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CASE NO.: Appeal (civil)  1994 of 2002

PETITIONER: Karnataka Bank Ltd.

RESPONDENT: State of A.P. & Ors.

DATE OF JUDGMENT: 21/01/2008

BENCH: S.H. Kapadia & B. Sudershan Reddy

JUDGMENT: J U D G M E N T WITH CIVIL APPEAL NO. 1995 OF 2002

M/s. Ch. Yegnaiah &  Sons.                      \005Appellant Versus The Profession Tax Officer & Anr.               \005Respondents

WITH  

CIVIL APPEAL NO. 2400 OF 2002

M/S. Shaw Wallace & Company Ltd.                \005Appellant Versus The Deputy Commercial Tax  Officer & Anr.                                  \005Respondents

B.Sudershan Reddy, J.  

1.      This batch of appeals arises out of a common order  passed by the Andhra Pradesh High Court whereby and  whereunder the Writ Petitions filed by the appellants  challenging the constitutional validity of the explanation  to the definition of the term \023person\024 defined in clause  (j) of Section 2 of the Andhra Pradesh Tax on Professions,  Trades, Callings and Employments Act, 1987 (Act No.22 of  1987),for short \021the Act\022, as well as Explanation No.I to  the First Schedule of the said Act as amended by Act No.29  of 1996 have been dismissed.  In order to consider as to  whether the said provisions of the Act suffer from any vice  of unconstitutionality we shall briefly refer to the facts.

BRIEF FACTS:

2.        The appellant in C.A.No.2400/02 is M/s. Shaw Wallace  and Company Limited, a Company registered under the  Companies Act, 1956. It has its principal place of business  at Secunderabad in A.P. State. In addition to its principal  place of business at Secunderabad the appellant has  branches and stock points where it transacts its business  and stores its goods. At the material time, the appellant  had about 74 stock points, every stock point has been duly  recorded with the registering authority under the A.P.  General Sales Tax Act.  It is aggrieved  by the notice  issued by the first respondent  requiring the appellant to  pay profession tax at Rs.2500/-  for each of its branches  in A.P. for the years 1996-97 and 1997-98.  The respondent  altogether demanded a sum of Rs.3,42,000/- at the rate of  Rs.2500/- per annum for each of  the branches of the

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appellant Company. The first respondent obviously relied on  the Explanation No. I to the First Schedule to the Act  defining the expression \023person\024 which we shall notice  little later.  It is under those circumstances the  appellant invoked the jurisdiction of the High Court under  Article 226 of the Constitution of India and prayed for  grant of appropriate reliefs.

3.      The appellant in C.A.No.1994/02 is a banking Company  engaged in banking activities having the network of over  300 branches spread throughout India.  The appellant  altogether at the relevant time had branches in 17 places  within the State of Andhra Pradesh.  It had obtained the  certificate of enrolment from the first respondent at  Hyderabad where it has its principal place of business.   The appellant was paying Profession Tax in respect of  principal branch at Hyderabad alone. The first respondent  herein issued similar notices requiring the appellant to  pay Profession Tax of Rs.2500/- to be paid by each of its  branches in the State of Andhra Pradesh.

4.      The appellant in C.A.No.1995/02 is a partnership firm  engaged in the business of sale of petroleum products. It  has its principal place of business at Secunderabad in the  State of Andhra Pradesh.  In addition to its principal  business premises, it has other petroleum outlets outside  Hyderabad and Secunderabad.  The first respondent issued  similar notices demanding Profession Tax by treating the  various branches of the appellant firm as a different  person at the rate of Rs.2500/- per annum.   Each of the  appellant\022s branch has been treated as a separate person  for the purposes of levy and realization of tax under the  provisions of the Act.   

5.      The Writ Petitions filed by each of the appellant  challenging the constitutional validity of the provisions  of the said Act referred to hereinabove came up before a  Division Bench of the A.P. High Court which has upheld the   validity of the provisions.   

