Ram Narian vs State Of U. P. - 1953 Supreme(SC) 76

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1953 Supreme(SC) 76

SUPREME COURT OF INDIA
20th September, 1956
BHAGWATI, IMAM, S.K. DAS AND GOVINDA MENON, JJ.
Ram Narain, Appellant
Versus
The State of U.P. and others, Respondents.
Civil Appeal No. 224 of 1955.
Advocates Appeared
Mr. Naunit Lal, Advocate, for Appellant; Mr. G. C. Mathur and Mr.C. P.Lal, Advocates, for Respondents Nos. 1 & 2.

Advocates:
C.P.LAL, G.C.MATHUR, NAUNIT LAL

Headnote:U.P. Town Areas Act, 1914 (U.P. Act II of 1914) Sections 14(1) (f) and 15-Tax on circumstances and property-nexus-whether residence within Town Area necessary condition for imposition of tax-Tax imposed under clause (f) of S. 14 (1) whether can be justified under clause (d)-Rule 3 of the Rules framed under the Act in 1950 whether invalid.
       The appellant resided in the town of Mainpuri and carried on the business of plying a motor bus on hire. The appellants bus plied on alternate days between Etawah and Mainpuri, and the town of Karhar fell on the road between Etawah and Mainpuri. It was not disputed that passengers traveling in appellants bus used to get down or get in at a bus stand within the town of Karhar ; the appellant had a booking office situate within the Town Area and tickets were issued to passengers and an account of the business was maintained in the said booking office.
       The Town Area Committee of Karhar imposed a tax of Rs. 25/- on the appellant for the year 1950-51 under the provision~ of clause (f) of sub-section (J) of section 14 of the D.P. Town Areas Act, 1914, being a tax on his business within the Town Area of Karhar at a sum of Rs. 800/- for the year. The appellant preferred an appeal against the assessment of the tax under section 18 of the Act, and the grounds taken by the appellant were (1) that he did not reside within the limits of the Town Area and (2) that he did not carryon any trade or business within that area. The appeal officer held that the appellant carried on his trade or business within the limits of the Town Area and was therefore rightly assessed to tax under clause (f) of sub-Election (1) of section 14 of the Act. He accordingly dismissed the appeal. The appellant filed a writ application in the High Court on the ground that there could be no assessment under clause (f) because he resides outside the jurisdiction of the Town Area Committee. The application was dismissed by the High Court on the ground that it was unnecessary to consider whether the tax could be legally imposed under clause (f) as the tax imposed could clearly be justified under clause (d) of sub-section (1) of section 14 of the Act which authorized the imposition of a tax on trades, callings or professions. The tax under clause (f) of sub-section (1) of section 14 of the Act related to a tax on "circumstances and property."
       Held (dismissing the appeal): (1) The list prepared under section 15 of the Act must show the assessee as assessed to a certain amount of tax under clause (f) of sub-section (1) of section 14 of the Act and assessment must have been confirmed on that basis by the District Magistrate. Therefore the legality of the tax imposed on the assessee must be considered with reference to one clause under which the assessment is actually made, and a different clause under which the assessment might have fallen cannot be called in aid of the assessment.
       (2) Clause (f) of sub-section (1) of section 14 of the Act does not say in express terms that residence within the Town Area is a necessary condition for the imposition of the tax. The rules make it quite clear that, for each of the clauses of sub-section (1) of section 14 there is a nexus between the territorial jurisdiction of the Town Area Committee and the imposition of the tax. So far as clause (d) is concerned, the nexcus is that the trade, calling or profession must be carried on within the limits of the Town Area. So far as clause (f) is concerned, rule 3 makes it quite clear that the nexus is either residence within the limits of the Town Area or carrying on business within the same limits. On a proper construction of clause (f), read with the limitations and restrictions embodied in the rules made under section 39 of the Act it cannot be held that residence within the Town Area of Karhar was necessary condition for the imposition of the tax on the appellant. Further, by reason of sub-section (4) of section I5-A, it cannot be held that residence within the Town Area is a necessary condition for the imposition of a tax in all the clauses of sub-section (1) of section 14 of the
       Act. The appellant was, therefore, rightly assessed to the tax.
       (3) Proviso of clause (f) makes it clear that a person who is already assessed under clauses (a) to (e) cannot be assessed again under clause (j). The proviso is intended to avoid multiple taxation, but it is manifest from the proviso that there may be overlapping of the different clauses in sub-section (1) of section 14, the proviso is necessary to prevent the same person being tax more than once under the different clause of sub-section (1) of section 14 of the Act.
       (4) A tax on circumstances and property is a composite tax and the word circumstances means financial position, his status as a whole depending among other things, on his income from trade or business.

