The Act falls within the legislative competence under entry 60 of List II of the Constitution and is not a tax on income. The provisions of the Act were found to be in line with Art.276 of the Constitution and were held to serve a public purpose. The Court also rejected the arguments of repugnancy with the Income-tax Act and concluded that the Act is a valid measure of taxation.

1. The validity of the Kerala Tax on Employment Act, 1976 (Act 14 of 1976) has been challenged in these writ petitions. The grounds of challenge raised in the various writ petitions may usefully be preceded by a brief survey of the provisions of the Act.

2.S.4 is the charging section. Clause (1) thereof, which is the main. provision, reads:

"4. Charge of tax (1) Subject to the other provisions contained in this Act, there shall be charged on every person who exercises a profession, art or calling or transacts business or holds any appointment, public or private, within the State, a half-yearly tax (hereinafter referred to as tax on employment) at the rate specified in the Schedule.

Explanation: A person shall be deemed to have exercised a profession, art or calling or held an appointment within the State, if that person has an office or place of employment within the State."

S. 5 provides for deduction of the tax on employment by the employer from the salary or wage payable to a person. S.4 provides for every employer liable to pay tax under S.5 obtaining a certificate of registration from the assessing authority. We skip over the provisions which provide for submission of return, assessment, recovery, penalty, appeals etc. S.26 bars the jurisdiction of a civil court to set aside or modify any assessment made under the Act and grants immunity to the Government or any authority or officer for anything done in good faith under this Act. The provision follows the familiar pattern known to many tax legislations. S.29 is the rule making section. S.30 provides for the establishment of a housing fund and its utilisation. The Kerala State Poor Housing Fund is to be established on the commencement of the Act. Clause.2 to 6 of S.30 are as follows:

"30. Establishment of Housing Fund and its utilisation-

(2) The proceeds of the tax on employment levied and collected under this Act, together with the fines, interest and fees recovered thereunder, shall first be credited to the Consolidated Fund of the State, and, after deducting the expenses of collection and recovery as determined by the Government, the remaining amount shall, under appropriation duly made by law in this behalf, be entered into, and transferred to, the Housing Fund.

(3) Any amount transferred to the Housing Fund shall be charged on the Consolidated Fund of the State.

(4) No sum shall be paid or applied from and out of the Housing Fund except in the manner and for the purpose provided in sub-sections (5) and (6).

(5) The amount standing to the credit of the Housing Fund shall be expended in such manner and subject to such conditions as may be prescribed for the purpose of providing house sites for landless poor persons.

Explanation For the purposes of this sub-section, "landless poor person" means a person who does not hold any land which is fit for construction of a dwelling house, either as owner or as tenant having fixity of tenure, and whose annual income is not more than six hundred rupees.

(6) The Housing Fund shall be held and administered on behalf of the Government by an officer not below the rank of Secretary to the Government, subject to such general or specified directions as may be given by the Government from time to time."

Turning to the schedule, it is enough to notice that the tax is on a graded scale depending on the half yearly income of the person liable to pay. Those having half yearly income of Rs. 1800/-and less, are completely exempt; those with income ranging from Rs. 1800/- to Rs. 3000/- are liable to pay Rs. 6/-per half year; those between Rs. 3000/- and Rs. 4800/- are liable to pay Rs. 18/-; and so on.

3. We next notice the grounds of challenge to the Act. The legislative competence to enact the measure was attacked by some of the writ petitioners. The grounds on which the challenge was rested themselves vary. Some of the writ petitioners (for instance the writ petitioner in O.P. 969 of 1978) contended that it was a tax on housing, not covered b