Karnataka HC quashes notices demanding 2% cess from movie tickets as govt. admits that law is yet to be enforced
The Karnataka High Court quashed notices demanding a 2% welfare cess from movie theaters because the state government admitted the underlying Act has not yet been enforced. The court reserved the right for petitioners to challenge the law's legality once it officially takes effect.
Why it matters
This ruling highlights the importance of procedural compliance in tax and welfare legislation to prevent arbitrary financial burdens on businesses.
The High Court of Karnataka on Thursday quashed the circulars and notices issued by the regulatory authorities asking the multiplexes and cinema theatres to collect 2% welfare cess with effect from September 1 under the provisions of the Karnataka Cine and Cultural Activists (Welfare) Act, 2024, as the State government admitted that the Act itself is yet come into force.
Justice H.T. Narendra Prasad passed the order while allowing the petition filed by Multiplex Association of India and PVR INOX Ltd.
Earlier, the government informed the court that notices were withdrawn on September 9 while admitting that gazette notification announcing the date from which the Act would come into force, was yet to be issued.
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