TaxTMI 
TaxTMI 
1960 (2) TMI 53
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....tion, allowances etc. The Government of the State of Madhya Pradesh by its order dated October 23, 1956, referred the said disputes under s. 39 of the Act to the State Industrial Court, Nagpur and the reference was numbered as Industrial Reference No. 18 of 1956. The appellant filed a statement before the Industrial Court questioning the jurisdiction of that Court, inter alia, on the ground that the Corporation was not an industry as defined by the Act. On February 13, 1957, the Industrial Court made a preliminary order holding that the Corporation was an industry and that the further question whether any department of the Corporation was an industry or not, would be decided on the evidence. The appellant challenged the correctness of that order by filing a petition under Art. 226 of the Constitution in the High Court of Bombay at Nagpur, but that petition was dismissed, as the award was made before its hearing. On June 3, 1957, the Industrial Court made an award holding that the Corporation was an industry and further that all departments of the Corporation were covered by the said definition. It also revised the pay scales of the employees and accepted the major demands made by t....
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....ndustrial Reference No. 1 of 1957, the Industrial Court heard both the references together and, by consent, the evidence in Reference No. 18 of 1956 was treated as evidence in Reference No. 1 of 1957. On December 14, 1957, an award was made in Reference No. 1 of 1957 and it was based on the findings in the award made in Reference No. 18 of 1956. The Industrial Court held that the Fire Brigade ]Department was an industry within the meaning of the Act and, on that basis, gave the necessary reliefs to the employees. Mr. Aggarwala, learned counsel appearing for the appellant in the first two appeals, raised before us the following points: (1) No service rendered by the Corporation would be an industry as defined by s. 2(14) of the Act. (2) Assuming that some of the services of the Corporation are comprehended by the definition of " industry " in the Act, the said services, in order to satisfy the definition, must 'be analogous to a business or trade. (3) Even otherwise, the activities of the Corporation to be called industry must partake the common characteristics of an industry. (4) The, finding of the Industrial Court holding that the various departments of the Corporat....
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....Municipality and its employees an industrial dispute. Bonus was refused on other grounds and we are not concerned with that aspect of the case here. These two cases, therefore, have finally and authoritatively held that municipal undertakings could be " industry " within the meaning of the Industrial Disputes Act. A faint argument is attempted to sustain a distinction between the definition of an "industry" in the Industrial Disputes Act and the definition of the same word in the Act in question. Section 2(j) of the Industrial Disputes Act defines " industry " to mean any business, trade, undertaking, manufacture or calling of employers and to include any calling service, employment, handicraft, or industrial occupation or avocation of workmen ". Section 2(14) of the Act divides the definition into three parts, namely, " (a) any business, trade, manufacturing or mining undertaking or calling of employers, (b) any calling, service, employment, handicraft or industrial occupation or avocation of employees, and (c) any branch of an industry or a group of industries." A comparative study of these two sections brings out the following diff....
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....this aspect in State of Bombay v. The Hospital Maazdoor Sabha [1960] 2 S.C.R. 866. in the context of the definition of " industry " in the Industrial Disputes Act and formulated certain broad principles. But as this case is concerned with the definition of "industry" in a different Act, we shall briefly resurvey the law on the subject with specific reference to a corporation. Let us scrutinize the definition of " industry " to ascertain whether all or some of the conditions are implicit in the definition and whether the said conditions constitute the necessary basis for it. The true meaning of the section must be gathered from the expressed intention of the Legislature. Maxwell in his book "On the Interpretation of Statutes", 10th Edn., rightly points out at p. 2 that " If the words of the statute are in themselves precise and unambiguous no more is necessary than to expound those, words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature ". The words used in the section are clear and unambiguous and they prima facie are of the widest import. We have pointed out tha....
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....t be invoked in cases where the intention of the Legislature is clear and free of ambiguity. The phraseology used in the section is very clear and it is not susceptible of any ambiguity. The words used in the first part of cl. (b) are unqualified; and the qualification is introduced only in the later part. If the words " calling, service, employment, handicraft " are really intended to be qualified by the adjective " industrial ", one should expect the Legislature to affix the adjective to the first word " calling " rather than to the last word " occupations." The inclusive definition is a wellrecognized device to enlarge the meaning of the word defined, and, therefore, the word , "industry " must be construed as comprehending not only such things as it signifies according to its natural import but also those things the definition declares that it should include: see Stroud's Judicial Dictionary, Vol. 2, p. 1416. So construed, every calling, service, employment of an employee or any business, trade or calling of an employer will be an industry. But such a wide meaning appears to overreach the objects for which the Act was passed....
