1. The question referred for our decision is Does the word capital used in Schedule V of the Municipal Act III of 1904 mean exclusively nominal capital or does it also include paid-up capital and, if so, should it be taken to mean paid-up capital exclusively?

2. The law (Section 176, Madras City Municipal Act, 1904) hardly contemplates a reference in such general and abstract terms. It only empowers the Magistrates to state a case on any appeal before them and refer the same for the decision of the High Court, that is, to state all the matters necessary for the decision of the particular case before them on appeal and to refer the case so stated for decision. The facts are, however, fully stated in the reference, and we proceed to deal with them.

3. The case arises out of a dispute between the Madras Municipality and the Mylapore Hindu Permanent Fund, Limited, as to the basis on which the fund should be charged with professional tax. The Municipality claims to tax the fund under Clause I(a) of Schedule V on its nominal capital. The Fund contends that it should be taxed under Clause I(b) of the Schedule on its paid-up capital.

4. Under Clause I(a) joint stock companies and othe