M.N.Shukla, J. - (1.) This is a writ petition under Article 226 of the Constitution on behalf of the Zila Parishad, Muzaffarnagar praying tor the issue of a writ or direction in the nature of certiorari quashing the order dated 16 6.1973 (Annexure 3 to the writ petition) passed by the Additional Commissioner, Meerut Division, Meerut, respondent no. 1 whereby he set aside, the order of the Tax Officer, Zila Parishad, Muzaffarnagar dated 5.7.1970 assessing M/s Uttar Pradesh steels Ltd, Mu2affamagar, respondent no. 2 to Rs. 2,000 as circumstances and property tax.
(2.) As mentioned above, the respondent no. 2 had been assessed to the aforesaid tax by the Tax Officer, aggrieved by which it preferred an appeal, inter alia on the ground .that the property had suffered depreciation of Rs. 11,41,000 and taking that into account the respondent no. 2 had actually suffered a net loss of a sum of Rs. 8,00,000. This contention found favour with the appellate authority and consequently the order of assessment was annulled. The question, therefore which has arisen in this case as to whether respondent No. 2 was entitled to claim deduction of Rs. 11,41,000 alleged to be the amount of depreciation.
(3.) The legal aspects of Circumstances and Property Tax have been elaborated in a number of judicial decisions. It. was observed by a division Bench of this Court in Western U P. Electric Power and Supply Company Ltd. Etawah v. Town Area Jaswant Nagar and others, AIR 1957, All 433]: "As its very name shows, circumstances and property tax is a composite tax on property and circumstances. The import of the tern 'property, is no doubt very wide and the word would cover all kinds of properties movable and immovable (including lands and buildings) tangible and intangible, cash and investments, capital and assets etc. A tax on property may be assessable, among other things, on its extent, dimensions, value, yield or income." The definition of the term 'circumstances' can also be called from the following observation by Malik, C.J. in District Board of Farrukhabad v. Prag Dutt and others, (AIR 1948 All, 382) : "To my mind, the word means" a man's financial position, his status taken as a whole and includes what may not properly be comprised under the term 'property' and at the same time ought not to escape assessment. Its vernacular equivalent is 'haisiat' In assessing the tax on circumstances, a man's financial status may be judged among other things, by taking into account his income from business." The above view appears to have been approved by the Supreme Court in Ram Narain v. The State of Uttar Pradesh and others others, (AIR 1957 S.C. 18) wherein is was observed: "A tax on circumstances and property is a composite tax and the word 'circumstances' means financial position, his statues as a whole, depending, among other things, on his income from trade or business." Bearing in mind the essential characteristics of Circumstances and Property Tax we may now refer to the relevant provisions of the U. P Kshettra Samiti and Zila Prishads Adhiniyam (U.P. Act No. 33 of 1961). (hereinafter referred to as the Adhiniyam). Section 119 of the same provides for the levy of tax on circumstances and property along the taxes which the Zila Parishad may impose. Section 121 prescribes the conditions and restrictions for tax on circumstances and property. Clause (c) thereof says that the rate of tax shall not exceed three Nava paise in the rupee on the total taxable income. Explanation to Section 121 is significant and provides that for the purpose of this section taxable income means estimated income but shall not include income of the following classes : (i) 'agricultural income' as defined in the Indian Income-tax Act, 1922. (ii) income on which any tax has previously been imposed under Section 128 of the United Provinces Municipalities Act. 1915, by any municipal board or any notified area committee. (iii) income on which any tax has perviously been of sub-section (1) of Section 119; (iv) income on which any tax has previously been imposed under Section 14 of the United Province Town Areas Act, 1914; (v) income on which any tax has previously been imposed by any Nagar Mahapalika under Section 172 of the Uttar Pradesh Nagar Mahapalika Adhiniyam, 1959." The ground, namely, depreciation amount on account of which deduction was claimed by the respondent Company in the instant case does not find place in the aforesaid exceptions enumerated in the Explanation to Section 121. There- fore, according to the statutory provisions which are wholly in conformity with the general concept of circumstances and property Tax taxable income being estimated income 1 e. gross income, the deduction of any such amount as either loss suffered by the assessee or depreciation undergone by the property is ruled out. In fact, the income accruing to the assessee is only one of the actors which are relevant determining this financial status or property. In the case of western U. P. Electric Power and Supply Company Ltd. Etawah (supra) it was observed that general speaking a tax on circumstances and property is a tax on the assessee's financial status as well as on his property and in judging the financial status or property it is possible to take into account the income he receives from his property, trade or business but this is only one of the various considerations that can be kept in view. It is possible for a man to have taxable financial status even if he has no income.;