DESAI, C. J. : This appeal has been referred by my brothers Bishambhar Dayal and Seth to a larger bench because they felt that a certain decision of this Court requires reconsideration. It arises out of a suit brought by the respondents against the appellant for a declaration and injunction.

2. The allegations contained in the plaint wore us follows :-

The respondents are permanent residents of places outside the limits of the Town Area of Sirsaganj and are employed as teachers in Intermediate Colleges of Sirsaganj. They temporarily reside within the limits of the Town Area in Sirsaganj in connection with their employment; they do not own any property yielding income or carry on any trade or profession or earn any income within the limits of the Town Area. The Town Area Committee levies Circumstances and Property Tax under Section 14(1)(f) of the Town Areas Act. The two colleges are situated outside the limits of the Town Area. The respondents are not liable to be assessed to the Circumstances and Property Tax but the Committee has assessed tax on them for the assessment year 1954-55 (i.e. financial year 1954-55). The assessment of the tax is illegal and beyond the powers of the Committee; hence they seek the declaration that the assessment of the tax is illegal and beyond the Committee's powers and permanent injunction restraining it from realising the tax from them.

3. Under S. 14(1)(f) a town area committee may impose "a tax on persons assessed according to their circumstances and property . . . . . . .subject to such limitations and restrictions as may be prescribed". The State Government in exercise of the powers conferred under S. 39(1) and (2) (1) made "United Provinces Town Area Circumstances and Properly Tax (Assessment and Collection) Rules" to regulate the imposition, assessment and collection of Circumstances and Property Tax imposed under the Act. Under R. 6 "all the activities of an assesses within the limits of the town area . . and all the immovable property owned by him and situate within the limits of the town area shall be considered in calculating his total assessment". By R. 7 the Committee is required to prepare a list of "all persons within the town area who are liable to pay the tax" and to consider separately "the circumstances and the properly of every person entered in the list and. . . . determine the amount of the tax to which each such person shall be assessed separately for his circumstances and his property". An assessment list is to be prepared showing the name of every person assessed and the amount of tax to which he is assessed; objections are then invited and heard and decided. The list is then made final and submitted for confirmation to the prescribed authority or the District Magistrate. An appeal against the assessment or levy of any tax lies to the prescribed authority or the District Magistrate, vide S. 18. The decision of the appellate authority "shall be final and shall not be called in question in any Court" according to Sub-S. (4) of S. 18. In exercise of the power conferred by S. 39(2)(11) the State Government has made a different set of rules regarding the limitations, restrictions and rate subject to which the circumstances and property tax can be levied by a town area committee. Rule 3(1) of these Rules provides that the tax :

"may be imposed on any person residing or carrying on business within the limits of the town area;

Provided that such person has so resided or carried on business for a total period of at least six months in the year of assessment."

that no tax is to be imposed on any person whose total taxable income is less than Rs. 200 per annum. "Taxable income" means, according to the Explanation attached to the rule, "gross income accruing within the limits of the town area" and the words "carrying on business" mean "carrying on of any trade, profession, calling or other practice or activity which yields. . . income but do not include service under Government o