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Allahbad High Court
S.N.DWIVEDI,GYANENDRAKUMAR,SATISHCHANDRA,R.L.GULATI,HARISWARUP
The Notified Area Committee - Appellant
Versus
Ram Singhasan Prasad Kalwar - Respondent
Decided On : 04/28/1970
TAXATION - TOWN AREAS ACT, 1914 - SECTION 14(1) (F) - CONSTITUTIONALITY - TAX ON CIRCUMSTANCES AND PROPERTY - WHETHER A COMPOSITE TAX - WHETHER WITHIN THE LEGISLATIVE COMPETENCE OF THE STATE LEGISLATURE - GOVERNMENT OF INDIA ACT, 1935 - SECTION 142-A(2) - PROFESSION TAX LIMITATION ACT, 1941 - SECTION 2 - WHETHER VOID - MUNICIPALITIES ACT, 1916 - SECTION 128 - WHETHER TAX ON CIRCUMSTANCES AND PROPERTY INCLUDES TAX ON TRADES, CALLINGS AND PROFESSIONS - CONSTITUTION OF INDIA, 1950 - ARTICLES 225, 226, 276(2) - WHETHER TAX ON CIRCUMSTANCES AND PROPERTY IS A COMPOSITE TAX - WHETHER WITHIN THE LEGISLATIVE COMPETENCE OF THE STATE LEGISLATURE - WHETHER TAX ON CIRCUMSTANCES AND PROPERTY INCLUDES TAX ON TRADES, CALLINGS AND PROFESSIONS.
Fact of the Case:
The appellant, the Notified Area Committee of Mohammadabad, assessed the respondent with a tax of Rs. 281.25 on his circumstances and property. The respondent challenged the assessment, and the learned Single Judge quashed it. The appellant filed an appeal against the judgment of the learned Single Judge.
Finding of the Court:
The Court held that the tax on circumstances and property is a composite tax comprising a tax on trades, callings, professions and employment and a tax on lands and buildings. The Court further held that the tax on circumstances and property is within the legislative competence of the State Legislature and that Section 14(1) (f) of the Town Areas Act, 1914 is not unconstitutional.
Issues: 1. Whether the tax on circumstances and property is a composite tax? 2. Whether the tax on circumstances and property is within the legislative competence of the State Legislature? 3. Whether Section 14(1) (f) of the Town Areas Act, 1914 is unconstitutional?
Ratio Decidendi: 1. The Court held that the tax on circumstances and property is a composite tax comprising a tax on trades, callings, professions and employment and a tax on lands and buildings. The Court relied on the history of the tax, the language and context of Section 14(1) (f) of the Town Areas Act, 1914, and the principles of constitutional construction to arrive at this conclusion. 2. The Court held that the tax on circumstances and property is within the legislative competence of the State Legislature. The Court relied on the legislative Lists of the Constitution and the Government of India Act, 1935 to arrive at this conclusion. 3. The Court held that Section 14(1) (f) of the Town Areas Act, 1914 is not unconstitutional. The Court relied on the legislative history of the provision, the language and context of the provision, and the principles of constitutional construction to arrive at this conclusion.
Final Decision: The Court allowed the appeal, set aside the judgment of the learned Single Judge, and dismissed the writ petition of the respondent with costs.
DWIVEDI, J.:- This appeal is filed against the judgment of a learned Single Judge allowing the writ petition of the respondent. The Bench of two Judges, by whom the appeal was at first heard, referred it to a larger Bench on account of a conflict between two Full Bench decisions. Hence the appeal is listed before us.
2. The Notified Area Committee of Mohammadabad, the first appellant, assessed the respondent with a tax of Rupees 281.25 on his circumstances and property. Rs. 250/- was the amount of tax on circumstances, and Rs. 31.25 on property. Annexure B to the writ petition suggests that he was carrying on some business and had a house. The tax was assessed on March 18, 1968. This assessment was quashed by the learned Single Judge.
3. Far back in 1872, Mohammadabad became a town area. Town areas are now governed by the Town Areas Act, 1914.
Section 14 of this Act provided for the imposition of certain taxes including a tax on a man's circumstances till a part of the year 1948. In that year Section 14 was reshaped. The substituted section materially read:
"(1) Subject to any general rules or special orders of the Local Government in this behalf, the taxes which a committee may impose are the following:
(a) A tax upon rent payable under the provisions of the United Provinces Tenancy Act, 1939,.............
(b) A tax upon rent received by proprietors or under-proprietors on account of land as defined in S. 3 of the United Provinces Tenancy Act, 1939, ...............
(c) A tax upon the assessed rental value of sir and khudkasht land...............
(d) A tax on trades, callings or professions..................
(e) A tax upon a building payable by the owner..............."
4. It may be noted that the substituted enactment omitted the tax on a man's circumstances. So the State Legislature passed an amending Act (Act No. 23 of 1950) in July, 1950. Section 3 of this Act added Cl. (f) to Section 14 in these terms:
"A tax on persons assessed according to their circumstances and property .........
Provided that such a person is not already assessed under Cls. (a) to (e) above."
5. Section 5 of the amending Act added Cl. (ee) to Section 39(2) for enabling the State Government to make a rule fixing the rate of the ''circumstances and property tax.'' In the exercise of this power the State Government issued a notification on July 20, 1950 fixing the rate of the tax. Clause 3(4) of the notification fixed a ceiling of Rs. 250/- on the rate of tax on circumstances; Cl. 4 fixed a ceiling of Rs. 2,000/- on the rate of tax on circumstances and property. The Mohammadabad Town Area imposed and levied this tax in accordance with this notification.
6. On November 23, 1962 the State Government issued a notification under Section 3(1) (d) of the Town Areas Act cancelling the notification which declared Mohammadabad as a Town Area in 1872. The cancellation was made effective from December 1, 1962.
7. On November 23, 1962 the State Government also issued another notification. By this notification under Sec. 337 (1) of the Municipalities Act the State Government constituted the Notified Area of Mohammadabad with effect from December 1, 1962.
8. On March 18, 1968, the Notified Area assessed the 'circumstance and property tax' on the respondent. The quantum of the tax has already been mentioned earlier.
9. Seventeen days before the assessment, that is, on March 1, 1968, the State Government applied Section 333-A of the Municipalities Act to all Notified Areas.
10. Sri Ansari has raised a preliminary objection. It is said that no appeal lies from the judgment of a single Judge in a writ petition filed under Art. 226 of the Constitution.
11. In the former High Court of Allahabad, upto July 25, 1948, an appeal from the judgment of a single Judge passed in the exercise of original civil jurisdiction lay to a Division Bench under Cl. 10 of the Letters Patent. On July 26, 1948 the said High Court and the Chief Court of Oudh were amalgamated and a new High Court was cons
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