
from the cinema-goers and appropriate the same. [Para
25] [404-G]

D 3.1. When a person coll~cts tax illegally, he has to
refund it to the taxpayers. If the taxpayers cannot be
found, the court would either direct the same to be paid
to- and/ or appropriated by the State. In a given case this
Court in exercise of its jurisdiction under Article 142 of the
E Constitution of India may also issue other directions, as
has been done in Indian Banks' Association's case. This
Court may take recourse· to such a procedure, as the
State also having granted exemption was not entitled to
collect the duty and as such was not legally entitled
F thereto. It would be better course, as stricto sensu, Article
296 of the Constitution is not applicable. [Para 25. and 26]
[404-G-H; 405-A-D]

Indian Banks's Association, Bombay and Others v.
G Devkala Consultancy Service and Others (2004) 11 SCC 1,
relied on

3.2. This order is passed keeping in view the peculiar
situation as in either event it was cinema-goers who had
lost a huge amount. It would be travesty of justice if the
H owners of the cinema theatre are allowed to appropriate
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 383
MULTIPLEX CINEMA (P) LTD.

such a huge amount for its own benefit. To the said A
extent, doctrine of unjust enrichment may be held to be
applicable. A person who unjustly enriches himself
cannot be permitted to retain the same for its benefit, as
in such a case the doctrine of unjust enrichment can be
invoked irrespective of any statutory provisions. [Para B
26] [405-E-F]

Mafatlal Industries Ltd. v. Union of India (1997) 5 SCC ·
536, relied on.

3.3. Though, in the instant case, the Court is not C
concerned with refund of tax, but then for enforcement
of legal principles, this Court may direct a party to divest
itself of the money or benefits, which, in justice, equity
and good conscience, beiongs to someone else. It must
be directed to restitute that part of the benefit to which it D
was not entitled to. It is, therefore, directed that the State
shall realize the amount to the extent the respondent had
unjustly enriched itself and pay the same to a voluntary
or a charitable organization, which according to it is a
reputed civil society organization and had been E
rendering good services to any section of the
disadvantaged people and in particular women and
children. The Chief Minister of the State is requested to
take up the responsibility in this behalf so that full, proper
and effective utilization of the amount in question is F
ensured. [Para 28 and 29] [407 -D-G]

Case Law Reference :

(2001) 1 sec 617 referred to Para 18
G
(1974) 4 sec 98 referred to Para 20

(1997) s sec 536 relied on Para 21

H
384 SUPREME COURT REPORTS [2009]11 S.C.R.

-1--i.
A (2004) 11 sec 1 relied on Para 25

(2000) 2 sec 103 referred to Para 27

(2005) 3 sec 738 referred to Para 27
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4718 of 2009.

From the Judgment & Order dated 21.10.2008 of the High
Court of Judicature at Bombay in Writ Petition No. 22 of 2006.
c
Shekhar Naphade, Sanjay V. Kharde, Chinmoy A.
Khaladkar and Asha Gopalan Nair for the Appellants.

H.N. Salve, Shyam Dewan, E.C. Agrawala, Mahesh
D Agarwal, Rishi Agrawala, Vineet Naik, Ameet Naik and Ravi
Suryavanshi for the Respondents.
-~
The Judgment of the Court was delivered by

S.B. SINHA, J : 1. Leave granted.
E__
Introduction:

2. Doctrine of unjust enrichment, as opposed to doctrine
bf retention, is the core question involved herein. It arises out
:.}.
F of a judgment and order dated 21.10.2008 passed by a
Division Bench of the Bombay High Court in Writ Petition No.
22 of 2006.

Background facts:
G 3. Respondent is a company registered and incorporated
under the Companies Act. It inter alia is engaged in the ....
business of operating a multiplex theatre, commonly known as
Fame Adlabs in the town of Mumbai for screening of films in
"'
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 3~5
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.]
... )-- the said theatre. Indisputably, the provisions of the Bombay A
Entertainments Duty Act, 1923 (for short "the Act") are
applicable to the said multiplex theatre. Tre State of
Maharashtra, however, adopted a policy decision to provide
certain exemptions in the matter of payment of entertainment
duties. Entertainment duty is payable at the rate of 45% on B
payment for admission by the proprietors so far as the multiplex
.... theatres constituted within the limits of the Brihan Mumbai
Municipal Corporation are concerned .
•
4. Respondent availed the said exemption. It, however, c
even during the period for which it was not liable to pay any
duty or duty at the rate of 25% only realized the entire duty.
Appellants issued a notice dated 5.12.2005 demanding 75%
of the entertainment tax reflected by the respondent on its
tickets for the period between 24.06.2005 and 22.09.2005, i.e.,
D
Rs. 1, 16,95,846/-. On or about 30.12.2005, the appellant issued
another notice demanding Rs. 1, 16,95,846/- within 48 hours.
"' Further on 21.01.2006 issued a further demand notice to the
respondent for a sum of Rs. 70,39,529/- for the period between
23.09.2005 and 5.01.2006.
E
5. The writ petition having been filed questioning the
legality and/ or validity of the said notices of demand, the High
Court by reason of the impugned judgment directed:

"To conclude, it cannot be said that merely because the F
proprietors printed full entertainment tax duty on the
admission ticket though they were only liable to pay 25%
of the entertainment tax duty for a period of 2 years for
which they were eligible for 75% exemption of the
entertainment tax, they are liable to pay 100%, G
entertainment tax without there being any express authority
_,, ..,, of law created by the Statute. On the other hand, it would
- ...I
deprive them of the incentive which has been specifically
offered under the scheme for which the Act came to be
amended and would be in total conflict with the object and
H
386 SUPREME COURT REPORTS [2009] 11 S.C.R.

