Judgment

SARKARIA, J.:- This appeal by special leave is directed against a judgment, dated October 3, 1968 of the High Court of Punjab and Haryana.

2. The facts leading to this appeal are that the appellants are partners of a firm, Bharat Industries, Chheharta.

3. By a notification, dated May 15, 1946, the Chheharta Municipal Committee levied a profession tax under Section 61 (1) (b) of the Punjab Municipal Act, 1911. Initially, the tax was Rs. 15/- per annum and was levied on all the partners of the said firm.

4. By a notification, dated July 4, 1958, the annual tax for trade, profession or calling for the owner of a factory registered under the Indian Factories Act, was raised to Rs. 200/- per annum and each of the six partners of the said firm were assessed to annual tax of Rs. 200/- by the Municipal Committee.

5. On October 30, 1960, the appellants filed a suit for permanent injunction restraining the defendant-Committee from realising the profession tax demanded by it per letters Nos. 15 to 20, dated May 31, 1960, amounting to Rs. 1,200/-.

6. The appellants challenged the validity of the assessment contending that construed in the light of the definition given in Section 2 (40) of the Punjab General Clauses Act, the term "person" occurring in Section 6 (1) (b) of the Punjab Municipal Act, 1911, includes a firm and since the trade carried on by the firm is one, the tax could be levied only on the firm, and not on the partners individually. On these premises, it was pleaded that the Municipal Committee in levying the tax on the individual partners had exceeded its statutory powers under Section 61 (1) (b) of the Municipal Act.

7. The trial court dismissed the suit, On appeal by the plaintiffs, the Additional District Judge, Amritsar, reversed the judgment of the trial court and decreed the suit.

8. The Municipal Committee carried a further appeal to the High Court. The learned single Judge, who heard the appeal, affirmed the judgment and decree of the first appellate court, on the reasoning which may be summed up as under:

9. The term "person" in Section 61 (1) (b) of the Municipal Act, interpreted in the light of the definition given in Section 2 (40) of the Punjab General Clauses Act, includes a partnership. Under clause (b) of Section 61 (1) of the Municipal Act, the basis on which the liability to pay tax arises, is the trade profession or business; and if the trade and business is one carried on by several persons collectively in partnership, then the partnership alone, and not the individual partners, are liable to pay the tax; that the liability on the partners will fall twice which is not contemplated by the scheme and language of the Municipal Act, even though all the partners are jointly and severally liable to any tax for the partnership business.

10. In support of his conclusion that the tax was on trade and not on persons. the learned Judge by way of analogy, referred to clauses (a), (c), (d), (e) and (f) of sub-section (1). He also referred to two Madras decisions in Municipal Commrs. of Negapatam v. Sadaya Pillai, (1883) ILR 7 Mad 74 and Davies v. President of the Madras Municipal Commission, (1890) ILR 14 Mad 140 and found himself in entire agreement with the reasoning of the learned judges in those cases.

11. Aggrieved, the Municipal Committee preferred a Letters Patent Appeal. The Appellate Bench of the High Court held that to import the definition of the term "person" occurring in Section 2 (40) of the Punjab General Clauses Act, into S. 61 (1) (b) of the Municipal Act, will be repugnant to the subject. In the opinion of the Bench, under the scheme of the statute in question, the tax cannot be levied on a firm or factory as such, but only on the individual owners of the factory or of the firm. On this reasoning, the Bench reached the conclusion "that under Section 61 (1) (b) of the Act, it is the individual who is to be assessed and is liable to pay the tax mentioned therein and so the assessment as well as the