Civil Appeal Nos
2152 2153 of 1968 From the Judgments and Orders dated the 2521966 of the Punjab and Haryana High Court in Civil Writ Nos 2588 and 2392 1964 VC Mahajan for the appellants in CA 2152
KS Surt and OP Sharma for the the appel lants in CA 1755 EC Agrawala for respondent in CA 1754 Hardev Singh and RS Sodhi for respondent in CA 1755 RK Mathut and V Goswami for respondent in CA 1497 NN Goswamy and A Minocha for respondent in CA 2153
The Judgment of the Court was delivered by BEG CJ
The only question decided by the High Court of Punjab  Haryana in the cases now before us by special leave was whether section 3 of the Punjab Professions Trades Callings and Employments Taxation Act 1956 herein after referred to as the Act  restricts taxation upon persons in Punjab to the income made within the State of Punjab
This section reads as follows  3
Levy of tax Every person who carried on trade either by himself or by an agent or representative or who follows a profession or calling or who is in employ ment either wholly or in part within the State of Punjab shall be liable to pay for each financial year or a part thereof a tax in respect of such profession trade calling or employment Provided that for the purpose of this section a person on leave shall be deemed to be a person in employment
Section 4 of the Act provides for taxation in accordance with a schedule annexed to it
Section 5 lays down the manner of determination of the tax which is to be assessed on the total gross income
The term total gross income is defined by section 2 of the Act as aggregate gross income derived from various professions trades callings and employment
The Legislature amended this provision by adding in 1962 Whether such profession or calling is followed trade is carried on or employment is within or outside the State of Punjab to the definition
The annexed schedule conformably with the provisions of Article 276 of the Constitution does not tax any person under the scale laid down in the schedule to an extent more than Rs 250 per annum
Nevertheless it is clear by reading the provi sions of section 5 and section 2 together that the determination in accordance with the scale laid down in this schedule of the aggregate gross income on which tax is assessed will have to take into account the income of the individual concerned earned both inside and outside Punjab
The result is that the only condition for making a person taxable under the Act is that he must also have some profession trade calling 410 or occupation which is to be taxed which he carries on within the State of Punjab
It does not matter whether that person is employed or carries on the same or some other profession trade or calling outside Punjab also
Section 3 is only meant to indicate that the person who is to be made liable has carried on some profession calling trade or occupation within Punjab
It does nothing more
It has nothing to do with the calculation of the aggregate amount of the tax to be levied
That is dealt with by section 5 read with section 2 b of the Act as amended
And in determining the amount of tax which an assessee has to pay or the grade in which he falls the amount he makes outside must also be added to what he makes inside Punjab
His total gross income determines only his grade or amount of tax he has to pay
His subjection to a profession or calling tax depends only On the fact that he carries on some business
or has some trade or calling within the State of Punjab
The words qualifying the whole or a part of the calling which determines only the taxability of the person cannot possibly on the language used fix also the grade of taxa tion in which the individual falls
We however find that the Punjab High Court in accord ance with a view it had been consistently taking even before the amendment of section 2b of the Act has held that in determining the aggregate gross income only the income made within Punjab by the calling occupation trade or profes sion carried on must be taken into account
We think that this view of the Punjab High Court is based on a very forced interpretation given to the clear words of section 3 of the Act probably because it thought it necessary to do so to make the effect of the section correspond to provisions of Article 2451 of the Constitution
We think that the Punjab High Court has clearly erred in interpreting section 3 in such a way as to make section 2b read with section 5 of the Act useless in determining the tax in accordance with the grada tion laid down in the schedule 2 of the Act
This amounts to nothing short of legislation
We think that the view is an impossible one
The principle that where a provision is capable of one of two interpretations the interpretation which validates rather than one which may invalidate a provision applies only where two views are possible
It cannot be pushed so far as to alter the meanings of the clear words used in an enactment and to
 in effect repeal statutory provisions by making them useless without holding them to be void
It is true that the question of the validity of the provisions of the Act on the ground that they contravene Article 245 1 of the Constitution was also raised in the High Court but the High Court left this question open as it held in favour of the assessee on the first question
As the first question was decided by clearly misinterpreting the provisions of the Act as they stand we have to allow these appeals
A Division Bench of the High Court in the judgment under appeal had purported to follow an earlier Division Bench decision of the High Court in Beli Ram vs The Assessing Authority1 which had interpreted the provi sions of section 3 of the Act as the Act stood before the amend ment of section 2 in the manner indicated above
As the High 1 411 Court had not decided the question of validity of the amend ment these cases cannot be disposed of without deciding that question
We do not propose to express any opinion on this question as we do not have the benefit of the High Court s views on it
In the circumstances mentioned above we set aside the judgments and orders of the High Court on these cases
We send the cases back to the High Court for deciding the question of validity of the amendment to section 2 of the Act
The parties will bear their own costs
PBR Appeals allowed


Summary:
Section 3 of the Punjab Professions Trades Callings and Employment Taxation Act 1956 imposes a tax in re spect of a profession trade calling or employment carried on or followed within the State
Section 5 lays down the manner of determination of tax on the gross income
The term total gross income is defined by section 2 of the Act as aggregate gross income derived from various professions trades callings and employments
The words whether such profession or calling is followed trade is carried on or employment within or outside the State were added to the section by an amendment of 1962
Before the amendment of section 2b the High Court had taken the view that in determining the aggregate gross income only the income derived within the State by a call ing occupation trade or profession must be taken into account for the purposes of taxation
On the question whether the Act restricts taxation of income made within the State
Allowing the State s appeal and remitting the case to the High Court HELD By reading the provisions of section 5 and section 2 togeth er it is clear that the determination in accordance with the scale laid down in the Schedule of the aggregate gross income on which tax is assessed will have to take into account the income of the individual concerned earned both inside and outside the State
409 G 1 a The High Court has clearly erred in interpreting section 3 in such a manner as to make section 2b read with section 5 of the Act useless in determining the tax in
accordance with the gradation laid down in the Schedule to the Act
This amounts nothing short of legislation
410 E F b The only condition for making a person taxable under the Act is that he must also have some profession trade calling or occupation which is to be taxed which he carries on within the State
It does not matter whether the person is employed or carries on the same or other profession trade or calling outside the State also
Section 3 is only meant to indicate that the person who is to be made liable had carried on some profession calling trade or occupa tion within the State and it has nothing to do with the calculation of the aggregate amount of the tax to be levied
That is dealt with by section 5 read with section 2b as amended
In determining the amount of tax the amount an assessee makes outside must also be added to what he makes inside the State
His total gross income determines only his grade or amount of tax he has to pay
His subjection to a profession or calling tax depends only on the fact that he carries on some business or has some trade or calling within the State
410 A C 2
The principle that where a provision is capable of one of two interpretations the interpretation which vali dates rather the one which may invalidate a provision ap plies only where two views are possible
It cannot be pushed so far as to alter the meaning of the clear words used in an enactment and to repeal statutory provisions by making them useless without holding them to be void
410 F The case was remanded to the High Court for deciding the validity of the amendment made to section 2b of the Act 409