Case: Ram Bachan Lal Vs. State of Bihar &amp; Another

municipality, and to extend to it all or any of the provisions of this Act. (b) When the State Government is satisfied that any municipality, or any area in a municipality, does not fulfil the conditions specified in clause (a), or when the Commissioners at a meeting have made a recommendation in this behalf, the State Government may declare its intention to withdraw such municipality from the operation of this Act, or to exclude such area from such municipality. It would be noticed that S. 4(1) contemplates a town containing not less than five thousand inhabitants and a town of a particular density of population, and further that three-fourths of the adult male population should be engaged in pursuits other than agriculture. Now, these requirements show that the area has reached such a stage of development that the Government should constitute a municipality in the area. Section 388 would come into the picture only if the requirements of S. 4 are not satisfied but yet the Government considers it necessary to make administrative provisions for all or any of the purposes of this Act. In our opinion, this gives sufficient guidance to the Government and thus no arbitrary power has been conferred on the Government 11. Coming to the second point, S. 82 is challenged on various grounds. First, it is said that the proviso to S. 82 (1)(ff) enables the Government to exempt any classes of profession, trades or callings from the tax, without giving any guidance as to which classes should be exempted. We do not find it necessary to deal with this academic point because, first, the Government has not exercised this power and, secondly, even if we were to hold this proviso to be violative of Art. 14, it would he severable and would not give any relief to the petitioner. The second ground of attack is that the rate of tax to be levied has been left to the discretion of the Commissioners under S. 82(1)(ff) and of the Government under proviso (iv) to S. 82(1) without giving any guidance as to the amount of tax. We see no force in this contention. Schedule IV specifies the maximum amount of tax that can be levied and Section 150D lays down the purposes for which the tax can be utilised. This, in our view, gives sufficient guidance to the Commissioners of the State Government to fix the rate of tax. In The Corporation of Calcutta v. Liberty Cinema, (1965) 2 SCR 477 : (AIR 1965 SC 1107 ) this Court, by majority, upheld the validity of S. 548 of the Calcutta Municipal Act. Speaking for the majority, Sarkar J., as he then was, observed:"It seems to us that there are various decisions of this Court which support the proposition that for a statutory provision for raising revenue for the purposes of the delegate, as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid." In view of these observations it is clear that S. 150 A gives sufficient guidance to the Commissioners and the State Government to fix the rate of taxation. 12. Mr. Sen then urged that proviso (iv) to S. 82(1) is void because it does not give any indication as to the circumstances under which the Government should direct the Commissioners to levy the tax under Section 82(1)(ff). It seems to us that the Government will only direct the Commissioners to levy the tax if the Commissioners do not carry out their duty properly. Chapter XIII of the Act, which has been applied to the Notified Areas, confers powers of control on the State Government over the Notified Areas and the Government would only act under proviso (iv) to S. 82(1) if it is necessary in view of the circumstances of the case. 13. Mr. B. Sen then argued that the Act does not lay down proper procedure for the assessment and the determination of the tax. We see no force in this contention. We have already set out the explanations to S. 150 A. Explanation (1) clearly provides that if a person is assessable to income-tax under the Indian Income-tax Act, 1922, his taxable income would be determined according to the provisions of the Indian Income-tax Act, and if he is not assessable his taxable income would be computed as far as may be in accordance with the procedure laid down in the said Act 14. Some complaint was made about Explanation (2) that unnecessary burden was being placed on the person, liable to tax, but we are unable to appreciate this point. The assessee has only to produce the order from the assessing authorities to establish the amount of this taxable income. 15. The last complaint was that no appeals or references are provided in the Act and the only remedy of an assessee who was aggrieved by the assessment is to file a review under S. 150E. In the circumstances we consider that S. 150E gives a reasonable remedy to an aggrieved person. Sub-section (2) of S. 150E directs that the application has to be heard and determined in accordance with the procedure laid down in Sections 115, 117, 118 and 119. These sections have been applied to the Notified Area Committees. Under S. 117 a review would be heard by a Committee consisting of not less than three Commissioners and the Committee is further entitled to take evidence and to make such enquiries as it deems necessary. The subject matter of Profession Tax is not very complicated and in our view, the procedure provided for the assessment and review is reasonable. 16. We may mention that similar points were raised before the Patna High Court and the High Court rejected them in Rohtas Industries Ltd., Dalmianagar v. State of Bihar, 1965 BLJR 886. 17.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Coming to the second point, S. 82 is challenged on various grounds. First, it is said that the proviso to S. 82 (1)(ff) enables the Government to exempt any classes of profession, trades or callings from the tax, without giving any guidance as to which classes should be exempted. We do not find it necessary to deal with this academic point because, first, the Government has not exercised this power and, secondly, even if we were to hold this proviso to be violative of Art. 14, it would he severable and would not give any relief to the petitioner. The second ground of attack is that the rate of tax to be levied has been left to the discretion of the Commissioners under S. 82(1)(ff) and of the Government under proviso (iv) to S. 82(1) without giving any guidance as to the amount of tax. We see no force in this contention. Schedule IV specifies the maximum amount of tax that can be levied and Section 150D lays down the purposes for which the tax can be utilised. This, in our view, gives sufficient guidance to the Commissioners of the State Government to fix the rate of taxIt seems to us that the Government will only direct the Commissioners to levy the tax if the Commissioners do not carry out their duty properly. Chapter XIII of the Act, which has been applied to the Notified Areas, confers powers of control on the State Government over the Notified Areas and the Government would only act under proviso (iv) to S. 82(1) if it is necessary in view of the circumstances of the caseIt seems to us that the Government will only direct the Commissioners to levy the tax if the Commissioners do not carry out their duty properly. Chapter XIII of the Act, which has been applied to the Notified Areas, confers powers of control on the State Government over the Notified Areas and the Government would only act under proviso (iv) to S. 82(1) if it is necessary in view of the circumstances of the caseWe see no force in this contention. We have already set out the explanations to S. 150 A. Explanation (1) clearly provides that if a person is assessable to income-tax under the Indian Income-tax Act, 1922, his taxable income would be determined according to the provisions of the Indian Income-tax Act, and if he is not assessable his taxable income would be computed as far as may be in accordance with the procedure laid down in the said ActSome complaint was made about Explanation (2) that unnecessary burden was being placed on the person, liable to tax, but we are unable to appreciate this point. The assessee has only to produce the order from the assessing authorities to establish the amount of this taxable incomeThe last complaint was that no appeals or references are provided in the Act and the only remedy of an assessee who was aggrieved by the assessment is to file a review under S. 150E. In the circumstances we consider that S. 150E gives a reasonable remedy to an aggrieved person. Sub-section (2) of S. 150E directs that the application has to be heard and determined in accordance with the procedure laid down in Sections 115, 117, 118 and 119. These sections have been applied to the Notified Area Committees. Under S. 117 a review would be heard by a Committee consisting of not less than three Commissioners and the Committee is further entitled to take evidence and to make such enquiries as it deems necessary. The subject matter of Profession Tax is not very complicated and in our view, the procedure provided for the assessment and review is reasonable.