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....the primary and inalienable functions of a constitutional government ". It is said that in a modern State the sovereign power extends to all the statutory functions of the State except to the business of trading and industrial transactions undertaken by it in its quasi- private personality. Sustenance for this contention is sought to be drawn from Holland's Jurisprudence, wherein the learned author divides the general heading "Public Law " into four sab-heads and under the sub-head "Administrative Law " he deals with a variety of topics including welfare and social activities of a State. The treatment of the subject " Public Law " by Holland and other authors, in our view, has no relevancy in appreciating the scope of the concept of regal powers-which have acquired a definite connotation. Lord Watson, in Coomber v. Justices of Berks (1883-84) 9 App. Cas, 61, 74, describes the functions such as administration of justice, maintenance of order and repression of crime, as among the primary and inalienable functions of a constitutional Government. Isaacs, J., in his dissenting judgment in The Federated State School Teachers' Association of the ....
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....ntity or juristic person. In the latter character it stands for the community in the administration of local affairs wholly beyond the sphere of the public purposes for which its governmental powers are conferred. " Isaacs and Rich, JJ., in The Federated Municipal and Shire Council Employees' Union of Australia v. Melbourne Corporation or (1918-19),26 C.L.R. 508, 530-531 in the context of the dual functions of State say much to the same effect at p. 530: " Here we have the discrimen of Crown exemption. If a municipality either is legally empowered to perform and does perform any function whatever for the Crown.,. is lawfully empowered to perform and does perform any function which constitutionally is inalienably a Crown function-as, for instance, the administration of justice the municipality is in law presumed to represent the Crown, and the exemption applies. Otherwise, it is outside that exemption, and, if impliedly exempted at all, some other principle must be resorted to. The making and maintenance of streets in the municipality is not within either proposition." A corporation may, therefore, discharge a dual function : it may be statutorily entrusted with....
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....gh the word "undertaking" in the definition of "industry" is wedged in between business and trade on the one hand and manufacture on the other, and though therefore it might mean only a business or trade undertaking, still it must be remembered that if that were so, there wag no need to use the word separately from business or trade. The wider import is attracted even more clearly when we look at the latter part of the definition which refers to "calling, service, employment, or industrial occupation or avocation of workmen." "Undertaking" in the first part of the definition and "industrial occupation. or avocation" in the second part obviously mean much more than what is ordinarily understood by trade or business. The definition was apparently-intended to include within its scope what might Dot strictly be called a trade or business venture." This passage leaves no room for doubt that this Court construed the terms of the definition of "industry" in a way which takes in activities which are not strictly called trade or business. Therefore the words "not strictly be called a trade or business venture" and th....
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.... streets. The learned Judges discussed at length the meaning of the word "industrial dispute" in s. 51 (XXXV) ofthe Constitution of Australia. It is manifest from this decision that even activities of a municipality which cannot be described as trading activities can be the subject-matter of an industrial dispute. Isaacs, J.,in his dissenting judgment in The Federated State School Teachers' Association of Australia v. The State of Victoria (1929) 41 C.L.R. 569, has concisely expressed this idea at p. 587 thus: "The material question is: What is the nature of the actual function assumed is it a service that the State could have left to private enterprise, and, if so fulfilled, could such a depute be "industrial" ?" This test steers clear of the argument that to be an industry the activity shall be a trading activity. If a service performed by an individual is an industry, it will continue to be so notwithstanding the fact that it is undertaken by a corporation. Another test suggested by the learned counsel may be scrutinized. It is said that unless there is a quid pro quo for the service, it cannot be an industry. This is the same argument, namely,....
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....re in a greater degree. All industrial enterprises contribute more or less to the general welfare of the community, and this is a most material consideration when we come to determine the present question apart from the particular contention raised at the Bar. Monetary considerations for service is, therefore, not an essential characteristic of industry in a modern State. The learned counsel then sought to demarcate the activities of a municipality into three categories, namely, (i) the activities of the department which performs the services; (ii) those of the department which only impose taxes, collect them and administer them; and (iii) those of the departments which are purely in administrative charge of other departments. We do not see any justification for this artificial division of municipal activities. Barring the regal functions of a municipality, if such other activities of it, if undertaken by an individual, would be industry; then they would equally be industry in the hands of a municipality. It would be unrealistic to draw a line between a department doing a service and a department controlling or feeding it. Supervision and actual ,performance of service are integ....
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....thus: (1) The definition of " industry " in the Act is very comprehensive, It is in two parts: one part defines it from the standpoint of the employer and the other from the standpoint of the employee. If an activity falls under either part of the definition, it will be an industry within the meaning of the Act. (2) The history of industrial disputes and the legisla- tion recognizes the basic concept that the activity shall be an organized one and not that which pertains to private or personal employment. (3) The regal functions described as primary and inalienable functions of State though statutorily delegated to corporation are necessarily excluded from the purview of the definition. Such regal functions shall be confined to legislative power, administration of law and judicial power. (4) If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation. (5) If a service rendered by a corporation is an industry, the employees in the departments connected with that service, whether financial administrative or executive, would be entitled to the benefits of the Act. (6) If a department of a mu....