RELEVANT CONSTITUTIONAL PROVISIONS AND SCHEME OF THE ACT

6.      Clause (1) of Article 276 of the Constitution enables  a State Legislature to enact a Legislation imposing tax on  professions, trades, callings and employments and further  provides that such law made by a State Legislature shall  not be declared invalid on the ground it relates to tax on  income. Clause (2) of Article 276 as it stood prior to the  Constitution (Sixtieth Amendment) Act, 1988 commands that  the total amount payable in respect of any one person to  the State or to any local authority in the State by way of  taxes on professions, trades, callings and employments  shall not exceed Rs.250/- per annum.   The Constitution  (Sixtieth Amendment) Act, 1988 enhanced the tax limit  prescribed under clause (2) of Article 276 and increased it  to Rs.2500/-.  The relevant Entry empowering the State  Legislature to enact the law imposing taxes on professions,  trades etc. is founded on Entry 60 of List II to the  Seventh Schedule. The purpose of Article 276 is not to  amend that power of State Legislature but to merely to  provide that such tax is not invalid on the ground that it  relates to a tax on income.

7.      Before we proceed to consider the validity of the  impugned provisions of the said Act, it would be

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appropriate to notice the broad scheme and relevant  provisions thereof.  

SCHEME OF THE ACT: 8.      The Andhra Pradesh Tax on Professions, Trades,  Callings and Employments Act, 1987 is an Act to provide for  the levy and collection of tax on professions, trades,  callings and employments. Prior to the enactment of the  said Act profession tax was being levied in the State as  per the provisions of the Hyderabad Municipal Corporation  (Act No. II of 1956), the Andhra Pradesh Municipalities  Act, 1965 ( Act No. 6 of 1965) and the Andhra Pradesh Gram  Panchayats Act, 1964 ( Act No. 2 of 1964).  Those Acts were  being administered by the Local Authorities.  The State  with a view to rationalize the levy and collections of  profession tax and also with a view to improve the  collections of the profession tax enacted a single  comprehensive legislation for the levy and collection of  profession tax. Be it noted, the local authorities, after  the commencement of Act, are prevented from levying any tax  on professions, trades, callings and employments.  The  object of the Act is to levy tax on professions, trades  etc. Tax is levied on the person engaged in any profession,  trade, calling etc.  

9.      Section 2 of the Act contains the definitions.  Clause  (j) defines  \023person\024. It reads as under :   \023(j) \023person\024 means any person who is  engaged in any profession, trade,  calling of employment in the State of  Andhra Pradesh and includes a Hindu  Undivided Family, Firm, Company,  Corporation or other corporate body,  any society, club or association, so  engaged but does not include any person  who earns wages on a casual basis.  

Explanation: Every branch of a firm,  Company, Corporation or other corporate  body, any Society, Club or Association  shall be deemed to be a person.\024

10.             Clause (l) of Section 2 defines \021Profession Tax\022  as a tax leviable under the Act. Section 2(b) defines  \021asssessee\022 as a person or employer by whom tax is payable  under the Act.    

11.             Section 4 of the Act is the charging Section  providing for levy and collection of tax on professions,  trades, callings and employments for the benefit of State.  Section 5 imposes liability on the employer to deduct and  pay tax on behalf of its employees. Section 6 provides that  every employer other than a State or Central Government   who is liable to pay tax on behalf of his employee should  register and obtain a certificate of registration within 30  days of his becoming liable to pay tax from the assessing  authority.  

12.             Explanation No. I to the First Schedule of the  Act reads: \023Notwithstanding anything in the  schedule, every branch of any self- employed assessee enumerated in items 2  to 21 of the schedule shall be deemed

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to be a separate assessee for the  purpose of levy of profession tax  specified in the schedule.\024  

       It is not necessary for the purposes of disposal of  this batch of appeals to notice the other provisions of the  Act.

SUBMISSIONS:     

13.             Shri D.A. Dave, learned senior counsel submitted  that the competency of the State Legislature to make a law  relating to taxes for the benefit of the State or other  local authorities therein in respect of professions,  trades, callings or employments is structured by Article  276 of the Constitution and any such law made by the State  Legislature is to be within the four corners of that  Article.  The submission was that the total amount payable  in respect of any one person to the State by way of taxes  on professions etc. shall not exceed Rs.2500/- per annum.  The state Legislature is not competent to treat every  branch of a Company or firm  or club etc. as a separate  person for the purposes of levy and collection of  Profession Tax.  The branches of a Company have no  independent and separate existence.   It was submitted that  though there is no definition of \023person\024 in the  Constitution, the meaning of the expression \023person\024 is to  be ascertained from the provisions of the General Clauses  Act inasmuch as Article 367 of the Constitution provides  the  General Clauses Act, 1897 to be made applicable for  the interpretation of the Constitution. Section 3(42) of  the General Clauses Act defines \023person\024 as a Company or  Association or body of individuals whether incorporated or  not. Relying on the said definition it was contended that  branches of Company, Association or body of individuals  cannot be treated as a separate person.  Shri AV Rangam  adopted the submissions made by the learned senior counsel.  