"1 ~
A reasons with which the Government sought amendment of
the Act nor this can be considered as a case of unjust
enrichment as even, otherwise, the gross admission fee
which the patron is supposed to pay minus the
entertainment tax and other taxes (direct or indirect) would
B ultimately go in the pocket of the proprietors of the multiplex
theaters.

63. Therefore, we find that the State was not entitled to
;ii
claim more than what could be levied as entertainment duty
during the two years period irrespective of the fact that the
c Exhibitors have shown on admission tickets issued to
patrons 45% of the duty though they were liable to pay only
25% of 45% during the incentive period which was of 2
years. The impugned notice's and order Exh A-1 and A-2
and H are quashed and set aside. Rule made absolute
D
with no order as to costs."
~
Contentions

6. Mr. Shekhar Naphade, learned senior counsel
E appearing on behalf of the appellants, in support of this appeal,
urged:

(i) Having regard to the provisions of the Act and the
Bombay Entertainments Duty Rules, 1958 (for short
~

F "the Rules") in terms whereof entertainment duties
were to be levied and collected, the High Court
committed a serious error in opining that the State
had not granted any exemption to the owners of the
multiplex theatre, but the same were by way of
retention benefit.
G
(ii) As admittedly from the tickets issued by the
respondent, it would appear that they had realized
.,. -;

full duties from the cinema-goers payable in terms
of the Act for which they had no authority, the
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 387
~ MULTIPLEX CINEMA (P} LTD. [S.B. SINHA, J.]

' impugned judgment is wholly unsustainable. A

(iii) Any amount of tax illegally realized by the assessee
from the cinema-goers would be hit by Section 72
I
of the Indian Contract Act and, thus, the State would
have right to recover the same in exercise of its B
power conferred on it under Article 296 of the
Constitution of India.

7. Mr. H.N. Salve, learned senior counsel appearing on
behalf of the respondent, on the other hand, would contend:
c
(i) Under Section 3(13) of the Act read with Rule 15
of the Rules which is applicable in this case, the
respondent was entitled to exemption from payment
of the entire duty for a period of three years and duty
at the rate of 25% for the next two years inter alia D
v
in the event it charged the same amount of duty
~'
which was being charged in the neighbouring
theatres for which it used to issue computerized
tickets.
E
(ii) Having regard to the change in economic scenario,
the respondent was entitled and, thus, charged the
entire amount; the total whereof came to Rs. 135/-
at all stages. The State having granted exemption
-\..
to the respondent for the first three years although . F
it ·had charged a total sum of Rs. 135/- from the
cinema-goers, it is estopped and precluded from
demanding any sum when the respondent was
required to pay only 25% of the duties.

(iii) The admission charges collected by the respondent G
! _. being a matter of contract by and between it and
the cinema-goers and the Act having not provided
for any forfeiture clause, the question of the
respondent's being unjustly enriched does not
H

I - 'I~---~----
388 SUPREME COURT REPORTS [2009] 11 S.C.R.

A arise, particularly, when it is not a case where the i --
amount of tax had been deposited which the State
was entitled to keep with it having regard to the
statutory provisions in this behalf.
'
B Statutes
. I
8. The State of Bombay enacted the Act to impose a duty
in respect of admission to entertainment
A

Section 2 of the Act is the interpretation section. "Payment
c for admission" has been defined in Section 2(b) to mean:
"(b) "payment for admission" in relation to the levy of
entertainments duty, includes-

D (i) any payment made by a person who, having been
admitted to one part of a place of entertainment, is
subsequently admitted to another part thereof for
admission to which a payment involving duty or more duty
is required,
E (ii) any payment for seats or other accommodation in a
place of entertainment.

(iii) any payment for a programme or synopsis of, an
entertainment.
F
(iii-a) any payment made for the loan or use of any
instrument or contrivance which enables a person to get
a normal or better view or hearing, of the entertainment
which, without the aid of such instrument or contrivance,
G such person would not get;

(iv) any payment, by whatever name called for any purpose .
whatsoever, connected with an entertainment, which a
person is required to mak'l, in any form as a condition of
H attending, or continuing to attend the entertainment, either
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 389
MULTIPLEX CINEMA(P) LTD. [S.B. SINHA, J.]
._)
in addition to the payment, if any, for admission to the A
entertainment or without any such payment for admissions;

(v) any payment made by a person for admission to a
video exhibition irrespective of whether any eatables or
beverages or both are or are not provided to him against B
such payment;
, .