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.... the said Part prescribes the procedure for the conduct of business of the Corporation. Chapter IV thereof provides for the appointment of municipal officers and servants and for their punishment and removal. Chapter V deals with powers, duties and functions of the municipal authorities; it gives the obligatory and discretionary duties of the Corporation. Under s. 57, the Corporation shall make adequate provision, by any means or measures which it may lawfully use or take, such as for lighting public streets, cleaning of public streets,disposal of nightsoil and rubbish, maintenance of firebrigade and other welfare activities in the interest of the public. Section 58 confers a discretionary power on the Corporation to provide for other amenities not covered by s. 57, and which are comparatively not absolutely essential but are necessary for the happiness of the people of the State. Provisions of Ch. VI enable the municipality to hold and acquire properties, to manage public institutions maintained out of municipal funds. Section 79 enjoins on the municipality to apply the fund available with it to discharge its statutory duties and pay salaries and allowances of its various servants....
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....roperty taxes. No separate staff has been employed for the assessment and levy of property taxes: the same staff does the work connected with assessment and collection of water rates as well as scavenging taxes. It is not disputed that the work of assessment and levy of water rate and scavenging rate for private latrines is far heavier than the other works entrusted to this department. No attempt has been made to allocate specific proportion of the staff for different functions. We, therefore, must accept the finding of the State Industrial Court that the staff of this department doing clerical or manual work predominantly does the work connected with scavening taxes and water rate. The said rates are really intended as fees for the service rendered. The services, namely, scavenging and supply of water, can equally be undertaken by a private firm or an individual for remuneration and the fact that the munici- pality does the same duty does not make it any the less a service coming under the definition of "industry". We would, however, prefer to sustain the finding on a broader basis. There cannot be a distinction between property tax and other taxes collected by the munic....
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....ation Act powers are conferred on specified officers to remove or order the removal of any person who interferes with or impedes the operation for extinguishing the fire, to close any street or passage in or near which any fire is burning, to break into or pull down or use for the passage of hoses or other appliances, any premises for the purpose of extinguishing the fire and generally to take such measures as may appear necessary for the preservation of life or property, and that the services of the firebrigade cannot be satisfactorily rendered without such powers and that no private individual can perform the same. Here 'the argument tends to be fallacious as it ignores the distinction between he services and the statutory powers conferred to satisfactorily discharge the said services. A private person or a firm can equally do the same services and nothing prevents the legislature from conferring similar powers on an individual or a firm. These services also satisfy all the tests laid down by us and therefore we hold that this department is also an industry. (iv) Lighting Department: Lighting Department looks after the arrangements for lighting the streets in the Corporatio....
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....). As we are of the view that the departments subordinate to this department come under the definition of "industry", this department, which has administrative control Over those subordinate departments, must be considered a part of those departments. If so, it follows that this department is also an industry. (vii) Enforcement (encroachment) Department: The function of this department is to remove encroachment and unauthorised constructions and dilapidated houses. This department is a section of the Estate Department. (See the evidence of Witness No. 5 for Party No. 1). It is contended that the functions of this department are all statutory and that no private individual can perform them. Statutory powers are conferred on the Corporation to remove encroachment and unauthorised construction and dilapidated houses. These powers are necessary for the Corporation to protect its properties and to prevent encroachment thereon and to remove dilapidated houses in the interest of the public. But if a distinction is made between the powers and the nature of the services rendered, it would be obvious that the services rendered are not peculiar to a corporation. A private firm may....
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....ublic dispensaries. Private institutions can also render these services. It is said that the control of food the adulteration and the control of epidemics cannot be done by private individuals and institutions. We do not see why. There can be private medical units to help in the control of food adulteration and in the control of epidemics for remuneration. Individuals may get the food articles purchased by them examined by the medical unit and take necessary action against guilty merchants. So too, they can take advantage of such a unit to prevent epidemics by having necessary inoculations and advice. This department also satisfies the other tests laid down by us, and is an industry within the meaning of the definition of "industry" in the Act. (x) Market Department: The function of the Market Department is to issue licences, collect ground-rent and registration fee and to detect short weights and measures. Rents are collected for permitting persons to enter the Corporation land and transact business thereon. Detection of short weights and measures is a service to the people to prevent their being cheated in the market. The setting apart of market places, supervision of....
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....to the assessment of taxes so-called and that of fees and rates. The taxes are collected only for enabling the Corporation to render service to the public and, as most of the services come under the definition of "industry", this department also, in our view, is an industry within the meaning of the Act. That apart, the State Industrial Court has held that the same staff does the work of assessment of house-tax as well as other fees and rates and the work of this department is predominantly connected with the assessment of scavenging tax and water rate. Applying the test of "paramount and predominant duty ", this department falls within the definition of " industry " in the Act. (xiv) Estate Department : This department maintains the record of property acquired, vested or transferred to the Corporation and all buildings and roads constructed by the P.W.D. This department lets out lands and houses belonging to the Corporation by public auction and gets income therefrom, which no doubt is credited to the common fund. A department like this is equally necessary in a private company which carries out functions similar to the Corporation. Maintenance of r....