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Judgment
I.D. Dua, J.—This is a plaintiffs'' second appeal and is directed against the judgment and decree of the learned Senior Subordinate judge, Ferozepore, allowing the defendant''s appeal and after reversing the decree of the Court of first instance dismissing the plaintiffs'' suit.
About 90 plaintiffs instituted the suit out of which this appeal has arisen against the Municipal Committee, Tankarrwalli, Ferozepur, challenging the notification No. 71-C/45/11687 dated 3-3-1945 imposing profession tax at the rate of Rs. 25/- per annum on plaintiffs Nos. 1 to 54 and at the rate of Rs. 15/- per annum on plaintiffs Nos. 55 to 90 (Exhibit as P-9). This notification was described to be illegal, void, ''ultra vires'' and oppressive and against Article 14 of the Constitution of India. The learned Subordinate Judge by his judgment dated 27-5-1958 held that the notification offended Article 14 of the Constitution and on this conclusion struck it down as unconstitutional.
On appeal, the learned Senior Subordinate Judge disagreed with this conclusion and allowing the appeal dismissed the plaintiffs'' suit. The short question in this appeal, therefore, is whether the profession tax imposed by this notification is violative of Article 14 of the Constitution.
The impugned notification reads thus:
Local Government Department,
Notified Areas,
The 3rd March, 1945.
No. 71-C/45/11687 -- In exercise of the powers conferred by Clause (a) of Sub-section (1) of Section 242 of the Punjab Municipal Act, 1911, the Governor of the Punjab is pleased to impose in the Notified Area of Tankanwali, IN the Ferozepur District with effect from the 1st April, 1945, the Tax described below:
DESCRIPTION OF TAX
A tax at the rate shown in column 3 of the schedule here below on the persons carrying on the trade, or following the profession or calling shown in column 2 thereof, provided that:
(a) the tax shall not be payable by persons in Govt service or in that of a local authority and
(b) the tax shall be recoverable in the month of April every year.
S. No.
Trade, profession or calling
Amount of tax payable per anum Rs. A . P .
1.
Grain, cloth, oil, ghee, sugar gur, shaker, atta, or meat sellers, owner of a flour milt, matches depot, or tea depot, hotel keeper, confectioner. Bhusa seller, cigarettes and pan seller, firewood, coal, charcoal or milk seller, soap maker, cycle dealer, butcher, sheep or goat seller, iron merchant, tobacco seller, dea term matches, kerosene oil or petrol, owner of bricJc kiln, bone seller, leather merchant, or owner of a dairy.
Rs. 25-0.0
2.
Persons piactising aoy pro-fession or carrying any trade or calling not specified in this schedule;
Rs. 15-9-0
Now, this imposition was made by virtue of the power conferred on the State Government u/s 242 of the Punjab Municipal Act. Compliance with the provision of this section has not been challenged. The only attack is'' that the classification contained in tha two categories is arbitrary anil, therefore, hit by the fundamental right of equality before the law or the equal protection of the laws guaranteed by Article 14 of the Constitution. Reliance in support of this attack has been placed on a decision of the Supreme Court and a Bench decision of this Court. The Supreme Court decision relied on is Mohd. Hanif Quareshi and Others Vs. The State of Bihar, where it is laid down that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and that such different must have a rational relation to the object sough to be received by the statute in question.
The Bench decision of this Court relied upon is District Board Ferozepore y. Or. Khan Chand Regular Second Appeal No. 614 of 1955 decided by Gosain and Graver JJ. on 17-12-1958 (Punj) on the case having been referred to a larger Bench by Bishan Narain J. In that case also, a notification imposing a tax u/s 31 (6) of the Puniab District Boards Act was assailed on the ground of offending the equal protection of laws rule contained in Article 14 of the Constitution. The validity of the notification was upheld, but the learned counsel for the petitioner has submitted that in the notification before the Division Bench there was a scale fixed determining the rate of yearly tax, on persons varying with their income. There being no such scale in the instant case, it is argued that the Bench decision is distinguishable. Emphasis has also been laid on the submission that the Division Bench there referred to a number of American decisions and that the principal ground on which the notification there was held to be constitutional was the existence of a scale fixed therein.