14.             Shri Anoop G. Chaudhary, learned senior counsel   appearing on behalf of the State of A.P. contended that the  impugned provisions of the Act do not suffer from any  constitutional infirmity.  The Legislature is competent to  define person and such artificial definitions are not  unknown to law.   It was submitted that no doubt Article  367 provides  that the General Clauses Act, 1897 applies  for the interpretation of the provisions of the  Constitution as it applies for the interpretation of an Act  of the Legislature  of the Dominion of India. But the  General Clauses Act itself is a statute for interpretation  of other enactments, unless there is anything repugnant in  the subject or context. The very definition of \023person\024  provided in Section 3(42) is an inclusive one and it no way  impairs the competence of the State Legislature to make law  relating to taxes for the benefit of the State in respect  of professions etc. and define \023person\024 for the purposes of  such law.   

15.             Shri Sanjay Hegde, learned counsel for the  Intervener broadly adopted the submissions made by the  learned senior counsel for the State of Andhra Pradesh.  

THE CORE ISSUE:

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16              The core question that arises for our  consideration in this batch of appeals is that whether the  Explanation to the definition of the term \023person\024 defined  under Section 2(j) of the Act and Explanation No.I to the  First Schedule of the Act is violative of the Article 267  (2) of the Constitution.  

17.             The rules that guide the constitutional courts in  discharging their solemn duty to declare laws passed by a  legislature unconstitutional are well known. There is  always a presumption in favour of constitutionality, and a  law will not be declared unconstitutional unless the case  is so clear as to be free from doubt; \023to doubt the  constitutionality of a law is to resolve it in favour of  its validity.\024 Where the validity of a statute is  questioned and there are two interpretations, one of which  would make the law valid and the other void, the former  must be preferred and the validity of law upheld. In  pronouncing on the constitutional validity of a statute,  the Court is not concerned with the wisdom or un-wisdom,  the justice or injustice of the law.  If that which is  passed into law is within the scope of the power conferred  on a Legislature and violates no restrictions on that  power, the law must be upheld whatever a Court may think of  it. [ See \026 Fram N. Balsara Vs. Bombay ].  

18.             In State of W.B. and another vs. E.I.T.A. India  Ltd. and others  ,this court summarized the well settled  principles to determine the constitutional validity of the  provisions of any statute and held :

\023 4.  In examining the constitutional  validity of the impugned provisions of  a statute, it will be useful to bear in  mind the following well-settled  propositions.  If a legislation is  found to lack in legislative competence  or is found to be in contravention of  any provision  of Part III or any other  provision of the Constitution, the  impugned legislation cannot escape the  vice of unconstitutionality (see :  Kesavananda Bharati v. State of Kerala   [ (1973) 4 SCC 225: AIR 1973 SC 1461 ]  and also State of A.P. v. McDowell &  Co. [(1996) 3 SCC 709 ].  A challenge  to any statutory provision on the  ground  of the classification  being  discriminatory and violative of Article  14 of the Constitution , can be  successfully met on the principle of  reasonable classification having nexus  to the object of the Act sought to be  achieved (see: State of Bombay v. F.N.  Balsara [ AIR 1951 SC 318:1951 SCR  682:(1951)52 Cri LJ 1361 ] and Budhan  Choudhry v. State of Bihar [ AIR 1955  SC 191: (1951) 1 SCR 1045 : 1955 Cri LJ  374].  However, the legislature enjoys  a greater latitude for classification  in the field of taxation (see:  Steelworth Ltd. v. State of Assam [1962  Supp (2) SCR 589 : (1962) 13 STC 233,  Gopal Narain v. State of U.P. [AIR 1964  SC 370] and Ganga Sugar Corpn. Ltd. v.

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State of U.P. [(1980)1 SCC 223:1980 SCC  (Tax) 90:AIR 1980 SC 286].  No  legislation can be declared to be  illegal, much less unconstitutional on  the ground of being unreasonable or  harsh on the anvil of Article 14 of the  Constitution, except, of course, when  it fails to clear the test of  arbitrariness and discrimination which  would render it violative of Article 14  of the Constitution.(See:Steelworth  Ltd.  and McDowell & Co.)           

