Khaitan & Co successfully represented the Multiplex Association of India (MAI) and PVR INOX before the Hon’ble Karnataka High Court in a writ petition challenging the validity of the Office Order dated 29.08.2026, which directed multiplexes to deposit a 2% cess on cinema tickets with effect from 01.09.2026, and the show cause notices issued to multiplexes threatening coercive action for non-payment of the cess. The petition further raised a substantial constitutional challenge to the vires of the Karnataka Cine and Cultural Activists (Welfare) Act, 2024 (Impugned Act) and the Karnataka Cine and Cultural Activists (Welfare) Rules, 2025 (Impugned Rules).
It was contended that in the absence of an official gazette notification bringing the Impugned Act and the Impugned Rules into force, the said Office Order and the show cause notices were without jurisdiction. It was further contended that, in any event, the Impugned Act and the Impugned Rules were ultra vires the Constitution of India, even if they were in force. During the proceedings, the Government Pleader acknowledged that the Impugned Act had not yet been brought into force by way of an official gazette notification. The State also placed on record an Office Order dated 09.09.2026, passed on an emergent basis by the Department of Labour, Government of Karnataka, after the filing of the writ petition, withdrawing the earlier Office Order dated 29.08.2026.
In view of the fact that the Impugned Act had not been brought into force, the Hon’ble High Court held that the show cause notices issued to the multiplexes could not be sustained and accordingly quashed the same. The Court kept the question of the unconstitutionality of the Impugned Act and the Impugned Rules open, as neither had been brought into force. The writ petition was consequently disposed of in favour of MAI and PVR INOX by order dated 10.09.2026.
The team comprised Sahil Narang (Partner), Nikhilesh Rao (Partner), Madhavam Sharma (Principal Associate), Ayushman Kacker (Principal Associate), Harsh Gupta (Senior Associate), Swati Panda (Associate), and Haritaa Nair (Associate). Senior Counsel Mr. Uday Holla and Senior Counsel Mr. V. Srinivas Raghavan appeared along with the team for the Multiplex Association of India and PVR Inox Limited.
