Kamta Prasad Aggarwal Etc. v. Executive Officer, Ballabgarh & Anr.

· 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 cif th~ us Gram Panchnyat Snmitis and Zila Parishads Act, 1961 referred to .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 Harynna. ·

The Full Bench of the High Court upheld the contention of the respondents that the recoveries can be made by each one of the autho-rities mentioned in Article 276 of the Constitution to u 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 taxes on pro-fessions, trades and employmedts. The State legislature may also by Jaw 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 authorities mentioned in the Article taken together. It was said that each authority could not levy tax up to a limit of .Rs. 250/-. It was said th;lt the opening and the concluding portions of Artich: 276(2) should be construed conjunctively to repr.esent the total amount payable in respect of any person to the authorities enumerated in the Article by way of taxes on professions, trades, callings and employ-ments not exceeding Rs. 250;: per annum.

The Punjab Professions, Trades, Callings and Employment Taxa- ~ion Act, 1956 referred to as the 1956 Act by section 3 imposed liabi-Jity on persons who carried on trade or who foUowed profession or eating or. Wh!> 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 I-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/- toRs. 3000/- was sub. jected 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 Wa$ 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 rele-vant provisions of law .

. The Panchayat Samiti, Ballabgarh issued a notice on 19 Septemb~r, J 962 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 Boar<is in the State of Punjab had imposed a tax on professions, trades, callings and emllloyment. . 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 Distrjct in which the Panchayat Samiti is situate until a provision to the contrary is made by the Panchayat Samiti with the previous sanction of the Government. The rates which were adopt-ed 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/w per annum. It is this 1evy 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 w~th income. This is clear from the tax on professions imposed by several ntunicipal authorities at certain rates mentioned in the relevant statutes. A tax on income can·be imposed if th~rc is income. A tax on pro-fession can be imposed if a person carries on a profession. Such a G 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 HJ'OUDd that the tax on profession is a ~x on incomo or that it ·~xceeds Rs. 250/~ per annum. The proVISO saves existing taxes. 'ale proviS&· states that .notwithstatJ:ding that a profession tax exceeds Rs. 250/· per annum tt can. continue to be levied until provision to the contrary is made by Parliament by Iaw. H The ptovisions in Article 276t2) were co~tended by counsel. for

the appellants to indicate that the total of taxes 1mposed on professzons,

830 SUPREME COUll T REPORTS [1974] 2 s.c.R. tradel, callings and employments by the State, Municipality or any other authority should not exceed Rs. 250/- per annum. It was said that Ute words "total ainount by way of taxes'' shall not exceed ~s. 250/-. That is t~tally misreading the Article. It cannot be de· med 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 sub~ stitute fo~ the word. 'and'. The word 'or' is used in a disjunctive sense. The prov1so to Arucle 276(2) not only supports that construction but also makes the provision clear. In the proviso to Article 276(2) h is mentioned that if before the ·commencement of the Constitutiop. any State or any municipal board or authority had imposed a tax .exceeding the limit of Rll. 250/~ such tax may continue. Therefore, when the c· 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 Constitu~ tion · uses the words "any one person" in juxtaposition with any one municipality, district board, local board or other authority. The pro-visions 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 amoun·t 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 S~te, the local authority can impose on hi11l 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 antount imposed by the State all the au•horities may not impose t9.xes. That will be entire-. Jy 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 iri 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 res-pect of one and the same person cannot be anything ibut taxes. The word· "total" relates to an authority levying various taxes and not to all authorities put together.

For the1e reasons the judpent .of the Hip Court is upheld. Thl appeal• are, therefore, dilmialed. The parties will pay and bear their own costs as they did in the High Court. · Appeals dismissed.