Jayachandra Reddy.J.:-

(1) Hyderabad race club, represented by its secretary, has filed this application to issue a writ of certiorari and quash the order of the betting tax officer, the 1st respondent, in d. O n. Rc. D. I. 1662 of 1973 dated 17th february, 1975 demanding extra amounts as taxes due forthe years 1961 to 1973.

(2) The facts which led to the filing of thi> application are not in dispute and are as follows. - the petitioner is a limited company licensed under the andhra pradesh (telangana area) horse racing and betting tax regulation, hereinafter referred to as "the regulation" for conducting race meetings and permitted to have certain forms of betting in the said meetings. Till 1961 the petitioner has been paying all the taxes payable under the said regulation from its inception. Under section 3 of the regulation, tax is payable on admission to race meetings, at the rate of 25% of the admission fee. The petitioner collects the admission fee from the race visitor who seeks admission to the race meeting and also the tax thereon and pays the tax thus collected to the government. The petitioner had been collecting the tax in the said manner and paying the same to the government for all these years and there was no dispute between the parties regarding the quantum of tax payable. While so, the 1st respondent by his letter dated 17th august, 1974 issued a notice demanding the payment of rs. 3,35,119 for the years 1961 to 1973 as the tax due for these years according to the 1st respondent the reason for raising the demand is that as per the regulation the tax collected by the petitioner also should be taken into account for the purpose of calculating 25 per cent of the admission fee. In other words, the contention of the 1st respondent is that the club was paying the tax at the rate of 25 per cent on the admission fee only, but the tax at the rate of 25 per cent should be calculated on both the amounts collected by the race club, viz,, the admission fee and the tax. On the said reasoning the demand was made. The petitioner gave a reply saying that what was being paid all these years was correct and the respondents also were accepting the same as it was in accordance with the provisions of the regulation and that the tickets show the amounts of admission fee and the betting tax separately and the petitioner is only liable to pay 25 per cent on the admission fee and not on the tax collected also. The petitioner also informed the 1st respondent that there was no provision for revising the assessments or calling on the petitioner to pay extra sum after there is a full and final payment to the authorities concerned. Though there were repeated representations, the 1 st respondent issued the impugned order dated 17th february, 1975 demanding the payment of various amounts mentioned therein for the years 1961 to 1973. The petitioner again made a representation dated 20th february, 1975 to the 2nd respondent, the government of andhra pradesh, and no reply has been received. The plea of the petitioner is that under the regulation the only duty on the part of the petitioner is to charge the tax at the rate of 25 per cent on the admission amount collected, which amount also is collected from the persons who seek admission, and pay it to the government. There is no liabilty on the part of the petitioner to pay again a tax of 25 per cent on the tax amount also, as the same is not warranted either by the regulation or the rules made thereunder. The petitioner further pleaded that as and when admission fee was being collected, the tax was charged and being paid regularly and there was no default, and at any rate the present demand amount re - assessment and the same cannot be done at this distance of time.

(3) The 1st respondent in his counter - affidavit stated that whenever a race meeting is held at which payments are made for admission, there shall be charged levied and paid to the government a tax at the rate of 25 per cent on all payments so made. In other words, the contention of the 1st respondent is that as per the provisions of law the tax has to be calculated and paid on the gross sum received by the petitioner. It is also stated that there is no question of making any reassessment and the petitioner is asked to pay the tax payable by him according to the provisions of the said regulation.

(4) The learned counsel for the petitioner mainly contended that the petitioner, collects the admission fee from the visitor and as agent of the government also collects 25 per cent tax thereon and pays the same to the government and the printed tickets separately show the admission fee and the tax collected and therefore, the question of paying further tax at the rate of 25 per cent on the tax amount collected does not arise as the same would amount to tax on tax. The learned government pleader on the other hand contended that the petitioner has to pay the tax at the rate of 25 per cent on the gross amount collected, on the ground that the payment for admission includes the tax also.

(5) To appreciate these rival contentions, it becomes necessary to refer to section 3, which reads thus : -

"3. Tax on payment for admission to race meetings. - (1) whenever a race meeting is held at which payments are made for admission there shall be charged, levied and paid to government tax at the rate of 25 per cent on all payments so made. (2) on the application of the manager of such race meeting government may permit him on such conditions as they may prescribe. (a) to pay the amount of the tax due by means of a consolidated payment of 25 per cent of the gross sum received by him on account of payments for admission and on account of the tax, or (6) to compound for the aggregate of the tax leviable under sub - section (1) by the payment of such sum as government may fix in this behalf."

Relying on sub - section (1) of this section, the learned counsel for the petitioner contended that the race club is authorised to charge the tax at the rate of 25 per cent on the admission fee and levy the same from the race - goer and pay that amount to the government and all these years the petitioner has been collecting the tax in this manner and has been paying the same to the government. It is also his contention that section 3 (1) does not provide for levying the tax at the rate of 25 per cent on the gross amount collected by the petitioner for admitting a race - goer. In this context he also referred to sub - section (2) of section 3 which is distinct and which provides for the payment of the tax due by means of a consolidated payment of the 25 per cent of the gross sum received by the race club on account of payment for admission and on account of tax, or to compound for the aggregate of the tax leviable under sub - section (1) by payment of such sum as the government may fix in this behalf.