(vi) any payment made by a person by way of contribution
... or subscription· or installation connection charges or any
other ·charges collected in any manner whatsoever for
television exhibition with the aid of any type of ar.tenna with
c
a cable network attached to it or cable television;

(vii) any payment made by a person to the prop.rietor of a
Direct-to-Home (DTH) Broadcasting service by way of
contribution, subscription, installation or connection D
charges, or any other ch'arges collected in any manner
• whatsoever for Direct-to-Home (DTH) Broadcasting
service with the aid of any type of set top box or any other
instrument of like nature which connects television set at
a residential or non-residential place of connection-holder E
directly to the Satellite; and

_(viii) any payment made by way of sponsorship amount for
a programme which is organised only for invitees, without
• selling tickets." F
Section 2(d) defines "admission to an entertainment" to
include admission to any place in whic.h the entertainment is
held. Section 2(f) defines "entertainment duty" in respect of any
entertainment to mean the entertainment duty levied under
G
Section 3 .
... The Act distin~uishes a multiplex theatre complex, on the
one hand, and a permanent cinema, quasi-permanent cinema,
on the other. "Multiplex Theatre Complex" has been defined in
Section 2(f-a) of the Act to mean an entertainment - cum - H
390 SUPREME COURT REPORTS [2009] 11 S.C.R.

A cultural centre which provides:

"(i) within the limits of Municipal Corporation of Brihan
Mumbai not less than four theatres in a complex with
minimum total seating capacity of 1250; and ·
B
(ii) anywhere else in the State, not less than three theatres
in a complex with minimum total seating capacity of
1000, ... "

"Permanent cinema" or "quasi-permanent cinema" has
C been .defined in Section 2(f-1) to mean a cinema which is
licensed as a permanent cinema or a quasi-permanent cinema,
as the case may be, under the Maharashtra Cinemas
(Regulation) Rules, 1966.

D The charging section is Section 3 of the Act in terms
whereof "there shall be levied and paid to the State Government
all payments for admission to any entertainment" subject to the
exceptions contained therein and the rates specified therefor.

E The relevant portion of Section 3(13) of the Act reads as
under: ·

"(13) (a) Notwithstanding anything contained in any other
provisions of this Act, but subject to the terms and
conditions specified in clause (b), on and with effect from
F the date of coming into force of the Bombay Entertainments
Duty (Amendment) Act, 2001 (Mah. II of 2002), there shall
be levied and collected by the State Government from the
proprietor of a Multiplex Theatre Complex the duty in
respect of any such complex as follows, namely:-
G
(i) for the first three years from the date of commencement ....•
of the Multiplex Theatre Complex, no duty;

(ii) for the subsequent two years, at the rate of twenty-five
H
'·

STATE OF MAHARASHTRA & ORS. v. SWANSTONE 391
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.].
~. ., per cent, of the rate of duty leviable under clause (b) and A
clause (c) of sub-section (1) or, as the case may be, sub-
section (3);

(iii) from the sixth year, full amount of duty leviable at the
rate specified in clause (b) and clause (c) of sub-section B
(1) or, as the case may be, subsection (3):

-
~

*** *** ***
},,
(
(b) The concession in duty as provided under clause (a)
shall be available to the proprietor of the Multiplex Theatre c
Complex subject to following terms and condit1ons,
namely:-

(iii) during the period of concession covered by clause (a)
above, the minimum rates of admission in a multiplex shall D
be determined by the Collector. Such minimum rates of
~
admission shaU not be less than the prevailing highest
rate, excluding the rates of the highest priced fifty seats,
in any of the cinemas theatres in the district in which
multiplex is situated and accordingly such minimum rates E
of admission may be different for morning, matinee and·
other shows;

*** *** ***"
-\·

Section 4 of the Act reads as under:
F

"4 - Method of levy

(1) Save·as otherwise provided by this Act, no person other
than a person who has to perform some duty in connection G
with an entertainment or a duty imposed upon him by any
~ law, shall be admitted to any entertainment except with a
valid printed ticket or complimentary ticket.

(2) Every proprietor of any entertainment in respect of
H
392 SUPREME COURT REPORTS [2009) 11 S.C.R.

.\ . ··f ....
A which the entertainment duty is payable under section 3,
shall apply to the prescribed officer by the fifteenth days
of January of every calendar year, to allow him to pay the
entertainment duty due and payable, and the prescribed
omcer may, on receipt of such application, allow the
B proprietor, on such conditions as the State Government
may specify by general or special order issued in that ~·
behalf, to pay the amount of entertainment duty due. ....
"'--
(a) by a consolidated payment of percentage; to be fixed
by the State Government, of the gross sum received by the
c proprietor on account of payments for admission to the
entertainment and on account of the duty;

(b) in accordance with returns of the payments for
admission to the entertainment and on account of the duty;
D
(c) in accordance with the results recorded by any .....
mechanical contrivance which automatically registers the
number of persons admitted:

E Provided that, the State Government may suo motu, by
general or special order in the Official Gazette, direct the
proprietor of any entertainment or class of entertainment
to pay the amount of duty due, in accordance with the
returns of the results recorded· by any mechanical
;j

F contrivance referred to in clause (b) and (c), as the case
may be.