Judgment

S. K. DAS J. - This is an appeal by special leave from the judgement and order of the High Court of Judicature at Allahabad dated 7-5-1954 by which the H. C. dismissed an application of the appellant for the issue of a writ of certiorari under the provisions of Art. 226 of the constitution. The appeal raises the question of the validity of the assessment of a tax on the appellant for the year 1950-51 by the Town Area Committee of Karhal under the provisions of cl.(f) of sub.s.(1) of S.14, U. P. Town Area Act, 1914 (U.P. Act 2 of 1914), hereinafter referred to as the Act.

2. The appellant resides in the town of Mainpuri and carries on the business of plying a motor bus on hire. The appellant s bus plies on alternate days between Etawah and Mainpuri, and the town of Karhal falls on the route between Etawah and Mainpuri. It is not now disputed that passengers travelling in the appellant s bus used to get down or get in at a bus stand within the town area of Karhal; the appellant had a booking office situate within the Town Area and tickets were issued to passengers and an account of the business was maintained in the said booking office.

The Town Area Committee of Karhal imposed a tax of Rs. 25 on the appellant for the year 1950-51 under the provisions of cl. (f) of sub.s. (1) of S.14 of the Act, being a tax on his business within the Town Area of Karhal at a sum of Rs. 800 for the year. The-appellant preferred an appeal against the assessment of the tax under S.18 of the Act, and the grounds taken by the appellant were (1) that he did not reside within the limits of the Town Area and (2) that he did not carry on any trade or business within that Area.

By his order dated 20-10-1951, the Appeal Officer held that the appellant carried on his trade or business within the limits of the Town Area and was therefore rightly assessed to tax under cl.(f) of sub.s.(1) of S.14 of the Act. He accordingly dismissed the appeal. It may be stated here that the appellant was asked to submit an account of his income, but no such account was submitted and the assessing officer worked out the income of the appellant at about Rs. 67 a month, that is, about Rs. 800 a year. No question about the amount of the tax has been raised before us, and it is not necessary to say anything further with regard to the quantum of assessment.

3. The appellant then filed a writ application in the H. C. of Judicature at Allahabad and the ground taken by him was that, there could be no assessment under cl.(f) of sub.s.(1) of S.14 of the Act, because he resided outside the jurisdiction of the Town Area. The learned Judge, who dealt with the application of the appellant, took the view that the tax imposed on the appellant could clearly be imposed under cl.(d) of sub.s.(1) of S.14 of the Act; therefore it was unnecessary to consider whether the tax could be legally imposed under cl.(f) of sub.s(l) of S.14. The learned Judge also expressed the view that residence within the Town Area was not a prerequisite condition for the imposition of the tax under cl.(d), and it was enough if the appellant carried on a trade or business within the Town Area. On these views, the learned Judge dismissed the writ application.

4. The main point which has been urged before us by learned counsel for the appellant is that the assessments of a tax under cl.(f) sub.s.(1) of S.14 on the appellant was not valid, because residence within the Town Area was a necessary condition for the assessment of a tax under cl.(f). Learned Counsel also argued before us that the assessing authority having assessed a tax on the appellant under cl.(f), it was not open to the H.C. to say that the tax was legally valid under a different clause, namely cl.(d) of sub.s.(1) of S.14.

5. With regard to his second point, learned counsel has drawn our attention to Ss. 15 to 17 of the Act. He has pointed out that under S.15 of the Act a list of persons liable to pay the tax imposed under S. 14 and of the amounts to be pai

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