(6) A plain reading of clause (a) of sub - section (2) of section 3 makes it clear that the payment of tax at the rate of 25 per cent of the gross sum arises in cases of the tax payable by way of a consolidated payment under the permission obtained from the government subject to certain conditions as may be prescribed. In this context we are not concerned with clause (b) of sub - section (2) of section 3. It is not the case of either party that the petitioner made any such application under section 3 (2) of the government for permission to pay the amount of tax due by means of consolidated payment, as provided under section 3 (2) (a) therefore, there is considerable force in the submission of the learned counsel for the petitioner that under sub - section (1) of section 3 the tax at the rate of 25 per cent cannot be levied on the gross amounts received by the club on account of payments for admission.

(7) The learned government pleader relying on the definition of "payment for admission" contended that even under section 3 (1) the tax has to be paid on the gross amounts collected. Section 2 (c) reads thus:

"' payment for admission' includes any payment made by a person who having been admitted to one part of a race course is subsequently admitted to another part thereof for admission to which a payment involving a tax or a higher rate of tax is required, and any payment for seats or other accommodation in a race course."

According to the learned government pleadet this defimtion contemplates that the paymenr for admission includes the admission fee as wel as the tax collected by the race club and as per section 3 (1) the government can chargel and levy the tax at the rate of 25 per cent on such gross payments of admission and the same has to be paid by the petitioner to the government. We see no force in this submission. A careful reading of the definition "payment for admission", which is no doubt an inclusive one, shows that the payment for admission does not include the tax as such. On the other hand, what is included is any payment made by a person who having been admitted to one part of the race coune is subsequently admitted to another part for which a payment is made involving a tax or a higher rate of tax, etc. This only shows that when a person is admitted to one enclosure paying the admission fee, he need not pay the full amount of admission fee when admitted to another enclosure and that the payment for admission into the latter enclosure includes the payment of admission fee for the earlier enclosure. We are unable to see how the definition of "payment for admission" is of any assistance in reading section 3 (1) as to mean that the levy of the tax should be at the rate of 25 per cent on gross amount collected by the race club. The words "charged, levied" in this section do not necessarily mean that it is the government that charges the tax at the rate of 25 per cent on the gross amount, col leeted by the race club. On the other hand a reading of the entire sub - section (1) of section 3 shows that whenever a race meeting is held at which payments are made for admission, tax at the rate of 25 per cent shall be charged by the club on each such admission and the same shall be levied by the club from the race - goer and the amounts thus collected should be paid to the government. It is true that generally it is the government that can charge the tax, but in the present case the government has prescribed a rate of tax which should be charged and the race club as an agent collects the same at that rate. Further, the tickets which are enclosed as annexures to the writ petition clearly show that the admission fee and the tax at the rate of 25 per cent collected are shown in two different figures. The learned government pleader however sought to contend that section 3 (1) cannot be interpreted in that manner and the language does not indicate clearly that the petitioner charges and collects the tax only as an agent of the government. In this context, if we refer to some of the relevant rules, the meaning underlying section 3 (1) becomes very clear. Craies on statute law (4th edition at page 144) says: "where the language of an act is ambiguous and difficult to construe, the court may, for assistance in its construction, refer to rules made under the provisions of the act, especially where such rules are, by the statute authorising them, directed to be read as part of the act. " in re weir mellish, l. J. , observed thus: -

"we do not think that any other section of the act throws any material light upon the proper construction of this section, and if the question had depended upon the act alone we should have had great doubt what the proper construction was; but we are of opinion that, where the constructi on of the act is ambiguous and doubtful on any point, recourse may be had to the rules which have been made by the lord chancellor under the authority of the act, and if we find that in the rules any particular construction has been put on the act, that it is our duty to adopt and follow that construction."

In ramanuja v. Pichu iyengar venkataramana rao, j. Held that in case of doubtful or difficult construction of the act, it is permissible to look into the statutory rales. In promod bhat v. Kanwar raj a division bench of the bombay high court consisting of chagla, c. J. And dixit, j. Held that in cases where there is ambiguity in the language used by the legislature, the rules framed may help the court in coming to the right conclusion as to the construction to be placed upon a particular provision in the law.

(8) It is thus seen that it is well - settled that the provisions of the statute can be construed with the aid of the rules made thereunder and as observed by mellish l. J. , if in the rules any broad construction has been put on the act, then it is the duty of the court to adopt and follow that construction.