Provided further that, the prescribed officer may, within
fifteen days from the date of receipt of the application as
aforesaid, reject the application after giving an opportunity
G of being heard to the applicant and recording reasons for
suc_h· rejection. ·
)-

(3) The provisions of sub-section (1) of this section and of
section 5 shall not apply to any entertainment in respect
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 393
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.]

of which the duty due is payable in accordance with the A
provisions of sub-section (2)." ....

Section 6 of the Act provides for entertainments for
charitable or educational purposes exempted. Section 9 of the
Act deals with recoveries. s
9. The Rules framed by the State under the said Act, which
are relevant for our purpose, are as under:

"7. Price of admission, date and show to be shown on,
and stamps affixed to ticket-Except as provided in Rules 'C
15 and 23, every dutiable ticket, not being a complimentary
ticket, issued on payment for admission to· entertainment
shall be in three parts. One part shall remain on the ticket
book and the remaining two parts shall be detached
therefrom and issued to the purchaser. Every dutiable ticket D
shall have each part clearly marked with the price of
admission, and with the date and show for which it is
-available and also with the book number and the serial
numbers (being such series and numbers in respect of the
ticket book and tickets as may be previously approved by E
the prescribed officer) and shall also have securely affixed
to it a stamp of the value of the duty payable out of the said
price of admission :

Provided that the prescribed officer may, upon such F
conditions and for such period as he thinks fit, exempt any
proprietor from the operation of this rule or any part thereof.

xxx xxx xxx
15. Unstamped tickets issued under Section 4(2)(a) and G
(b):-(1 )Every ticket, not being a complimentary ticket,
issued by a proprietor who has been allowed to pay the
duty under the provisions of clause (a) or clause (b) of sub-
section (2) of Section 4, shall consist of three parts. One
H
394 SUPREME COURT REPORTS [2009] 11 S.C.R.

A part shall remain on the ticket book and the remaining two
parts shall be detached therefrom and issued to the
purchaser; and shall bear on each part of such ticket the
price of admission, the book number and the serial number
(being such series and numbers in respect of the ticket
B book and tickets as may be previously approved by the
prescribed officer) and the date on which, and the show
for which it is issued.

(2) On admission of the purchaser, the proprietor shall
c cause to be collected one of the two parts sold to the
purchaser and the other to be returned to him.

(3) The purchaser shall retain his part of the ticket till he
leaves the place of entertainment, and the part retained by
the proprietor sh~ll be retained by him till the entertainment
D
is over:

Provided that the prescribed officer may, upon such
conditions and for such period as he thinks fit, exempt any
proprietor from the operation of this rule or any part
E thereof."

16. Returns required under Section 4(2) (a) and (b):-
Every proprietor making a consolidated payment under clause
(a) of sub-section (2) of Section 4 or making payment in
F accordance with return of the payments for admission undr
clause (b) of sub-section (2) of Section 4, shall, within ten days
of the date of entertainment, submit to the prescribed officer a
return in Form 'B', showing the number of tickets (not being
complimentary tickets) issued at each rate, the serial number
G of ·tickets issued, the gross amount received from the sale of
tickets and the amount of duty payable to the State
Government He shall, if so required by the prescribed officer,
also submit to the said officer, within ten days of the date of
entertainment, a return in Form 'C', showing the price of
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 395
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.]
.. t
programme or synopsis including duty, the number of A
programme or synopsis issued, the gross amount received
from the sale thereof and the amount of duty payable to the
State Government."

Form 'B' attached to the Rules read as under: B
FORM '8'

(SEE RULE 16)

Statement of tickets not being complimentary tickets c
issued when duty is payable under clause (a) or (b) of sub-
section (2) of Section 4

Name and place- of entertainment: .............. Date of
performance: ........... .
D
Number Price of Number Serial Gross Amount Remarks
and tickets of numbers receipts of duty
time of including tickets of tickets payable
show Duty issued to Gover
ment
subject E
to
duty
From to Rs. Rs. I

F

10. We may for the sake of completeness also place on
record that the State had adopted two resolutions, viz., dated
21.09.2000 and 4.01.2003 G
The relevant portion of annexure attached to the resolution
dated 21.09.2000 is as under:

"(1) The three parts of the ticket should be in the following
order. H
396 SUPREME COURT REPORTS [2009] 11 S.C.R.

A Portion Portion remaining Portion to be
remaining with the retained by
with the door keeper the spectators
(A Counter) (D Counter) (P Counter)

8
*** *** ***

, (8) Sale of tickets of the Movie which is exempted from
Entertainment Tax, the tickets should have printed ,on it 'Tax
c Free". And of ticket after deduction of tax should be printed
on the ticket.

xxx xxx xxx
11. Each ticket should be printed in the format shown
D below:

...I
Alphabet of series Roll No. Six digit. Ticket
Code No. of Number
Theatre
Sale Centre
E
Name of Theatre
Address
Show Time Entrance Fee
Show Date/day Entertainment Tax
Seat Group Service Charges J
F Row No. Seat No. ND/P Counter.Total Entrance
Fee Rs."