THE LAW MAKING POWER OF LEGISLATURE AND CONSTITUTIONAL  LIMITATIONS: 19.             We shall bear in mind the well settled principles  and proceed to analyze Article 276 of the Constitution of  India and impugned provisions of the Act.

20.             Article 265 of the Constitution prohibits levy of  collection of a tax except by an authority of law, which  means only a valid law.  The implied limitation is that the  law providing for levy of tax should be one which is a  valid law.

21.             The Privy Council, in R. Vs. Burah   laid down a  fundamental principle for the interpretation of a written  Constitution.  Lord Selborne in a classic passage observed: \023The Indian Legislature has powers  expressly limited by the Act of the  Imperial Parliament which created it, and  it can, of course, do nothing beyond the  limits which circumscribe these powers.   But, when acting within those limits, it  is not in any sense an agent or delegate  of the Imperial Parliament, but has, and  was intended to have, plenary powers of  legislation, as large and of the same  nature, as those of Parliament itself. The  established of courts of Justice, when a  question arises whether the prescribed  limits have been exceeded, must of  necessity determine that question; and the  only way in which they can properly do so,  is by looking to the terms of the  instrument by which, affirmatively, the  legislative powers were created, and by  which, negatively, they are restricted. If  what has been done is legislation, within  the general scope of the affirmative words  which give the power, and if it violates  no express condition or restriction by  which that power is limited (in which  category would, of course, be included any  Act of the Imperial Parliament at variance  with it) it is not for any Court of  Justice to inquire further, or to enlarge  constructively those conditions and  restrictions.\024         In Kesavananda  Vs.  Kerala   this Court reaffirmed the  correctness of the principle laid down in Burah (supra) 22.             In Bharat Kala Bhandar Ltd. vs. Municipal  Committee, Dhamangaon   ,this court held that the provisions  of Article 276 of the Constitution which precludes State

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Legislature from making a law enabling a local authority to  impose a tax on profession etc. in excess of Rs.2500/- per  annum and the said  provision is to be read in the Act or   \023to be deemed by implication to be there as the  Constitution is a paramount law to which all other laws are  subject.\024  It is further held \023moreover, we must bear in  mind the provision of Article 265 of the Constitution which  preclude the levy or collection of a tax except by  authority of law which means only a valid law.\024

23.             In The Bengal Immunity Company Limited vs. The  State of Bihar and others  ,this court while recognizing  that the Constitution makers by Article 246(3) read with  Entry 54 in List II of the Seventh Schedule to the  Constitution conferred power on the Legislatures to make  law with respect to taxes on the sale or purchase of goods  other than newspapers held that the Constitution at the  same time by Article 286 \023clamped on the legislative power  several fetters\024.  Likewise Article 276 imposes fetters on  the law making power of a State Legislature  in the matter  of making a law relating to taxes on professions, trades,  callings and employments.  Those restrictions are found in  Article 276 (2) which commands that the total amount  payable in respect of any one person to the State or to any  one Municipality etc. or other local authority in the State  by way of taxes on professions etc. shall not exceed Rs.  2500/- per annum.  

24.             In Atiabari Tea Co. Ltd.  vs. The State of Assam  and others  , this court while considering the width and  amplitude of Article 301 observed : \023 On the other hand, the opening words  of Art. 301 are very significant. The  doctrine of the freedom of trade,  commerce and intercourse enunciated by  Art. 301 is not subject to the other  provisions of the Constitution but is  made subject only to the other  provisions of Part XIII; that means  that once the width and amplitude of  the freedom enshrined in Art. 301 are  determined they cannot be controlled by  any provision outside Part XIII.  This  position incidentally brings out in  bold relief the important part which  the Constitution-makers wanted the  doctrine of freedom of trade to play in  the future of the country.  It is  obvious that whatever may be the  content of the said freedom  it is not  intended to be an absolute freedom;  absolute  freedom in   matters of  trade, commerce and intercourse would  lead to economic confusion, if not  chaos and anarchy; and so the freedom  guaranteed by Art. 301 is made subject  to the exceptions provided by the other  Articles in Part XIII.  The freedom  guaranteed is limited in the manner  specified by the said Articles but it  is not limited by any other provisions  of the Constitution outside Part XIII.   That is why it seems to us that Art.  301, read in its proper context  and  subject to the limitations prescribed