(9) Now let us see the relevant rules made under the regulation. "tax" is defined in rule 2 (3) in the following terms: - " 'tax' means a tax charged, levied and paid to the government under the regulation. " it has to be noted that these words are the same as we find in section 3 (1) of the regulation. Rule 4 lays down that the manager of a race meeting who has been allowed to make a consolidated payment of the tax on race meeting under the provisions of section 3 (2) (a) shall not issue or cause or permit to be issued any ticket being a ticket authorising any person to be admitted on payment to the race meeting unless the price of admission is legibly printed. Under the same rule it is stated that the price of admission means the price inclusive of the amount of the tax. Rule 4 applies only to a case where the manager is permitted under section 3 (2) (a) to pay the amount of tax due by way of a consolidated payment and the meaning of "price of admission" as mentioned in rule 4 clearly shows in cases covered by section 3 (2) (a) it is inclusive of the amount of tax, and a statement to that effect shall be marked on every ticket. If we examine rule 12, the difference between section 3 (1) and section 3 (2) becomes, very clear. Rule 12 is in the following terms: -

"12. Conditions for issue of tickets for admission. - the manager of a race course or a race meeting who has not been permitted or allowed to consolidate or compound the tax shall not issue or cause or permit to be issued any ticket being ticket authorising any person to be admitted to any race course or race meeting unless the price of admission and the statement hereinafter mentioned are legibly printed, stamped or otherwise marked on the ticket. For the purpose of this rule price of admission means the price exclusive of the tax on horse racing and there shall be marked on every such ticket a statement that the price marked thereon excludes the tax on horse racing."

In this rule it is seen that the "price of admission" means the price exclusive of the tax on horse racing and such a statement shall be marked on every ticket stating that the price marked thereon excludes the tax on horse racing. It is also seen that this rule applies to the manager of the race club, who has not been permitted or allowed to consolidate or compound the tax. There is another set of rules framed under g. O. No. 2043, revenue, dated 1st november, 1953. In those rules we find under the heading "tax on admission to race meetings" that the tax at the rate of 25 per cent of the payments for admissions to race meetings is due to be paid to the government; and under the title "methods of payment" three methods of payment of tax to the government are prescribed. The first is by submission of return, the second is by means of a consolidated payment on the gross sum received on account of payments for admission to the last race meeting, and the third one is by way of composition by payment of a lumpsum amount as may be fixed. These three methods are in conformity with section 3 (1) , section 3 (2) (a) and section 3 (2) (b) respectively. In the latter rules with reference to the procedure for tax payments by means of returns under para. 3 - 1 it is further mentioned that the price of admission exclusive of the tax should be clearly printed on the tickets sold and the manager of the race meetings should furnish a return in form - c showing separately for each class of payment the gross sum received by him on account of payments for admission to the race course or race meetings within seven days from the date of the race meeting. Then under s. O. 137 under the heading "rate of tax", it is mentioned thus : -

"the following are the rates of taxes payable under the act. 1. On admission to race meetings : - (a) on the basis of returns - the tax payable is 25 per cent of the prices for a admission. (b) by means on consolidated payment on the gross amount - the tax payable is 25 per cent on the gross amount realised for admission."

Here also a distinction is made with reference to the two methods of payment, viz. T one on the basis of returns and the other by means of consolidated payment on the gross amounts. Therefore, this distinction has been clearly kept througtout. The payment of tax at the rate of 25 per cent on the gross amount including tax arises in the case where the club is permitted to pay the amounts by a consolidated payment. Further in form - c appended to the first set of rules the columns are separate. We find in column (1) "price of admission" and in column (6) the tax is separately mentioned. Therefore, these rules make it clear that only in a case where the race club is permitted under section 3 (2) (a) to pay the amount of tax by means of consolidated payment, the 25 per cent of tax can be levied on the gross sum received by it on account of payments for admission. On the other hand, under section 3 (1) read with rule 12 as well as the second set of rules mentioned above, the race club collects the tax at the rate of 25 per cent on the admission fee as an agent of the government and pays the, same every week by submitting the returns, viz. , one of the methods of payment recognised under the rules. That apart, section 4 which deals with the admission to race meetings lays down that unless the manager of the race meeting makes arrangements with the government for furnishing returns of the payments for admission and has given security upto an amount and in the manner approved by the government for payment of the tax, no person shall be admitted for any such race meeting. It is further laid down therein that every ticket should be stamped with an impr ssed, embossed engraved or adhesive stamp used by the government, or in special cases a mechanical contrivance which automatically registers the number of persons admitted, can be permitted. Section 6 lays down that section 4 does not apply to any race meeting in respect of which the manager has been permitted under sub - section (2) of section 3 to make a consolidated payment. Therefore, even in the regulation itself a distinction in this regard can be found. However, the rules clarify the position. For these reasons the contention of the learned counsel for the petitioner that the race club collects the tax as an agent of the government and any levy of further tax on the gross amount will amount to tax on tax, has to be accepted.

(10) The learned counsel for the petitioner also contended that by issuing the impugned notice the 1st respondent is re - opening the assessments of the past years and that the action of the 1st respondent amounts to reassessment which is not permissible. In the counter - affidavit it is stared that it is only collecting the taxes due under the regulation and if the taxes due have not been collected for these years it is only a mistake and it can be rectified now. If we accept the plea of the learned government pleader the impugned notice may not amount to re - assessment. However, we need not go into this question, as we have agreed with the learned counsel for the petitioner on the first point.

(11) In the result, the writ petition is allowed, the impugned order is quashed and a writ is issued as prayed for. But in the circumstances there shall be no order as to costs. Advocate's fee rs. 150, writ petition allowed.