Clause 3 of the resolution dated 4.01.2003 reads as
under:
G
"3. It was declared by the Government Resolution dated ).-
the 20th September, 2000 that the concessions to be
granted in the Entertainment Tax to the Multi purpose '
Cinema Theatres complexes would be implemented
H during the period from the 17th August, 2001 to 16th
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 397
MULTIPLEX CINEMA (P) LTD. [S.8. SINHA, J.]
,. 't
August, 2002. There was very good response to the said A
scheme in the State. Total 221 applications were received
by Government in the State for grant of availing concession
in the entertainment tax avai.lable to the Multi purpose
cinema theaters complexes Government had decided that
all the applications should be properly scrutinized from the B
point of view of getting concessions in the Entertainment
,, Tax only to the appropriate Multi purpose Cinema Theatre
.. and all the facilities will be definitely reached upto the
public/audience as expected by Government and the
Cinema industry will be developed healthy." c
In the said resolution, it was further stated:

"(i) The applicant will be eligible to get the exemption
from paying entire Entertainment Tax for period-of
first 3 initial years from the date of commencement D
of the Complex, whereas, he will be admissible
exemption (sic) from paying 75 per cent of the
Entertainment Tax due for the fourth and fifth years.
The applicant must pay the Entertainment Tax at the
prescribed rate from the sixth year. IV
E

11. Section 72 of the Indian Contract Act, 1872 reads as
under:

.. "72 - Liability of person to whom money is paid or thing
delivered by mistake or under coercion · F

A person to whom money has been paid, or anything
delivered, by mistake or unde.r coercion, must repay or
return it."
G
12. Article 296 of the Constitution of India reads as under:
.... --4 "296 - Property accruing by escheat or lapse or as bona
vacantia

SUbject as hereinafter provided any property in the territory H
398 SUPREME COURT REPORTS [2009] 11 S.C.R.

A of India which, if this Constitution had not come into
operation, would have accrued to His Majesty or, as the
case may be, to the Ruler of an Indian State by escheat
or lapse, or as bona vacantia for want of a rightful owner,
shall, if it is property situate in a State, vest in such State,
B anc:i shall, in any other case, vest in the Union:

Provided that any property which at the date when it would
have so accrued to His Majesty or to the Ruler of an Indian
State was in the possession or under the control of the
Government of India or the Government of a State shall,
c according as the purposes for which it was then used or
held were purposes of the Union or a State, vest in the
Union or in that State.

Explanation.--ln the article, the expressions "Ruler", and
D "Indian Slate" have the same meanjngs as in article 363."

Statutory Interpretation

13. A statute, as is well-known, must be read in its entirety,
then chapter by chapter and section by section. It is also well-
E settled that the rules validly made forms part of the Act.

14. Entertainment duty is a tax. Tax, as is well-known, is a
compulsory exaction. There is, it is trite, no equity about tax. It
is a common burden. The State levied the duty in exercise of
F its statutory power. Sub-section (1) of Section 3 of the Act talks
in imperative terms. Sub-section (13) of Section 3 of the Act,
wherewith we are concerned, provides for an exemption. It
contains a non-obstante clause. Such exemption is granted
wholly or partly and spread out over a period of five years. It is
G to be granted to the owner of the multiplex theatre complexes
subject to the terms and conditions specified in Clause (b) of
Section 3( 13) of the Act. The crucial words are "there shall be. ...
)..

levied and collected by the State Government. Such levy and
collection is to be. made from the proprietor of a multiplex
H theatre complex. By reason of the said.provision, no duty is to
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 399
MULTIPLEX CINEMA (P) LTD. [S.S. SINHA, J.]
,.. "* be paid. If no duty is to be paid by the multiplex theatre complex, A
the question of the same being levied and collected would not
arise for a period of three years. Similarly, fc~ subsequent
period of two years, the levy and collection would be at the rate
of 25% of the rate of duty leviable under Clauses (b) and (c) of
Sub:section (1) of Section 3 of the Act. Indisputably, in terms B

-•
of Clause (c) of Sub-section (1) of Section 3 of the Act, as noted
hereinbefore, the rate of entertainment duty on payment of
admission fixed by the proprietor within the limits of Brihan
Mumbai Municipal Corporation would be 45% which amount
would become payable from the sixth year.
c
15. Clause (b) of Sub-section (13) of Section 3 of the Act
uses the words "concession in duty". It becomes available to
the proprietor of the multiplex theatre complex only in the event
the terms and conditions specified therein are fulfilled. Sub-
clause (i) of Clause (b} of Sub-section (13) of Section 3 D
A provides that the proprietor shall not charge less payment for
admission than the prevailing highest rate of admission at any
given time in any of the cinema theatres in the district in which
the complex is situated till the period of concession under
Clause (a) is over. Section 2(b) of the Act provides for an E
inclusive provision. The provision is not-exhaustive although
expansive. The payment for admission must be in relation to
the levy of entertainment duty. The words "in relatiort to" are of
., great significance. The payment for admission being in relation
to the levy of entertainment duty, there cannot be any composite F
price for the tickets.

