The presence of an office within a Panchayat area deems a company to have transacted business, irrespective of the nature of transactions conducted in the office.

1. The question to be decided in the Civil Revision Petition filed by the defendant is whether the plaintiff a public limited company registered under the Companies Act is liable to pay profession tax under S.56 of the Travancore-Cochin Panchayats Act read with R.123 and 125 of the Travancore-Cochin Panchayat Rules, 1951.

2. Both the courts below took the view that during the relevant years the plaintiff was not transacting any business within the Panchayat area and is therefore not liable for assessment to professional tax. The submission of the learned counsel for the defendant was that the findings of the courts below cannot be sustained under S.56 of the Travancore-Cochin Panchayats Act and R.123 and 125 of the Travancore-Cochin Panchayat R.1951.

S. 56 reads thus: "Any Panchayat,

(a) after observing such preliminary procedure and rules as may be prescribed;

(b) subject to such bye-laws as may be framed by the Panchayat; and (c) subject to the previous sanction of Government, may impose, at such rates no exceeding the maxima prescribed, all or anyone or more of the following:

(1) a cess on land other than any land or class of which Government may, by notification in the Gazette, exempt;

(2) any rate, tax, cess or any licence or other fee for the discharge of the duties under this Act". Rules 123 clause (1) and 125 which are alone relevant for this appeal are as as follows:

Rule 123 (1). "Every Company which transacts business in a Panchayat area for not less than sixty days in the aggregate in any half-year and every person who in any half-year;

(a) exercises a profession, art or calling or transacts business or holds any appointment, public or private

(i) within the Panchayat area for not less than sixty days in the aggregate, or

(ii) without the Panchayat area but who resides in the Panchayat area for not less than sixty days in the aggregate, or

(b) resides in the Panchayat area for not less than sixty days in the aggregate and is in receipt of any pension or income from investments,

shall pay a half-yearly tax".

Rule 125. "A company or person shall be deemed to have transacted business and a person shall be deemed to have exercised a profession, art, or calling or held an appointment within a Panchayat area if such company or person has an office or place of employment within such Panchayat area".

3. The argument of the learned counsel for the appellant was that the evidence in the case shows that the plaintiff company was having an office during the relevant period within the jurisdiction of the Panchayat and the company must therefore be deemed to have been transacting business in view of R.125.

4. The courts below have not given due weight to the scope of R.125. Even in the plaint, it is admitted by the plaintiff that the company owns a rubber estate within the jurisdiction of the Panchayat. dw. 2 who is the Manager of the plaintiff company, deposed that the company is having an estate office in the estate within the jurisdiction of the Panchayat. According to dw. 2 there are two Assistant Managers and five members in the clerical staff in the office. According to the learned counsel for the plaintiff, the members working in the office are only attending to the collection of latex from the estate, which is sent to Pierce Leslie and Co., Cochin and this will not amount to 'transacting business' for the purpose of assessment under R.123(1) of the Panchayat Rules. We do not think that this contention of the learned counsel for the plaintiff is entitled to any weight.

5. A Division Bench of this Court had to consider in O. P. 1103 of 1963 the question of assessment of a company under R.20 of the Taxation and Finance Rules in Schedule II to Kerala Municipalities Act, 1960. The wording of this rule is identical with the wording of R.125 of the Panchayat Rules. It was held that since the company had an office within the Quilon Municipality it must therefore be considered transacting business within the Municipality and thus lia