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1965 Supreme(Pat) 78
PATNA HIGH COURT
U.N.Sinha and Tarkeshwar Nath JJ.
Bank Of Bihar Ltd.
Versus
Commissioner Of Buxar Municipality
Miscellaneous Judicial Case No. 875 of 1962 ;
Decided On : JULY 28, 1965
A joint stock company transacting business within a municipality for profit is liable to pay professional tax under Sec.128 of the Bihar and Orissa Municipal Act, irrespective of whether any profit actually accrues within the limits of the municipality.
Headnote:
TAXATION - Professional Tax - Assessment - Joint Stock Company - Branch Office - Liability to pay tax - Bihar and Orissa Municipal Act (Bihar Act VII of 1922), Secs. 82(1)(ff), 150-A, Fourth Schedule.
Fact of the Case:
The petitioner, a joint stock company, had a branch office at Buxar. The Commissioners of Buxar Municipality assessed the petitioner to professional tax under Sec.128 of the Bihar and Orissa Municipal Act (Bihar Act VII of 1922). The petitioner objected to the assessment on the ground that its branch office was not a joint stock company and was not liable to be assessed as such. The Revising Committee of the Buxar Municipality overruled the objections and upheld the assessment.
Finding of the Court:
The court held that the petitioner was liable to pay professional tax under Sec.128 of the Bihar and Orissa Municipal Act. The court held that the petitioner was a joint stock company transacting business within the Buxar Municipality for profit and that it was immaterial whether any profit actually accrued within the limits of the Buxar Municipality. The court also held that the assessment of the tax was valid and that the petitioner had not made out a case for grant of a writ in the nature of certiorari or any other writ.
Issues: Whether the petitioner was liable to pay professional tax under Sec.128 of the Bihar and Orissa Municipal Act.
Ratio Decidendi: The court held that the petitioner was liable to pay professional tax under Sec.128 of the Bihar and Orissa Municipal Act because it was a joint stock company transacting business within the Buxar Municipality for profit. The court held that it was immaterial whether any profit actually accrued within the limits of the Buxar Municipality. The court also held that the assessment of the tax was valid and that the petitioner had not made out a case for grant of a writ in the nature of certiorari or any other writ.
Final Decision: The court dismissed the petitioner's application with consolidated cost of Rs. 200.
Tarkeshwar Nath, J.
1. This application by the Bank of Bihar Ltd. under Articles 226 and 227 of the Constitution of India is for the issuance of a writ in the nature of certiorari quashing the decision, dated the 30th May 1962, of the Revising Committee of the Buxar Municipality and the demand notices issued by the said Municipality.
2. The petitioner (the Bank of Bihar Ltd.) is a joint stook Company transacting business is a banker within the limits of the Patna Municipal Corporation, Patna, and the petitioner was assessed to the professional tax as a joint stock company under the provisions of Sections 128 (1) (i) and 177 read with Clause 1(1)(a) of the second schedule of the Patna Municipal Corporation Act (Bihar Act 18 of 1952). The petitioner has several branch offices in the State of Bihar, Uttar Pradesh and West Bengal and one of the branch offices was at Buxar. The petitioner received a demand notice for professional tax under Sec.128 of the Bihar and Orissa Municipal Act (Act VII of 1922), on the 20th July 1981. and was directed to pay professional tax of Rs. 250 for the year 1960-61 (vide Annexure A). The petitioner filed objections mainly on the ground that the office or the petitioner at Buxar was only a branch office and not a joint stock company as mentioned in Clause 1 (a) of the fourth schedule to the Bihar and Orissa Municipal Act and the said branch office was not liable to be assessed as a joint stock company. Moreover, me monthly valuation in respect or the premises occupied by the said branch office was Rs. 100 only and as such it was liable, if at all, to professional tax under Clause 1 (b) (d) of the fourth Schedule to the said Act.
The copy of the objection petition has been marked Annexure B. The said objections were considered by the Revising Committee of the Buxar Municipality and a copy (Annexure C) of its decision, dated the 30th May 1962, was lent to the petitioner by a letter, dated the 2nd June 1962. The copy of the letter has been marked Annexure D. The said Committee overruled the objections holding that the branch office of the Bihar Bank at Buxar was carrying on banking business for making profit within the Buxar Municipal area and as such the Bank had to take out half yearly license and pay the professional tax assessed on it. The assessment of Rs. 125 as professional tax half yearly was held to be fully justified. On the 21st June 1962, the petitioner received another demand notice, dated the 7th June 1962, in respect of the professional tax for the two kists of 1960-61 and 1961-62 each and a copy of this demand notice has been marked Annexure E. The ease of the petitioner was that the said notice of demand was ab initio void as it purported to be under Sec.128 of the Bihar and Orissa Municipal Act and not under Section 82 (1) (ff) and Sec.150-A of the said Act.
In these circumstances, the petitioner made a prayer for the quashing of the said order or the Revising Committee and the notices of demand. Subsequently, the petitioner filed additional grounds in support of the petition indicating that the Bihar Municipal (Amendment) Act. 1958 (Bihar Act XXXII of 1938) amending Section 82 and inserting Sections 150-A to 130-1 and the fourth schedule were ultra vires, in so far us it infringed the equality clause enshrined in Article 14 of the Constitution of India and imposed unreasonable restrictions in contravention of Article 19 (1) (g) of the Constitution of India. Another ground was that the proviso to Clause (sic) in Sub-section (1) of Section 82 as it stood after the amendment was discriminatory on the very face of it, inasmuch as it conferred uncontrolled and arbitrary powers on the State Government to exempt certain classes of profession, trade or callings, according to the sweet will or the executive.
3. Learned counsel for the petitioner (the Bank of Bihar Ltd.) submitted at the outset mat the Commissioners of Buxar Municipality (respondent 1) had no jurisdiction to assess the