Mr. Salve may be correct that Rule 7 of the Rules would
not be applicable in the instant case but we are not concerned
therewith. But except for complementary tickets, all other tickets
G
are required. to be in three parts. They must fulfill the other
.... 4 criteria laid down therein including.the price for admission, the
ticket number, the serial number, the date and the show for
which it is issued. Respondent from the very inception had been
charging Rs. 135/- from each of the cinema-goers.
H
400 SUPREME COURT REPORTS (2009] 11 S.C.R.

A We may heretobelow notice the method of computation
which the respondent themselves showed vis-a-vis the correct
method of computation and entertainment duty as per the State:

Particulars of Tickets Ticket rate as Corrected method
B per ticket issued of computation
by the Petitioner of entertainment
duty as per G.R.
A) Net rate of tickets 93.05 93.05
c B) Entertainment Duty 41.95 10.46

C) Service Charges Nil Nil
D) Gross rate of ticket 135.00 103.51"
D
16. In view of the aforementioned admitted situation, the
State is entitled to raise a contention that whether the
respondent was entitled to keep the entire gross receipt for the
first three years and 75% of the tax payable for the next two
E years thereafter is the question. Respondent itself has shown
the net rate of tickets which they charged by way of admission
charges, entertainment duty separately. Respondent had
indisputably been collecting 45% of the amount of admission
fee by way of entertainment duty, i.e., the full duty payable in
terms of the provisions of the said Act and the Rules.
F
17. The contention of Mr. Salve that the entire amount of
'Rs. 135/- became chargeable from the cinema-goers as a
price is fallacious. If the sum of Rs. 135/- is the amount which
the owner of a multiplex theatre complex becomes entitled to
G appropriate, the rate of admission would come down from the ·
sixth year in so far as that, whereas for the first three years, the
respondent would be entitled to keep a sum of Rs. 135/- with • ""'
it; for the next two years, it would become entitled to Rs. 124.54
only and Rs. 93.05 from the sixth year.
H
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 4Cl1
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA, J.)
- i 18. Section 3(13)(a) of the Act uses two different terms, A
viz., duty and admission. They must be held to have different
meanings. It is one thing to say that in terms of ~he Rules they
were not liable to show the rate of tax collected from the cinema-
go~rs but it is another thing to say that although they had
collected the full rate of tax from the cinema-goers, they would B
be entitled to retain the benefit thereof. Whether a statute
expressly confers power on an assessee to realize the amount
~
of tax payable to the State from its customers or not, in our
opinion, is wholly immaterial. The fact remains that it has to
collect such taxes which are to be collected from the consumers c
and are required to be levied. Once the taxes are levied,
Section 3 of the Act entitles the State to collect the same from
the owner of the multiplex theatre complex, subject, of course,
to the concession which had been given to them.

The term "concession" is a form of privilege. {See V. D
> Pechimuthu v. Gowrammal (2001) 7 SCC 617); P. Ramanatha
Aiyar, ,.Advanced Law Lexican (New Delhi: Wadhwa &'-
Company, Nagpur, 2005) Vol. 1 p. 944]. The term "exemption"
is also a form of privilege. When a statute confers a privilP.g~,
the same must be confined only to the extent provided fN E
therein.

19. A proprietor of a multiplex cinema theatre when collects
\
tax by way of entertainment duty from the cinema-goers, it would
·-· be entitled to collect such tax which is subject to levy and F
collection by the State. The authority in this behalf is implicit.
For the aforementioned purpose, only the statute provides for
the mode and manner in which the tax is to be collected. Once
it is held that the amount realizable from the cinema-goers by
way of entertainment duty comes within the purview of the
G
defi.nition of 'tax', we see no reason to justify the conclu~ion of
-• .J
the High Court that the State Government for all intent and
purport conferred the retention benefit. If the State intended to
provide for a grant, the same should have expressly been
stated. Respondent cannot be granted a huge amount by a
H
402 SUPREME COURT REPORTS [2009] 11 S.C.R.

A welfare state indirectly which it cannot do directly.

20. In R. S. Joshi, Sales Tax Officer, Gujarat and Others
v. Ajit Mills Limited and Another [(1974) 4 SCC 98], while
interpreting the Bombay Sales Tax Act providing for terms
"collected" and "shall be forfeited", this court held that the terms
8
"fine", "forfeiture" and "penalty" are often used loosely. Recourse
to forfeiture can be taken by way of breach of prohibitory
direction.