On behalf of the responded, however, it has been argued that it is not necessary to fix any scale for the purposes of imposing a profession tax in order to avoid the challenge on the basis of Article 14 of the Constitution. In support of this contention, Shri Gandhi has referred to the following decisions of the Supreme Court:
Ameerunnissa Begum and Others Vs. Mahboob Begum and Others, , Harman Singh and Others Vs. Regional Transport Authority, Calcutta and Others, The State of Rajasthan Vs. Rao Manohar Singhji, , Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, , The Western India Theatres Ltd. Vs. The Cantonment Board, Poona, Cantonment, and Kunnathat Thathunni Moopil Nair Vs. The State of Kerala and Another, .
Article 14, as I read it, does not lay down any absolute equality of men which is perhaps a physical impossibility, and all legislative differentiation is in my view, not necessarily discriminatory. Legislature must, when dealing with the complex problems which arise out of an infinite variety of human relations, proceed upon some sort of selection or classification of persons upon whom the legislation is to operate. The equality clause contained in Article 14 does not, therefore, forbid reasonable classification for the purposes of legislation, and to pass the test of permissible classification it is now well settled that two conditions, are required to be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguish persons or things that are grouped together from those left out and (ii) that the differentia must have a reasonable or rational relation to the statutory object sought to be achieved. This article only requires nexus between the basis of classification and the legislative object. It would thus not hit imposition of profession tax on a uniform basis on classified professions when this classification is not consciously discriminatory. In the case in hand, a classification profession-wise does not appear to me io discriminate arbitrarily either in favour Of or against any one, so as to offend the principle just stated.
Shri Seth has strenuously contended that classification profession wise is unjust and inequitable because persons engaged in same business or profession may be -- and generally are -- not equally prosperous and, therefore, to bracket them together amounts to unconstitutional discrimination. By way of illustration the financial inequality between a big flour mill-owner and an average cigarette and pan seller has been pointed out. I agree that the financial capacity of all the persons engaged in different trades, professions or calling may, even in the same trade, profession or calling may not be equal, but that, in view, is not the test for considering the constitutionality of the imposition in hand, from the point of view of Article 14. The principle underlying legislation imposing tax on trades, professions and callings is not based on the relative financial capacity or the income of the person to be taxed. It is the nature of the profession etc., broadly considered, which provides the determining factor. The very fact that the maximum amount of lax per annum is Rs. 25/- only and professions and callings subject to the imposition are classified in only two categories (the higher category liable to pay Rs. 25/-per annum and the rest Rs. 15/- per annum) clearly shows that the actual income is not the crucial intended test laid by the law giver.
The actual income test may more apply to Income Tax laws than to the profession tax laws. The tax in hand appears to me to be intended to secure reasonable revenue for the local body for its administration which is perhaps necessary in the interest of our democratic society. The classification made in the impugned notification would thus seem to be based on an intelligible principle having a reasonable relation to the subject of providing revenue for the local self-Government administration by imposing a modest amount of tax on trades, professions or callings. I am thus of the view that merely because certain persons broadly fading in one of the groups in the notification in question are otherwise financially unequal does not attract the challenge on the basis of Article 14. It may also be pointed out that this Article prohibits a conscious discrimination and not a hardship which may ensue from the working of a tax measure which is otherwise within the constitutional competence of the law giver. Nothing has been shown in the case in hand disclosing any conscious discrimination considered in the background of the object of imposing professional tax. The observations in the unreported case of Dr. Khan Chand Regular Second Appeal No, 614 of 1955, D/ 17-12-1958 (Punj) do not lay down a different rule of law.
For the foregoing reasons, this appeal fails and is hereby dismissed but without costs in this Court.