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by the other relevant Articles in Part  XIII, must be regarded as imposing a  constitutional limitation on the  legislative power of Parliament and the  Legislatures of the States.\024         (Emphasis supplied)

25.             It is unnecessary to burden this judgment with  various authoritative pronouncements of this court wherein   constitutional limitations on the legislative power of  Parliament and the Legislatures of the States  have been  recognized. The State Legislature undoubtedly is competent  to make a law relating to taxes for the benefit of the  State or other local authorities therein in respect of  professions, trades, callings or employments. It is  traceable to Entry 60 of List II of the Seventh Schedule  but that power of the Legislature to make such a law to  levy and collect the profession tax is made subject to the  restrictions as provided for under Article 276 (2) of the   Constitution.   

26.             Article 276 of the Constitution of India  corresponds to Section 142A of the Government of India Act,  1935. The legislative history upon which Section 142A of  the Government of India Act, 1935 was enacted and on which  Article 276 of the Constitution now rests was noticed by  this court in Bharat Kala Kendra (Supra).  It is observed :      \024. . . . . It is that the legislative  spheres of the Provinces and the Centre  came to be clearly demarcated in regard  to items falling within Lists I and II  of Schedule VII of the Govt. of India  Act and now to those falling within the  same lists of Schedule VII of the  Constitution.  Taxes on professions,  trades, callings and employments are  taxes on income and are  thus outside  the provincial/ and now State \026 lists  and belong exclusively to Parliament  and before that to the Central  Legislature.  Yet under a large number  of laws enacted before the Govt. of  India Act, 1935 came into force, power  was conferred on local Governments and  local authorities to impose taxes on  such activities.  This was obviously in  conflict with S.100 of the Govt. of  India Act.  When this was realized  S.142-A was enacted by the British  Parliament which saved the power  conferred by pre-existing laws but  limited the amount payable to Rs.50  after 31st March, 1939.  A saving was  made, however, of pre-existing laws  subject to certain conditions with  which we are not concerned.  The  provisions of this section have been  substantially reproduced in Article 276  of the Constitution with the  modification that the upper limit of  such tax payable per annum would be  Rs.250 instead of Rs.50.  A tax can be  recovered only if it is \021payable\022 and

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it would be payable only after it is  assessed.       

27.             The purpose of Article 276 is not to amend the  State\022s power to tax profession founded on Entry 60   but  is to provide that such tax is not invalid on the ground  that it relates to a tax on income.  

28.             A plain reading of Article 276 makes it  abundantly clear that a State Legislature is precluded from  making laws enabling the authorities to impose tax on  professions, trades, callings etc. in excess of the  prescribed amount, such law if enacted by a Legislature  would be in the teeth of Article 276 of the Constitution.   The total amount payable in respect of any one person to  the State or to any one municipality or other local  authority etc. in the State by way of tax on profession  etc. shall not exceed Rs.2500/- per annum.  Entry 60 of  List II which authorizes the State Legislature to make a  law relating to  tax on profession is to be read along with  Article 276 of the Constitution.  Article 276 is also  declaratory  in its nature inasmuch as it declares that  notwithstanding anything contained in Article 246, no law  of the Legislature of a State relating to taxes for the  benefit of State etc. in respect of profession, trades etc.  Shall be invalid on the ground that it relates to tax on  income.    Likewise, it also declares the power of the  Legislature of a State to make such laws  with respect to  taxes on professions etc. shall not be construed as   limiting  in any  way  the Parliament\022s power to make laws  with respect to taxes on income accruing from or arising  out of profession, trade etc.  For the purposes of this  case, it is not necessary to notice the distinction between  tax and profession and income. It is well settled that a  tax on profession is not necessarily connected with income.     A tax on income can be imposed if a person carries on a  profession, trade, calling etc.  Such a tax on profession  is irrespective of the question of income. There is no  other restriction imposed upon a State Legislature in  making law relating to tax on profession, trade, calling  and employment.  There can be no doubt whatsoever that a  State Legislature cannot make any law to levy and collect  profession tax at the rate of more than Rs.2500/-per  person, per annum, in view of the restriction in Article  276(2) of the Constitution.    