Krishna Iyer, J. opined as under:
c
"38. The apparent apprehension that the financial burden
of forfeiture can be avoided if the dealer is prosecuted is
also not correct. The criminal Court can punish only to the
extent specified in Section 64(1 ). Section 37(4), properly
D read forbids penalty plus prosecution, but permits forfeiture
plus prosecution. The word 'penalty' in its limited sense in
Section 37(1) and Section 37(4) does not include forfeiture
which is a different punitive category. Forfeiture is a
penalty, in its generic sense, but not a penalty in the specific ,
signification in Section 37(1) and (4). After all, the ,
E
functionary is exercising quasi-judicial powers and not
insisting on maximum exactions. Every consideration
which is just and relevant must enter his verdict lest the
order itself be vitiated for being unreasonable or perverse
exercise of discretion. The fulfilment of the undertaking I
F must be ensured by necessary guarantees so that the
dealer may not play a double game and the purchaser
stand betrayed. We are not giving any hidebound jj

prescriptions but stating guidelines for taxing-authorities
who exercise these quasi-judicial powers. There is a
G tendency for valiant tax executives clothed with judicial
powers to remember their former capacity at the expense
of the latter. In a we!fare state and in appreciation of the
nature of the judicial process, such an attitude, motivated
by various reasons, cannot be commended. The penalty
H for deviance from these norms is the peril to the order
• STATE OF MAHARASHTRA & ORS. v. SWANSTONE 403
MULTIPLEX CINEMA (P) LTD. [S.B. SINHA,_J.]
passed. The effect of mala fides on exercise of A
administrative power is well-established."

Kailasam, J. observed oS under:

"63 ... It was submitted that where the assessee innocently
collected amounts on the impression that tax was leviable, B
the amounts so collected were forfeited while his obligation
to the purchasers to refund the amounts continued. If the
assessee by a mistake failed to collect tax, from the
purchasers, tax was levied and collected from the
assessee making him suffer in any event. When after a C
costly litigation, the assessee succeeded in establishing
that sales tax cannot be collected on the railway freight on
cement bags or inter-State sales, the Government promptly
forfeited such amounts. We agree these are instances of
hardship to the assessees and deserve Government D
attention. But for that reason the Courts cannot say that the
act is beyond the legislative competence. The fact that in
some cases the dealers are prejudiced would not affect
the validity of the legislation which is the question we are
called upon to decide. On a careful consideration of the E
points raised, I am satisfied that the provisions of Section
37(1) are within the competence of the State Legislature."

21. This Court in Mafatlal Industries Ltd. v. Union of India
" [(1997) 5 SCC 536] noticed Ajit Mills (supra) in the following F
words:

"50. We may at this juncture refer to a very significant
decision in R.S. Joshi v. Ajit Mills Ltd. rendered by a seven-
Judge Constitution Bench. Section 46 of the Bombay Sales
j Tax Act, 1959 provided that no person shall collect any sum G
by way of sales tax which is not exigible according to law.

- (
Section 37 provided for penalties in case of violation of
the provisions of Section 46. Not only the person so
collecting was liable to pay a penalty not exceeding
Rupees two thousand but in addition thereto, any sum H
,_

404 SUPREME COURT REPORTS (2009] 11 S.C.R.

A collected by the person by way of tax in contravention of
Section 46 was also liable to be forfeited to the State
Government."

22. The Act also contains a penal clause in Sections 5 and
5A of the Act. Section 5 of the Act provides for punishment for
B
non-compliance with Section 4 and Section 5A provides for
punishment for non-compliance with other provisions.

23. The High Court, however, opined that had the State
provided for an exemption, it could have invoked Section 6 of
;.
-
c the Act but before us Mr. Salve conceded that that part of the
judgment is not correct as Section 6 has no application in a
case of this nature.

24. In absence of any express statutory provision, allowing
D the proprietors of the multiplex theatre to retain the benefit, it
is difficult for us to arrive at such an inference. The State has
power to impose tax. The State has a power to grant exemption ..\
or concession in respect of payment of tax. It has no power in
terms of the provisions of the Constitution or otherwise to allow
an assessee to collect the tax and retain the same. We will
E
assume that to that effect the provisions are not very clear but .
the superior courts will not interpret the statute in such a way
which will confer an unjust benefit to any of the parties, i.e.,
either the taxpayer or tax collector or the State. "lhe statute must
be interpreted reasonably. It must be so interpreted so that it
F becomes workable. Interpretation of a statute must subserve
a constitutional goal.

25. A statue of this nature, in our considered opinion,
cannot be interpreted in such a manner so as to enable an
G entrepreneur to get undue advantage to the effect that he would
collect tax from the cinema-goers and appropriate the same.
When a person collects tax illegally, he has to refund it to the
taxpayers. If the taxpayers cannot be found, the court would
either direct the same to be paid and/ or appropriated by the
~
-
>

H State. In a given case, this Court in exercise of its jurisdiction
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 405
~ MULTIPLEX CINEMA {P) LTD. [S.8. SINHA, J.]

