Decided on April 23,2008



- (1.)THE petitioner which is a bank, through its branch, files this writ petition under Article 226 of the constitution of India, inter alia, seeking writ of mandamus declaring that Section 20 of andhra Pradesh Tax on Profession, Trades, callings and Employments Act, 1987 (for short the 'act') as amended in the year 1996 and explanation 1 of the first schedule to the Act, as ultra vires Article 276 (2) of the Constitution of India, and further to declare the action of the respondent in collecting the profession tax for the years 1995-96 to 2005-2006 from the petitioner, and demanding the interest of Rs. 36,818/-, the alleged arrears of profession tax due for the said years 1995-96 to 2005-2006, by notice Rc. No. PTO/d/613/2005-06, dated 13. 2. 2006 and the payment of profession tax alleged to be due for the current financial year 2006-2007 for the main branch/ extension counters/atms by a notice rc. No. F5/pt/stsy/2006-07, dated 30. 10. 2006 as unconstitutional, illegal and without jurisdiction, and consequently to direct the respondent to refund the amount of rs. 1,12,500/-, paid by the petitioner towards the profession tax as per the said demand vide banker's Cheque No. 724416, dated 31. 10. 2006 for Rs. 1,12,500/ -.
(2.)THE case of the petitioner, in brief, is to the effect that the petitioner is a body corporate, established under the Hyderabad state Bank Act XIX of 1350 Fasli and constituted under the State Bank of hyderabad Act, 79 of 1956 and the State bank of India (Subsidiary Banks) Act No. 38 of 1959, and it has got large number of branches spread throughout the country and the petitioner is one of its branches. While so, the respondent by notice dated 14. 12. 2005 called upon the petitioner to pay a sum of rs. 1,12,500/- towards profession tax arrears under the provisions of the Act in respect of every branch including ATMs and extension Counters as separate assessees for the purpose of levy of profession tax, and as per Entry 18 of the I Schedule to the Act, Banking Companies, as defined under Banking Regulation Act, 1949, have to pay Rs. 2,500/- per annum as individual and separate entities, and therefore every atm and Extension Counter has to pay the said amount per annum. However, it was stated, even though the branch was paying profession tax of the employees regularly every year, profession tax of the bank/atm/ extension counter was not being paid. In the first instance, by bona fide mistake of the liability to pay the said tax in respect of atms and Extension Counters, the petitioner complied the same by paying the amounts vide banker's cheque. Later by a show-cause notice dated 13. 2. 2006, the respondent sought to levy penal interest for the delayed payment of profession tax under Section 11 of the Act, read with Rule 24 of the Rules framed thereunder for the years 1995-96 to 2005-06 as mentioned above and called for the objections to be filed within 7 days therefrom. Accordingly, the petitioner sent a reply on 8. 3. 2006 denying the liability towards the interest and also the payment of any profession tax in respect of the extension Counters and ATMs as they are part of the branch, and therefore they are not separate entities, and thus the question of any liability, separately, does not arise and sought for refund of the amount, which was paid earlier. This was also reiterated through a legal notice issued on behalf of the petitioner through Counsel on 19. 10. 2006. However, the respondent herein issued another notice on 30. 10. 2006 calling upon the petitioner to file the details of Extension counters/atms attached to the petitioner and copies of permission obtained under section 23 of the Banking Regulation Act, 1949 to open the same, and further calling upon the petitioner to pay the profession tax for the current years.
(3.)THE petitioner sought to assail the said demand on the ground that the provisions of the said Act have no application to make an Extension Counter or ATM to fall in line with any individual person so as to make liable for paying the profession tax, and therefore the demand and levy of profession tax on such Extension Counters and ATMs is violative of Article 276 (2) of the constitution of India.

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.