29.             We have noticed that Section 4 of the Act which  deals with levy and charge of tax mandates that there shall  be levied and collected a tax on professions, trades,  callings and employments  etc. for the benefit of the State  and every person engaged in any profession, trade, calling  etc. in the State falling under any one or other of the  classes specified in Column (2) of the first Schedule shall  be liable to pay tax at the rate specified in the  corresponding Entry in Column (3) thereof.  The maximum  rate specified in the First Schedule at which profession  etc. is levied  and liable to be paid by every person  admittedly does not exceed Rs 2500/- per annum. Article  276(2) does not prohibit such levy and collection of tax  from every one person not exceeding Rs. 2500/- per annum.

30.             In  East India Tobacco Co. vs. State of Andhra  Pradesh , this court approved Willis : Constitutional law to  the effect: \023A State does not have to tax every thing in  order to tax something. It is allowed to pick and choose

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districts, objects, persons, methods and even rates for  taxation if it does so reasonably.\024                                                                 (Emphasis supplied)

31.             It is well settled that the power to make a law  with respect to a tax comprehends within its power to levy  that tax and to determine the persons who are liable to pay  such tax, the rate at which such tax is to be paid and the  event which will attract liability in respect of such tax.   This  was generally by the charging Sections of the  particular tax law.

WHETHER THE STATE LEGISLATURE HAS EXCEEDED ITS POWER IN  DEFINING THE \023PERSON\024 AND THEREBY TRANSGRESSED THE  CONSTITUTIONAL LIMITATIONS:

32.             The question which we therefore have to consider  is whether in the exercise of its power to make a law  relating to taxes on professions, trades, callings and  employments within the State, the Legislature of that State  has the legislative competence to define \023person\024 engaged  in any profession, trade etc.?   The question requiring our  decision is whether the A.P. State Legislature is competent  to introduce the fiction in the Explanation to the  definition to the word \023person\024 and also Explanation No.I   to the First Schedule of the Act?  Whether introducing such  fiction, Legislature has exceeded its legislative power  thereby transgressed the constitutional limitation?   

33.             We do not find any merit in the contention that  the Legislature lacks legislative competence to define   \023person\024 who is liable to pay profession tax etc. which  includes every branch of a firm, Company, Corporation or  other corporate body, any Society, Club or Association. The  term \023person\024 is not defined in the Constitution.  But  Article 367 of our Constitution provides that the  definitions contained in  the General Clauses Act apply for  the interpretation of the Constitution.  Therefore, we are  required to consider whether the definition of  \023person\024 in  Section 3 (42) of the General Clauses Act restrict the  power of State Legislature to define the term \023person\024 and  adopt a meaning different from the definition in the  General Clauses Act.  In our considered opinion, the  definition of  \023person\024 in General Clauses Act, would not  restrict the power of the State Legislature to define a  \023person\024 and adopt a meaning different from or in excess of  the ordinary acceptation of the word as is defined in the  General Clauses Act.            34.             In N. Subramania Iyer Versus Official Receiver  Quilon & Anr.   this Court while considering the question  whether it was necessary in annulment proceedings under  Section 53 of the Provincial Insolvency Act to prove that  the transferor who has been subsequently adjudged an  insolvent  should have been honest and straightforward in  the matter of transaction impeached held  that even if the  transferor was wanting in bona fides the crucial question  still remains to be answered and unless it is found that  the transferee was wanting in bona fides in respect of the  transaction in question, he cannot be affected by the  dishonest course of conduct of the transferor. The High  Court in that case had taken the view that the mortgagee  had failed affirmatively to prove its bona fides and the  said conclusion was based upon the consideration that the  General Clauses Act defined \023good faith\024 as \023nothing is

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said to be done or believed in good faith which is done or  believed without due care and attention.\024  It is in that  context this Court while analyzing the scope of provisions  of the General Clauses Act observed that the General  Clauses Act is enacted in order to shorten language used in  parliamentary legislation and to avoid repetition of the  same words in the course of the same piece of legislation.  \024Such an Act is not meant to give a hide-bound meaning to  terms and phrases generally occurring in legislation.  That  is the reason why definition section contains words like  \021unless there is anything repugnant in the subject or  context.\022 Words and phrases have either a very narrow  significance or a very wide significance according as the  context and subject of the legislation requires the one or  the other meaning to be attached to those words or  phrases.\024  The Court recognized that the legislature is  entitled in its wisdom to give a special definition of the  terms already defined in the General Clauses Act and  different from the one in the General Clauses Act.  It is  observed the definition of \023good faith\024 in the General  Clauses Act would have been applicable  to the Limitation  Act also but the legislature in its wisdom has given a  special definition of \023good faith\024 different from the one  in the General Clauses Act advisedly.\024  

