Shahi Electricals, Bangalore vs The Professional Tax Officer, IV Circle, Bangalore

The petitioner has called in question the orders dated 16-6-2004 vide Annexures-C1 and C2, by which the petitioner is directed to pay the professional tax on the salaries drawn by the partners.

Sri Nagaraj, learned Counsel appearing on behalf of the petitioner is justified in his submission that the respondent has not at all bestowed his attention to Explanations IV and V to the Schedule attached to the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 (hereinafter referred to as ''the Act'' for short). Explanations IV and V read thus:

"Explanation IV.-No tax shall be levied under this Act on any firm except when it is engaged in any profession, trade or calling specified in Serial Numbers 2(a)(iii), 3(a)(iv), 5(iii), 6(a)(iii), 6(b)(iv), 7(a)(iii), 8, 8(i), 10(iv), 11(i), 11(ii)(b), 11(iii), 13(d), 15(iv), 16, 17, 18(ii), 19(i), 20(b), 21, 22, 27(b), 29(a), 29(b)(i), 31, 32(b), 34, 37, 40, 41(a), 42, 43, 44, 45, 46(d), 47, 49(b), 51(a), 52, 53, 54, 55, 56, 60, 61, 62, 64 and 66 of the Schedule.

Explanation V.-No tax shall be levied under this Act on any partner of a firm, which is engaged in any profession, trade or calling specified in Explanation IV above".

Sri Nagaraj, draws the attention of the Court to the Schedule to the Act, more particularly, to the Explanation IV to contend that the partners are not liable to be taxed if the firm has paid the taxes under the Act and is engaged in any profession, trade or calling specified in Explanation IV above. According to the petitioner, the firm falls under Sl. No. 13(d) of the Schedule and consequently, the partners are not liable to be taxed under the Act, once again.

Per contra, it is contended by Smt. Niloufer Akbar, learned Government Advocate that the partners may also fall under Sl. No. 1 of the Schedule, inasmuch as, admittedly the salary is drawn by them from the firm. Thus, by relying upon Explanation I to the Schedule, she contends that as the partners are covered by more than one entry under the Act, the highest rate of tax specified for those entries shall be applicable.

The question as to what would be the effect of Explanations IV and V is not at all considered by the respondent. The statement of objections filed by the petitioner disclose that the petitioner had raised the said point before the original authority. As the orders in question do not answer to the questions raised by the petitioner, the same are liable to be quashed and the matter has to be remanded to the original authority. Hence, the following order is made:

The orders dated 16-6-2004 vide Annexures-C1 and C2 are quashed. The matter is remanded to the respondent-Professional Tax Officer, Bangalore, for fresh disposal in accordance with law. It is open for the petitioner to file additional statement of objections, if need be.

Writ petition is disposed of accordingly.