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TS Saar GaPOSPENP Anan ee N IER Ne nn ert, ' my a
; EXECUTIVE OFFICER, BALLABGARH & ANR
827 , KAMTA PRASAD AGGARWAL ETC, e . December 20, 1973 | ( i
A. N. Ray, CJ., H, R. KHANNA, K. Be ( AND P, N, Bmawane ne Ay ALAGIRISWaMiy
Constitution of India, 1950, Art, 276—Scope of of the authorities mentioned in Article can Pon -. gre Pega ri oe - Under the Punjab Professions, Trades, Calij E ; Adt, 1956, O professional tax on a graded scale, subject poyment Taxation Rs. 250 per annum, had beea and was being collecied by the State of then The Panchayat Samiti, Ballabgarh, in Haryana, issued 9 Gotice that it intended | to lew professional tax at the maximum rate of Rs. 200 per annum accondin i to the Scheduled specified under the Gram Panchayat Samitis and Zula Parishade : Act, 1961. The appellants, in writ petitions in the High Court, contended ‘ that the imposition was jn violation of Article 276 Cf the Constitution in thar the maximum limit of Rs, 250/- mentoned in the Article applies to the totality of the tax Tecovered by all the authorities mentioned in the Article taken logether. The High Court dismissed the Petitions. /
Dismissing the appeals to this Court,
HELD: The High Court was right in reaching the conclusion that the State as well us the authorities mentioned in the Article can each impose ax up to a limit of Rs. 250, [830 G—H] .
(1) The power of the State to levy the tax is derived from Eotry 60 of List If of the VIL Schedule to the Constitution dealing with taxes on professtom, trades, callings and employments. The Siate Legislature is therefore, competent to legislate and levy taxes on professions, trades and employments i and may also by law, confer a similar authority on a local authority, [828 F} \
(2) A tax on profession can be imposed if a person carries on a professions. ' Such a tax on criteatic ts irrespective of the question of income. [829 G) |
(3) The words in the Article that the total amount payable to the State or to any one Municipality, District Board, Local Board or local ae canfot mean that the word ‘or’ is used in a conjunctive sense bo Bas me ue for the word ‘and’. This is clear from the proviso to Article i nidd pe rons Provides that if before the adegpennrnnger’ oe he 2D re . P wae authority had imposed a tax earning the li ch ta continuce and this indicates that both can tax separately to the limit imposed: by the Article, [830 B] ;
(4) The words ‘any one person’ in ngaged ’ with any one ee Ag One and the same 76 and peg both ts ‘a more than one of the items suggested ia_Art. oS. 4Mposition ; more than one item. he ther. [ wuthority hevying "varkonts taxes and not to all authorities put ~¥ nish 250/- as con (3) If the total of the taxes should not erst Oe peottonl tax of ¥ the oppellant it will meaa that if @ Log niero ‘on him a similar tax only *. 150 to the Stale the local authority can Ke to the anomalous consequences, Upto the balance of Rs, (00, Tis would tea ni persons with lower incomes, nunwly (a) one of the authorities will have to nd (b) if oe authority wil While those with hipher incomes will escunes AME 0D) 1. imposed by the. impose a tnx of the balance sum left after dedients se Stute, ull the other authorities may not impos
$28 SUPREME COURT REPORTS [1974] 2 s.c.r.
Civit APPELLATE JuRISvICTION Civil Appeals Nos. 2427-2428/68
.. From the Judgment and Order dated the 25th August, 1967 and 47th May 1968 of the Punjab and Haryana High Court in C.W. Nos. 355 and 354 of 1967,
Brij Bans Kishore and M. M. Kshatrya, for the appellants.
S..K. Mehta, K. R. Nagaraja, M. Qunmaruddin and Vinod Dhawan, for respondents No. 1.
The Judgment of the Court was delivered by :
Ray, C.J.—These appeals are by certificate from the judgment ‘dated 17 May, 1967 of the Full Bench of the High Court of Punjab and Haryana.
The appellants in writ petitions in the High Court challenged the legality of notices issued by the Executive Authority, Ballabgarh Panchayat Samiti claiming Rs. 200/- on account of profession tax for the year 1963-64. The notice was issued under section 76 of the Gram Panchayat Samitis and Zila Parishads Act, 1961 referred to as the 1961 Act.
The appellants contended that the claim under section 76 of the 1961 Act was in violation of Article 276 of the Constitution because a similar professional tax on a graded scale subject to a maximum limit of Rs. 250/- per annum had been and was being collected by the* State of Haryana.
The Full Bench of the High Court upheld the contention of the respondents that the recoverics can be made by cach one of the authoritics mentioned in Article 276 of the Constitution to a maximum sum of Rs. 250/- per annum.
The power of the State to levy tax is derived from Entry 60 of List IJ in the Seventh Schedule of the Constitution. The Entry speaks of taxes on professions, trades, callings and employments. The State legislature is, therefore, competent to legislate and levy taxcs on professions, trades and employments, The State legislature may also by law confer a similar authority on a Municipality, District Board, Local Board or other local authority.
The appellants contended that the maximum limit of Rs. 250/mentioned in Article 276 applies to the totality of the tax recovered by all the authoritics mentioned in the Article taken together. It was said that cach authority could not Icvy tax up to a limit of Rs. 250/-. It was said that the opening and the concluding portions of Article 276(2) should be construed conjunctively to represent the total amount payable in respect of any person to the authorities enumerated in the Article by way of taxes on professions, tradcs, callings and employments not exceeding Rs, 250/- per annum.
