Case: Municipal Committee, Akot Vs. Manilal Manekji Pvt. Ltd. And Another

imposing special burdens on, municipal services, imposed under Cl. (ii) of sub-s. (1) of S. 128 of the United Provinces Municipalities Act, 1916.4. The tax on persons exercising any profession or art, or carrying on any trade or calling, within the limits of the municipality, imposed under Cl. (b) of sub-s. (1) of S. 66 of the Central Provinces Municipalities Act, 1922.5. The tax on companies, imposed under S. 110 of the Madras City Municipal Act, 1919.*"*Ins. By S. 2 of the Professions Tax Limitation (Amendment) Act, 1946 (V of 1946) (retrospectively).On behalf of the Municipality it was inter alia contended before the High Court that the impugned tax fell within Item 4 of the Schedule to the Profession Tax Limitation Act, 1941, but the High Court negatived the contention following an earlier judgment of the High Court in an unreported case [Bidarbha Mills Berar Ltd. v. City Municipal Committee of Achalpur, Special Civil Appln. No. 104 of 1960, D/- 9-8-1960 (Bom-Nagpur Bench)].9. The learned Solicitor-General, appearing for the appellant Municipal Committee, contended that Item No. 4 in the Schedule covers the impugned tax because the Act is the same under which the tax is being imposed and recovered and the fact that the title of the Central Provinces Municipalities Act, 1922, was changed by the Berar Laws (Provincial) Act, 1941, does not make any difference. He says that there is nothing in the Profession Tax Limitation Act, 1941, to show that the exemption was intended to be given only to a particular territory. He further urges as follows : The fact that this notification No. 98, dated March 14, 1899, is now deemed to be issued under the Central Provinces and Berar Municipalties Act, 1922, does not make it any the less imposed under the Central Provinces Municipalities Act, 1922, within Item 4; if a tax is deemed to be imposed under the Central Provinces and Berar Municipalities Act, 1922, it is still a tax imposed under S. 66 (1) of the Central Provinces Municipalities Act, 1922, it is a case of misdescription that the word Berar has not been mentioned in Item 5 of the Schedule to the Profession Tax Limitation Act, 1941; the item will be otiose if any other meaning is ascribed to it.10. In our opinion the High Court came to the correct conclusion. First, Item No. 4 is an exemption from the limitation imposed by S. 2 of the Professions Tax Limitation Act, 1941, and the exemption must be construed strictly. Secondly, the effect of S. 3 and Item 4 of the Schedule is to continue the liviability of a tax and, in our opinion, this item must be construed strictly like a taxing statute. If Mr. Gupte had been able to convince us that the item would be otiose if this interpretation is put there would be something to say in his favour. But the item will not be otiose even if we do not treat Item 4 as a case of misdescription but give the plain meaning that the Central Provinces Municipalities Act, 1922, means the Central Provinces Municipalities Act, 1922, and not the Central Provinces and Berar Municipalities Act, 1922. Various taxes must have been imposed by the Municipalities in the Central Provinces by virtue of notifications issued under S. 66 (1) (b) of the Central Provinces Municipalities Act, 1922, and they would fall within the ambit of Item 4. Further if we accept Mr. Guptes argument we will not be giving full effect to the word imposed". This, in our view, means that the taxes which can continue to be levied should have been imposed in the past before the Profession Tax Limitation Act, 1941, came into force. This is in consonance with S. 142 A (2) of the Government of India Act, 1935, which was in the following terms:"142 A (2). The total amount payable in respect of any one person to the Province or to any one municipality, district board, local board, or other local authority in the Province by way of taxes on professions, trades, calling and employments shall not, after the thirty-first day of March nineteen hundred and thirty-nine, exceed fifty rupees per annum :Provided that, if in the financial year ending with that date there was in force in the case of any Province or any such municipality, board or authority a tax on professions, trades, callings or employments the rate, or the maximum rate, of which exceeded fifty rupees per annum, the preceding provisions of this sub-section shall, unless for the time being provision to the contrary is made by a law of the Dominion Legislature, have effect in relation to that Province, municipality, board or authority as if for the reference to fifty rupees per annum there were substituted a reference to that rate or maximum rate, or such lower rate, if any (being a rate greater than fifty rupees per annum), as may for the time being be fixed by a law of the Dominion Legislature; and any law of the Dominion Legislature made for any of the purposes of this proviso may be made either generally or in relation to any specific Provinces, municipalities, boards or authorities.The proviso clearly shows that the section enabled the Dominion Legislature to make a contrary provision if in the financial year ending March 31, 1939, there was in force a tax on professions, trades, callings or employments the rate of which exceeded Rs. 50. The Dominion Legislature could not authorise under the proviso a fresh imposition exceeding Rs. 50.11. In view of our above conclusions it is not necessary to deal with the point whether the word "imposed" in Item 4 of the Schedule to the Profession Tax Limitation Act, 1941, would include "deemed to be imposed" because by virtue of S. 3 of the Berar Laws (Provincial) Act, 1941, the tax would be deemed to be imposed not under the Central Provinces Municipalities Act, 1922, but the Central Provinces and Berar Municipalities Act, 1922.

