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PETITIONER: KAMTA PRASAD AGGARWAL ETC.

       Vs.

RESPONDENT: EXECUTIVE OFFICER, BALLABGARH & ANR.

DATE OF JUDGMENT20/12/1973

BENCH: RAY, A.N. (CJ) BENCH: RAY, A.N. (CJ) KHANNA, HANS RAJ MATHEW, KUTTYIL KURIEN ALAGIRISWAMI, A. BHAGWATI, P.N.

CITATION:  1974 AIR  685            1974 SCR  (2) 827  1974 SCC  (4) 440  CITATOR INFO :  R          1984 SC 884  (46)

ACT: Constitution  of  India, 1950,  Art.  276--Scope  of-whether State  and each of the authorities mentioned in Article  can impose tax up to a limit of Rs. 250.

HEADNOTE: Under   the   Punjab  Professions,  Trades,   Callings   and Employment  Taxation  Act,  1956, a professional  tax  on  a graded scale, subject to a maximum of Rs. 250 per annum, had been  and was being collected by the State of Haryana.   The Panchayat  Samiti.  Ballabgarh, in Haryana. issued a  notice that  it  intended to levy professional tax at  the  maximum rate  of  Rs.  200  per annum  according  to  the  Scheduled specified   under  the  Gram  Panchayat  Samitis  and   Zila Parishads  Act. 1961.  The appellants, in writ petitions  in the  High  Court,  contended  that  the  imposition  was  in violation  of  Article 276 of the Constitution in  that  the maximum limit of Rs. 250/- mentioned in the Article  applies to the totality of the tax recovered by all the  authorities mentioned  in  the Article taken together.  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 as the authorities mentioned in  the Article  can each impose tax up to a limit of Rs. 250.  [830 G-H] (1)The power of the State to levy the tax is derived  from Entry 60 of List II of the VII Schedule to the  Constitution dealing  with  taxes on professions,  trades,  callings  and employments.  The State Legislature is therefore,  competent to  legislate  and  levy taxes on  professions.  trades  and employments 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 atax  on profession is  irrespective of the question of income. [829 G] (3)  The words in the Article that the total amount  payable

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to  the  State or to any one Municipality,  District  Board. Local  Board  or local authority cannot mean that  the  word ’or’ is used in a conjunctive sense as a substitute for  the word  ’and’.   This  is clear from the  proviso  to  Article 276(2) which provides that if before the commencement of the Constitution  any State or any, authority had imposed a  tax earning the limit of Rs. 250 such tax may continue; and this indicates that both can tax separately to the limit  imposed by the Article. [830 B] (4)The  words ’any one person’ in the Article are used  in juxtaposition  with any one municipality etc.  One  and  the same  person  may be engaged in more than one of  the  items suggested in Art. 276 and there may be imposition of tax  on more  than  one  item.   The  word  ’total’  relates  to  am authority  levying various taxes and not to all  authorities put together. [830 D] (5)If  the total of the taxes should not exceed Rs.  250/- as contended by the appellant it will mean that if a  person is paying professional tax of Rs. 150 to the State the local authority  can  impose on him a similar tax  only  upto  the balance  of  Rs.  100.  This would  lead  to  the  anomalous consequences, namely (a) one of the authorities will have to tax  persons  with  lower incomes while  those  with  higher incomes will escape; and (b) if one authority will impose  a tax of the balance sum left after deducting the tax  imposed by  the State, all the other authorities may not impose  the taxes, [830 F] 828

JUDGMENT: CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 2427-2428/68 From the Judgment and Order dated the 25th August, 1967  and 17th  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.  Qummaruddin  and  Vinod Dliawan. 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 tile State of Haryana. The  Full Bench of the High Court upheld the  contention  of the respondents that the recoveries can be made by each  one of   the  authorities  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 II 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  professions, trades and employments.   The  State legislature may also by law confer a similar authority on  a

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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  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, trades, 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- 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  at 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 a 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  pro- fession can be imposed if a person carries on a  profession.

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Such a tax on profession is irrespective of the question  of income. Article  276(2)  as  well is the proviso  has  the  combined effect  which precludes a challenge on the ground  that  the tax on profession is a tax on income or that it exceeds  Rs. 250/-  per  annum.  The proviso saves existing  taxes.   The proviso  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 trades, callings and employments by the State,  Municipality or  any  other  authority should not exceed  Rs.  250/-  per annum.  it 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 Article 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 land’.   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 Constitution 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 him  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 higher 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 entirely a wrong construction.     High  Court was right  in reaching the conclusion that the State as well    as     the authorities mentioned in Article 276 of the Constitution can

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each  impose  tax  up to a limit of Rs. 250/-. One  and  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 respect 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.                             831 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 748SCI/74 832