- ~
under Article 142 of the Constitution of India may also issue A
other directions, as has been done in Indian Banks'
.,, Association, Bombay and Others v. Devkala Consultancy
Service and Others [(2004) 11 SCC 1] in a similar situation
where it was difficult for the court to direct refund of a huge
amount to a large number of depositors from whom the bank B
had illegally collected, this Court directed that the amount be
spent for the benefit of the disabled in terms of the provisions
of the Persons with Disabilities (Equal Opportunities,
~
Protection of Rights and Full Participation) Act, 1995.

This Court may take recourse to such a procedure as the
c
State also havjng granted exemption was not entitled to collect
the duty. In other words, it having granted an exemption, was
not legally entitled thereto.

26. We think that it would be better course, as strict sensu, D
Article 296 of the Constitution is not applicable.
~

We are passing this order keeping in view the peculiar
situation as in either event it was cinema-goers who had lpst a
huge amount. It would be travesty of justice if the owners of the
E
cinema theatre become eligible to appropriate such a huge
amount for its own benefit. To the aforementioned extent,
doctrine of unjust enrichment may be held to be applicable. A
person who unjustly enriches himself cannot be permitted to
.. retain the same for its benefit except enrichment. Where it
F
becomes entitled thereto the doctrine of unjust enrichm~nt can
""" be invoked irrespective of any statutory provisions.

27. In Mafatlal Industries Ltd. (supra), Section 72 of the
Contract Act providing for restitution may be taken recourse to.
Doctrine of 'unjust enrichment' was resorted to, observing : G

- ~
"(iii) A claim for refund, whether made under the provisions
of the Act as contemplated in Proposition (i) above or in
a suit or writ petition in the situations contemplated by
Proposition (ii) above, can succeed only if the petitioner/
H
406 SUPREME COURT REPORTS [2009] 11 S.C.R.
""
A plaintiff alleges and establishes that he has not passed on
)-
-
the burden of duty to another person/other persons. His
refund claim shall be allowed/decreed only when he
establishes that he has not passed on the burden of the
duty or to the extent he has not so passed on, as the case
B may be. Whether the claim for restitution is treated as a
constitutional imperative or as a statutory requirement, it
is neither an absolute right nor an unconditional obligation
but is subject to the above requirement, as explained in
the body of the judgment. Where the burden of the duty has •
been passed on, the claimant cannot say that he has
c suffered any real loss or prejudice. The real loss or
prejudice is suffered in such a case by the person who has
ultimately borne the burden and it is only that person who
can legitimately claim its refund. But where such person
does not come forward or where it is not possible to refund
D
the amount to him for one or the other reason, it is just and
appropriate that that amount is retained by the State, i.e.,
by the people. There is no immorality or impropriety
involved in such a proposition.

E The doctrine of unjust enrichment is a just and salutary
doctrine. No person can seek to collect the duty from both
ends. In other words, he cannot collect the duty from his
purchaser at one end and also collect the same duty from
the State on the ground that it has been collected from him ...
F contrary to law. The power c;>f the Court is not meant to be
exercised· for unjustly enriching a person. The doctrine of ;...
unjust enrichment is, however, inapplicable to the State.
State represents the people of the country. No one can
speak of the people being unjustly enriched."
G
{Se~ Union of India & Ors. v. Solar Pesticides Pvt. Ltd,
& ors. [(2000) 2 sec 703]}.
•
In Sahakari Khand Udyog Manda/ Ltd. v. Commissioner
of Central Excise & Customs [(2005) 3 SCC 738], this Court
H has held:
STATE OF MAHARASHTRA & ORS. v. SWANSTONE 407
MULTIPLEX GIN.EMA (P) LTD. [S.B. SINHA, J.]

"45. From the above discussion, it is clear that the doctrine A
of "unjust enrichment" is based on equity and has been
accepted and applied in several cases. In our opinion,
therefore, irrespective of applicability of Section 11-8 of
the Act, the doctrine can be invoked to deny the benefit to
which a person is not otherwise entitled. Section 11-B of B
the Act or similar provision merely gives legislative
recognition to this doctrine. That, however, does not mean
that in the absence of statutory prdvision, a person can
claim or retain undue benefit. Before claiming a relief of
refund, it is necessary for the petitioner-appellant to show c
that he has paid the amount for which relief is sought, he
has not passed on the burden on consumers and if such
relief is not granted, he would suffer loss."

28. It may be true that hereat we are not concerned with
refund of tax but then for enforcement of legal principles, this D
~ court may direct a party to divest itself of the money or benefits,
which in justice, equity and good conscience belongs to
someone else. It must be directed to restitute that part of the'
benefit to which it was not entitled to.
E
29. We, therefore, direct that the State shall realize the
amount to the extent the respondent had unjustly enriched itself
and pay the same to a voluntary or a charitable organization,
which according to it is a reputed civil society organization and
had been rendering good services to any section of the F
disadvantaged people and in particular women and children.

We would request Hon'ble the Chief Minister of the State
to take up the responsibility in this behalf so that full, proper and
effective utilization of the amount in question is ensured.
G
30. For the reasons aforementioned, the appeal is allowed
with the aforementioned directions with costs. Counsel's fee
assessed at Rs. 50,000/.

R.P. Appeal allowed.
H