Sadananda Pai and Company, Tellicherry vs The Cannanore Municipal Council and Another

M.S. Menon, C.J.—This is a petition by a firm of partners, Messrs N. Sadananda Pai and Company, against the assessment of the firm to profession tax by the Cannanore Municipality in respect of the half-years ended on 30-9-1963, 31-3-1964, 30-9-1964, and 31-3-1965 u/s 110 of the Kerala Municipalities Act, 1960. The submission of the firm is that it has paid profession tax in respect of the four half-years at the maximum rate of Rs. 125/- per half-year to the Tellicherry municipality and that as a result it is not a liable to pay any profession tax to the Cannanore municipality in view of sub-section (4) of Section 110 of the Act. That sub-section reads as follows: Nothing contained in this section shall be deemed to render a person who resides within the local limits of one local authority and exercises his profession, art or calling, or transacts business or holds any appointment within the limits of any other local authority or authorities liable to profession tax for more than the higher of the amounts of the tax leviable by any of the local authorities. In such cases, the Government shall apportion the tax between the local authorities in such manner as they may deem fit and the decision of the Government shall be final.

The contention is that the firm is resident in the Tellicherry municipality, that it carried on business in the Cannanore municipality and hence sub-section (4) of section 110 of the Act is attracted even though it carried on business in the Tellicherry municipality as well. It is common ground that if sub-section (4) of section 110 of the Act does not afford any relief, the profession tax paid to the Tellicherry municipality at the maximum rate of Rs. 125/- per half-year and the profession tax demanded by the Cannanore municipality at the same rate are in conformity with the provisions of Schedule II to the Act. The question for determination, therefore, is whether sub-section (4) of section 110 of the Act is attracted to the facts of the case before us.

A reading of sub-section (1) of section 110 of the Act makes it quite clear that it divides the assessees to profession tax into two categories: companies and persons. The provision as regards companies is that every company which transacts business in a municipality for not less than sixty days in the aggregate in any half-year shall pay a half-yearly tax assessed in accordance with the rules in Schedule II to the Act. The provision as regards persons is that every person who in, any half year-

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

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

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

(b) resides in the municipality 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 assessed in accordance with the rules in Schedule II to the Act.

It is clear from the above that as far as a company is concerned the only requisite for attracting the profession tax is the transaction of a business in a municipality for not less than sixty days in the aggregate in any half-year and that the remaining portion of sub-section (1) as well as sub-section (4) of section 110 of the Act deals only with persons and has nothing to do with companies. The petitioner as already stated, is a firm of partners and comes under the definition of the word "company" given in section 3(9) of the Act. That definition reads as follows: ''company'' means a company as defined in section 3 of the Companies Act, 1956 and includes a foreign company within the meaning of section 591 of that Act, a co-operative society registered or deemed to be registered under the law relating to co-operative societies for the time being in force and a firm or association carrying on business in the State whether incorporated or not and whether its principal place or business is situated in the State or not.

It follows that sub-section (4) of section 110 of the Act has no application to the case before us and that this petition should be dismissed. We do so; but in the circumstances of the case without any order as to costs.