The Punjab Professions, Trades, Callings and Employment Taxation Act, 1956 referred to as the 1956 Act by section 3 imposed liabi- ed
K. P. AGGARWAL v: EXECUTIVE OFFICER (Ray, C.J.) 829 lity on persons who carried on trade or who followed profession or calling or who was in employment to pay tax in respect of such profession, trade, callings or employment at rates specified in the Schedule. Income below Rs, 6000/- was exempted from tax. Income between Rs. 6000/- and Rs. 8500/- was subjected to a tax of Rs. 120/per annum. The maximum sum of Rs, 250/- per annum was levied on income exceeding Rs, 2500/-. The appellants were paying Rs. 250/per annum to the State by way of professional tax, Under section 5 of the Punjab Temporary Taxation Act, 1962 the Schedule to the 1956 Act was altered, Income between Rs. 1800/- to Rs. 3000/- was subjected to a tax of Rs. 28/- per annum. Income exceeding Rs. 11,500/was subjected to a tax of Rs. 250/- per annum. By Punjab Act 6 of 1967 the 1956 Act was repealed. There is now no professional tax So far as the reorganised State of Punjab is concerned. The provisions of the 1956. Act however continued to be applicable to the State of
Haryana and also to the Union Territory of Chandigarh under the relevant provisions of law.
_ The Panchayat Samiti, Ballabgarh issued a notice on 19 September, 1962 that it intended to levy professional tax at the maximum rate of Rs. 200/- per annum according to the Schedule specified under the 1961 Act. It may be stated here that the District Boards in the State of Punjab had imposed a tax on professions, trades, callings and employment. The District. Boards were abolished in consequence of the 1961 Act. There was however a saving provision in the 1961 Act. Section 64 of the 1961 Act provided that a Panchayat Samiti shall be.deemed to have imposed tax at the rate at which immediately © before the commencement of the Act it was lawfully levied by the ’ District Board of the District in which the Panchayat Samiti is situate until 2 provision to the contrary is made by the Panchayat Samiti with the previous sanction of the Government. The rates which were adopted by the Panchayat Samiti were different rates on different slabs of income. Income exceeding Rs. 10,000/- was subjected to a tax of
Rs, 200/- per annum. It is this levy of additional professional tax against which the appellants complaint. .
The contention of the appellants that the imposition of tax by the Panchayat Samiti amounts to double taxation. and is, therefore, illegal is unsound, A tax on profession is not necessarily connected with income. This is clear from the tax on professions imposed by several municipal authorities at certain rates mentioned in the relevant statutes. A tax on income can: be imposed if there is income. A tax on profession can be imposed if a person carries on a profession. Such a tax on profession is irrespective of the question of income.
Article 276(2) as well as the proviso has the combined effect which precludes a challenge on the ue that the tax on profession is a tax on income or that it ¢xceeds Rs. 250/- per annum. The proviso saves existing taxes. ‘The provise- states that notwithstanding that a profession tax exceeds Rs. 250/- per annum it can continue to be levied until provision to the contrary is made by Parliament by law.
The provisions in Article 276(2) were contended by counsel for the appellants to indicate that the total of taxes imposed on professions,
830 SUPREME COURT REPORTS (1974] 2 s.c.R.
trades, callings and employments the State, Municipality or an other authority should not exceed Re 250/- per sme rhe was said that the words “total amount by way of taxes” shall not exceed Rs. 250/-. That is totally misreading the Article. It cannot be denied that the State Legislature has power to impose taxes. The words in Artical 276 that the total amount payable to the State or to any one Municipality, District Board, local board or other local authority cannot mean that the word ‘or’ is used in a conjunctive sense as a substitute for the word ‘and’. The word ‘or’ is used in a disjunctive sense. The proviso to Article 276(2) not only supports that construction but also makes the provision clear. In the proviso to Article 276(2) it is mentioned that if before the commencement of the Constitution any State or any municipal board or authority had imposed a tax exceeding the limit of Rs. 250/- such tax may continue. Therefore, when the proviso speaks of any State or any such municipality it indicates that -both can tax separately to the limit imposed by the Article.
Again, the language of Article 276(2) shows that the Constitution uses the words “any one person” in juxtaposition with any one municipality, district board, local board or other authority, The provisions are clear in their effect that the word “or” occurring between the words “the State” and the words “to any one municipality” cannot be read as the word “and” in a conjunctive sense. ,
The words “the total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other authority” mean that tax of and up to the sum of Rs. 250/- can be imposed by any one of the authorities mentioned. If the Consti-tution wanted the total taxes to be imposed by the State and other authorities to be Rs. 250/- the Constitution would have said that the total amount payable in respect of any one person by way of tax on professions, trades, callings and other employments shall not exceed Rs, 250/- per annum whether imposed by the State, municipality, district board, local board or other local authority. Further, if the total of the taxes be a sum of Rs. 250/- as contended for by counsel for the appellants it will mean that if a person is paying professional tax of Rs, 150/- to the State, the local authority can impose on hi a similar tax up to the balance sum of Rs. 100/- That may lead to two consequences. One is that one of the authorities will have to tax persons with lower income while those with higer income will escape any payment of tax. The other is that if one authority will impose a tax of the balance sum left after considering the amount imposed by the State all the authorities may not impose taxes. That will be entircly a wrong construction. The High Court was right in reaching the conclusion that the State as well as the authorities mentioned in Article 276 of the Constitution can each impose tax up to a limit of Rs, 250/-. One arid the same person may be engaged in more than one of the items suggested in Article 276, namely, professions, trades, callings and employments. Such imposition of tax on more than one item in fespect of one and the same person cannot be anything but taxes. The word: “total” relates to an authority levying various taxes and not to all authorities put together.
K, P. AGGARWAL v, EXECUTIVE OFFICER (Ray, CJ.) 831
A For these reasons the judgment of the High Court is upheld. The appeals are, therefore, dismissed. The parties will pay and bear their own costs as they did in the High Court.
Appeals dismissed.
V.P.S.
13—748SC1/74