35.     In Hasmukhalal Dahyabhai & Ors.  Versus State of  Gujarat & Ors.  interpretation of Articles 31A  and 31B of  the Constitution of India in relation to the Gujarat  Agricultural Land Ceiling Act, 1961 came up for  consideration.  The Gujarat Agricultural Land Ceiling Act,  1961 conceives of each \023person\024 holding land in the single  unit  whose holding must not exceed the ceiling limit.  Section 2, sub-section (21) says: \023person\024 \023includes a  joint family\024. This has been done apparently to make it  clear that, in addition to individuals, as natural persons,  families, as conceived of by other provisions, can also be  and are persons. It was argued that the concept of the term  \023person\024 having been fixed by the General Clauses Act, this  concept and no other must be used for interpreting the  second proviso to Article 31A of the Constitution of India.  This Court held:   \02310. It is true that, but for the  provisions of Section 6, sub-section (2) of  the Act, the term \023person\024, which includes  individuals, as natural persons, as well as  groups or bodies of individuals, as  artificial persons, such as a family is,  the entitlement to the ceiling area would  be possessed by every person, whether  artificial or natural. In other words, if  Section 6(2) of the Act was not there, each  individual member of a family would have  been entitled to hold land upto the ceiling  limit if it was his or her legally separate  property. This follows from the obvious  meaning of the term \023person\024 as well as the  inclusive definitions given both in the Act  under consideration and in the General  Clauses Act.\024  

36.             The expression \023person\024 is employed in more than  one Article of the Constitution of  India.  We shall not  refer to all those Articles where the expression \023person   has been used. It would be enough to notice Articles 20,  21, 22 and 226 of the Constitution of India where it has

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been used.   The provision of the General Clauses Act, 1897  which is applicable for the interpretation of the  Constitution as provided for under clause (1) of Article  367 itself restricts the applicability of the Act and makes  such an application subject to the context as otherwise may  require.   The trinity of Articles 20, 21, 22  broadly  guarantee the personal liberties  against the State to  individual person. They are not guaranteed to all those who  are included in the definition of \023person\024 under section 3  (42) of the General Clauses Act.  \023Person\024 under Section 3  (42) of the General Clauses Act shall include any company  or association or body of individuals whether incorporated  or not.  Does it mean that the High Court is entitled to  issue a writ or order or direction under Article 226 of the  Constitution against every \023person\024 under Section 3 (42) of  the General Clauses Act?  It is well settled that the  remedy available under Article 226 is a public law remedy  and a writ and does not lie against a person not  discharging public law duties. It is thus clear that the  definition of \023person\024 under Section 3 (42) of the General  Clauses Act is not applicable automatically to interpret  the provisions of the Constitution unless the context so  requires and makes that definition applicable.  37.             Section 3 of the General Clauses Act, 1897 itself  says that unless there is anything repugnant in the subject  or context the term \023person\024 shall include any company or  association or body of individuals, whether incorporated or  not.  The word \023includes\024 is often used in interpretation  clauses in order to enlarge the meaning of the words or  phrases occurring in the body of the \023statute\024.  \023When it  is so used, these words and phrases must be construed as  comprehending not only such things as they signify  according to their nature and import but also those things  which the interpretation clause declares that they shall  include.\024 [ See \026 The Commissioner of Income-tax, Andhra  Pradesh Vs. M/s Taj Mahal Hotel, Secudnerabad   38.             In our considered opinion, the Legislature is not  denuded of its competency to define the term \023person\024  differently from the definition of that term in the General  Clauses Act, 1897. There are many illustrations showing  that the same words have been used in different senses in  different context. It is not uncommon practice for the  Parliament or State Legislature to define \023person\024 in the  Act and create an artificial unit by fiction. For instance,  Section 2 (31) of the Income-Tax Act, 1961 defines \023person\024  including (a) an individual, (b) a Hindu undivided family,  (c) a Company, (d) a firm, (e) an association of persons or  a body of individuals, whether incorporated or not, (f) a  local authority and (g) every artificial juridical person,  not falling within any of the preceding sub-clauses and the  same is much wider than the term \023person\024 as defined in the  General Clauses Act.  39.             The definition of \023person\024 in Section 3 (42) of  the General Clauses Act is undoubtedly illustrative and not  exhaustive.  The well known rule of interpretation  regarding such inclusive definitions has always been to  treat the other entities, who would not otherwise have come  strictly within the definition, to be a part thereof,  because of illustrative enactment of such definitions.  The  legislature is competent in its wisdom to define \023person\024  separately for the purposes of each of the enactment and  different from the one in the General Clauses Act and  create an artificial unit.  The definition of  \023person\024 in  the General Clauses Act would not operate as any fetter or  restriction upon the powers of the State Legislature to