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

Explanation:
0[ds]10. In our opinion the High Court came to the correct conclusion. First, Item No. 4 is an exemption from the limitation imposed by S. 2 of the Professions Tax Limitation Act, 1941, and the exemption must be construed strictly. Secondly, the effect of S. 3 and Item 4 of the Schedule is to continue the liviability of a tax and, in our opinion, this item must be construed strictly like a taxing statute. If Mr. Gupte had been able to convince us that the item would be otiose if this interpretation is put there would be something to say in his favour. But the item will not be otiose even if we do not treat Item 4 as a case of misdescription but give the plain meaning that the Central Provinces Municipalities Act, 1922, means the Central Provinces Municipalities Act, 1922, and not the Central Provinces and Berar Municipalities Act, 1922. Various taxes must have been imposed by the Municipalities in the Central Provinces by virtue of notifications issued under S. 66 (1) (b) of the Central Provinces Municipalities Act, 1922, and they would fall within the ambit of Item 4. Further if we accept Mr. Guptes argument we will not be giving full effect to the word imposed". This, in our view, means that the taxes which can continue to be levied should have been imposed in the past before the Profession Tax Limitation Act, 1941, came intothat, if in the financial year ending with that date there was in force in the case of any Province or any such municipality, board or authority a tax on professions, trades, callings or employments the rate, or the maximum rate, of which exceeded fifty rupees per annum, the preceding provisions of this sub-section shall, unless for the time being provision to the contrary is made by a law of the Dominion Legislature, have effect in relation to that Province, municipality, board or authority as if for the reference to fifty rupees per annum there were substituted a reference to that rate or maximum rate, or such lower rate, if any (being a rate greater than fifty rupees per annum), as may for the time being be fixed by a law of the Dominion Legislature; and any law of the Dominion Legislature made for any of the purposes of this proviso may be made either generally or in relation to any specific Provinces, municipalities, boards orproviso clearly shows that the section enabled the Dominion Legislature to make a contrary provision if in the financial year ending March 31, 1939, there was in force a tax on professions, trades, callings or employments the rate of which exceeded Rs. 50. The Dominion Legislature could not authorise under the proviso a fresh imposition exceeding Rs. 50.11. In view of our above conclusions it is not necessary to deal with the point whether the word "imposed" in Item 4 of the Schedule to the Profession Tax Limitation Act, 1941, would include "deemed to be imposed" because by virtue of S. 3 of the Berar Laws (Provincial) Act, 1941, the tax would be deemed to be imposed not under the Central Provinces Municipalities Act, 1922, but the Central Provinces and Berar Municipalities Act, 1922.