TaxTMI 
TaxTMI 
1956 (9) TMI 54
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....tawah and. Mainpuri, and the town of Karhal falls on the route between Etawah and Mainpuri. . It is not now disputed that passengers travelling in the appellant's bus used to get down or get in at a bus stand within the town area of Karhal; the appellant had a booking office situate within the Town Area and tickets were issued to passengers and an account of the business was maintained in the said booking office. The Town Area Committee of Karhal imposed a tax of Rs. 25 on the appellant for the year 1950-51 under the provisions of clause (f) of sub-section (1) of section 14 of the Act, being a tax on 'circumstances and property' and assessing the income of the appellant from his business within the Town Area of Karhal at a sum of Rs. 800 for the year. The appellant preferred an appeal against the assessment of the tax under section 18 of the Act, and the grounds taken by the appellant were (1) that he did not reside within the limits of the Town Area and (2) that he did not carry on any trade or business within that Area. By his order dated the 20th October 1951' the Appeal Officer held that the appellant carried on his trade or business within the limits of the Town Area and was t....
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....t Magistrate and has to be submitted to him for confirmation. When so confirmed., the list can only be altered under subsection (2) of section 15 by the District Magistrate or in pursuance of an order passed in appeal under the provisions of section 18. We think that learned counsel has rightly submitted that, so far as the present appellant is concerned, the list prepared under section 15 must have shown him as assessed to a certain amount of tax under clause (f) of sub-section (1) of section 14 and the assessment must have been confirmed on that basis by the District Magistrate. Therefore, the legality of the tax imposed on the appellant must be considered with reference to the clause under which the assessment was actually made, and a different clause under which the assessment might have fallen cannot be called in aid of the assessment. We proceed therefore to consider the legality of the tax imposed on the appellant with reference to clause (f) of sub-section (1) of section 14 of the Act. The short point for consideration in that context is whether residence within the Town Area is a necessary condition for the imposition of the tax under clause (f). It is necessary -to rea....
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....nt of tax assessed on any person shall not, in any year, exceed a sum of s. 250. Explanation.-(1) For purposes of this rule 'taxable income' means gross income accruing within the limits of the town area. (ii) The words 'carrying on business' mean the carrying on of any trade, profession, calling or other practice or activity which yields or is capable of yielding income but do not include service under Government or a local body". The important point which emerges out of these Rules is that under Rule 3 the tax assessed on the circumstances of an assessee may be imposed on any person residing or carrying on business within the limits of the town area; in other words, two, conditions in the alternative are laid down in Rule 3, either the person must reside within the limits of the town area or he must be carrying on business within the limits of the said area. There is a third condition that the residence or carrying on of business must be for a total period of at least six months in the year of assessment. No question regarding the third condition has been raised in this case and it is not necessary to consider that condition here. Therefore, it is clear that if Rule 3 is va....
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....less in so far as it envisages an overlapping between clause (d) and clause (f) in other cases. On a proper construction of clause (f), read with the limitations and restrictions embodied in the Rules made under section 39 of the Act, it cannot be held that residence within the Town Area of Karbal was a necessary condition for the imposition of the tax on the appellant. A reference, was made to sub.;section (4) of section 15-A of the Act. Section 15-A provides for preliminary proposals for the imposition of taxes under section 14, publication of such proposals and the submission of draft rules. Subsection (4) states: "(4) Any, inhabitant of the Town Area may, in the prescribed manner, file an objection in writing on such proposals and the committee shall take into consideration the objections so filed and finally settle its proposals." Under sub-section (4) any inhabitant of the Town Area may file an objection to the preliminary proposals for the imposition of taxes under section 14. The argument before us was that if an inhabitant of the Town Area alone was entitled to file an objection to preliminary proposals for taxation, then in all the, clauses of sub-section (1) of ....
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.... as to make them liable for the. tax. The finding Was that they did not reside within the rural area and therefore the imposition of the tax was illegal, and section 131 of the U. P. District Boards Act did not bar the suit. This decision does not help the appellant. If it shows anything, it shows that it was open to the District Board to impose a circumstances and property' tax on any person residing or carrying on business in the rural area. In the 1948 Allahabad decision, the main question was whether the provisions of section 2, Professions Tax Limitation Act (20 of 1941) affected the powers conferred upon the District Board by section 108 of the U.P. District Boards Act to levy a tax on circumstances and property'. A subsidiary question was also raised, whether section 131 of the U. P. District Boards Act barred the suit. With regard to the main question, it was pointed out that the name given to a tax did not matter; what had to be considered was the pith and substance of it. It was held that in pith and substance the tax was one which attracted the provisions of section 2, Professions Tax Limitation Act (20 of 1941). A tax on 'circumstances and property' is a composite ta....