Payment of Compensation to Local Authorities
 

(1) 1[Subject to the provisions of section 13A ] the proceeds of the tax payable under section 4 2(x x x) and the sum payable under Section 5 ] and collected every year in respect of entertainments held within the limits of any local authority shall be apportioned as follows:
(a) three per cent of the proceeds of the tax to be credited to the State Government.
(b) 3(ninety per cent) of the proceeds of the tax to be paid to the local authority; and
(c) 4(seven per cent) of the proceeds of the tax to be expended for the purposes of promoting the cinematograph films and arts:
Provided that the State Government may direct that the 3( ninety percent) of the proceeds of the tax shall be distributed between the local authority aforesaid and any other local authority or authorities in the neighborhood in such proportions as the State Government may fix:
5[Provided further that nothing contained in this sub-section shall be deemed to prevent the State Government from modifying at any time any order which assigns 6( the entire balance of 3(ninety per cent) of the proceeds of the tax to a local authority, or as the case may be, fixes the proportions in which 7( such proceeds) be distributed among local authorities if, in the opinion of the State Government
(1) the said order had been passed under any mistake, whether of fact of or law; or

(2) the said order has been passed in ignorance of, or without duly taking into account any material fact; or

(3) any new circumstances have arisen since the order was passed which make it expedient to modify it:
Provided also that no such modification shall be made in respect of any period after the expiry of two years from the end of the period.]
Explanation: - In this sub-section, "year" shall mean the financial year.


1 Act No.12 of 1958 has added this w.e.f.1-10-1958.
2 Act No. 24 of 1984 has omitted the words "and Section 4C" w.e.f. 1-1-1984.
3 Act No. 5 of 1975 has substituted this for the words "ninety five percent" w.e.f. 1-1-1975 .
4 Act No. 5 of 1975 has substituted this for the words "two percent" w.e.f. 1-1-1975 .
5 Act. No. 6 of 1953 has inserted this w.e.f. 29-4-1953.
6 Act. No. 11 of 1956 has substituted this w.e.f. 30-4-1956.
7 Act No. 8 of 1969 has substituted this for the words "such balance" w.e.f. 24-1-1969.
  
(2) 1[Whenever any modification is made under the second proviso to sub-section (1) in respect of any period, the State Government may recover from any local authority any sum paid to it in excess of what it would have been entitled to in accordance with the order as modified.]

1 Act No. 8 of 1969 has substituted this sub-section w.e.f. 24.1.1969.