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define  \023person\024 and adopt a meaning different from as  defined in the General Clauses Act.  40.             In our view, Entry 60 in List II gives the  outline of the subject matter of legislation and therefore,  the words in the Entry are to be construed in their widest  amplitude.   The field of legislation covered by the Entry  is not to be narrowed down in any way unless there is  anything in the Entry itself which defines the limits  thereof.  41.             The impugned provisions are merely concerned with  specifying different assessable units for purposes of  assessment of profession tax and imposition of the levy.   It is well settled and cannot be disputed \023that the  Legislature can select persons, properties, transactions  and objections for the imposition of levy and for that  purpose classify as many different assessing units as it  could reasonably think necessary\005\005\005\024 [See - Wealth Tax  Officer Versus  C.K. Mammed Kayi    42.             Shri A.V. Rangam, learned counsel relying on the  decision of this Court in English Electric Company of India  Ltd.  Vs.  The Deputy Commercial Tax Officer   submitted  that the branches of a company have no independent and  separate existence.  The company is one entity but its  branches are not separate entities. The submission was that  the definition of \023person\024 has the effect of destroying the  legal identity of the company.  The definition of \023person\024  creates an artificial entity unknown to law. We find no  substance in the submission so made by the learned counsel  for the appellant.  The observations of this Court in  English Electric Company of India Ltd. (supra) that the  appellant company therein was \023one entity and it carries on  business at different branches. Branches have no  independent and separate entity.  Branches are different  agencies\024 is to be understood in the proper context.  The  appellant company therein had branches at different places.   The buyer at Bombay ascertained quotations for goods from  the Bombay branch.  The Bombay branch referred the enquiry  to its Madras factory and on receiving reply quoted the  prices and the Bombay buyer placed orders for the goods  with the Bombay Branch but the goods were despatched from  Madras though in the name of Bombay Branch at the risk of  the Bombay buyer.  It is under those circumstances this  Court observed that when a branch of a company forwards a  buyer\022s order to the principal factory of the company and  instructs them to despatch the goods direct to the buyer  and the goods are sent to the buyer under those  instructions it would not be a sale between the factory and  its branch. The observations so made have no bearing  whatsoever on the issue with which we are concerned in the  present case.   43.             The appellant-company herein continues to be  company within the meaning of Section 3 of the Companies  Act, 1956 which defines the \023company\024, \023existing company\024,  \023private company\024 and \023public company\024 for the purposes of  the Companies Act. Its status as one entity continues to be  the same. It is only for the purposes of the present Act  viz. Andhra Pradesh Tax on Professions, Trades, Callings  and Employments Act, 1987 even its branches are treated as  a \023person\024 enabling the authorities to levy and collect  profession tax.  44.             Before parting with the case we are required to  state that a challenge to the impugned provisions was  mounted on the basis of Article 14 of the Constitution of  India in the High Court.  It was contended that the Andhra  Pradesh State Legislature in enacting the definition to the

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word \023person\024 and also Explanation No. I to the First  Schedule of the Act acted arbitrarily and irrationally and  thereby violated Article 14 of the Constitution of India.  That contention was rejected by the High Court. The said  contention is not urged before us. Therefore, we express no  opinion on the same.  CONCLUSION: 45.             For the aforesaid reasons, we hold the definition  of the word \023person\024 in the impugned Explanation and also  Explanation No. I to the First Schedule of the Act is not  intended to tax a person at a rate higher  than Rs.2500/-  per annum, per  person, but to treat even a branch of a  firm, company, corporation or other corporate body, any  society, club or association as a separate person, and  therefore,  a separate assessee within the meaning of  Section 2 (b) of the Act and the Andhra Pradesh State  Legislature  has undoubtedly the competency to adopt such a  devise of taxation.  The Andhra Pradesh State Legislature  did not violate the mandate of Article 276(2) of the  Constitution.  45.             In the result, the appeals are dismissed with no  order as to costs.