Satish Chandra, J. - (1.) THE Life Insurance Corporation of India, the Petitioner, challenges the validity of the imposition of Circumstances and Property Tax by the Zila Parishad, Meerut.
(2.) FOR the year 1967 -68, the Corporation on 3 -7 -1967, received a notice from the Zila Parishad, Meerut, intimating that the Parishad proposed to levy Circumstances and Property Tax on it in the sum of Rs. 2,000/ - on an estimated income of Rs. 96,000/ -. A similar notice proposing a tax of Rs. 2,000/ - on an estimated income of Rs. 96,000/ - was received by the Corporation from the Zila Parishad for the year 1968 -69, on 28 -2 -1968. The Corporation filed an objection within the prescribed time, to both the notices, it was stated that the Divisional Office of the Corporation is situate in the town of Meerut, outside the territorial limits of the Zila Parishad. The Corporation carries on business at its Divisional headquarters. The insurance proposals are settled and the premium etc. are received at the Meerut Office. The Corporation does not transact any business in the rural areas of the district of Meerut. It was also urged that the premium charged by the Corporation depends upon mortality interest and the loading required to cover the expenses and safety margins. No profits accrue to the Corporation from the rural areas. Actuarial valuation of the Corporation's income, expenses, assets and liabilities is done every two years at its Head Office at Bombay. Ninety -five per cent of the profits is plied back to the policyholders in the form of bonus and the rest five per cent is returned to the Central Government which is the sole owner of the entire share capital of the Corporation. The assessing officer of the Zila Parishad rejected the objections. He held that the Corporation carries on business within the rural areas of the District of Meerut through agents and inspectors. He estimated that 40 per cent of the Corporation's income accrues in the rural areas. He estimated the income at Rs. 96,000/ and on that basis, imposed the Circumstances and Property Tax of Rs. 2,000/ -. The assessing officer passed two different orders in relation to the two assessment years. Aggrieved, the Corporation filed two appeals before the Commissioner, Meerut Division, Meerut. The Addl. Commissioner disposed of both the appeals by a common judgment. He held that the Corporation's business is conducted by the agents. The Corporation is profited by this business. It is immaterial that the Corporation works through salaried employees or through agents who work on commission. Since the Corporation derives benefits from the business done by the agents, it carries on business within the rural areas of the Meerut District. On these findings, the appeals were dismissed. Aggrieved, the Corporation has approached this Court Under Article 226 of the Constitution.
(3.) SECTION 121 of the UP Kshettra Samities and Zila Parishads Adhiniym (UP Act XXXIII of 1961), 1961 empowers the Zila Parishad to impose the Circumstances and Property Tax. Under Clause (a) thereof, this tax may be imposed on any person residing or carrying on business in the rural areas, provided that such person has so resided or carried on business for a total period of at least six months in the year under assessment. It is common ground that the Corporation is not residing in the rural area. The Petitioner's contention is that it does not carry on business in the rural area and so, the Parishad had no power to impose this tax on it.;