ZILA PARISHAD, MUZAFFARNAGAR AND ANOTHER Vs. JUGAL KISHORE RAM SWARUP AND ANOTHER

JUDGEMENT

(1.) JUDGEMENT The following question has been referred to this Bench for decision :

(2.) S . 14 of the said Act enumerates the various taxes that may be imposed by a Town Area Committee; and clause (f) of this section relates specifically to the levy of circumstances and property tax. This provision was introduced in the U. P. Town Areas Act by an amending Act (U. P. Act XXIII of 1950), which came into force in July 1950. Such a tax was not being levied by Town Areas before the commencement of the Constitution and consequently cannot be saved by Art. 277. The question therefore arises whether the amendment conferring the power on Town Area Committees to levy this tax was within the legislative competence of the State Legislature. The argument advanced by learned counsel for the appellant in this connection is twofold. Firstly, it is contended that circumstances and property tax is essentially a form of income tax, which is a subject exclusively within the jurisdiction of Parliament, being covered by item no. 82 of List I of the Seventh Schedule of the Constitution. And secondly it is urged that in any case it does not fall under any of the heads enumerated in Lists II or III of the Seventh Schedule and consequently must be deemed to be a matter exclusively within the jurisdiction of Parliament by virtue of item no. 97 of the Union List.

(3.) IT now remains to be seen whether this tax comes under any of the heads mentioned in Lists II and III of the Seventh Schedule. It is clear from its very name that it is a composite tax, made up of two components; a tax on property and a tax on circumstances (which, as interpreted by the Supreme Court in Ram Narains case, AIR 1957 SC 18, means a tax on status or financial position). The tax on property is confined to immovable property and clearly falls within the jurisdiction of the State Legislature by virtue of item no. 49 of the State List, viz. Taxes on lands and buildings. Coming to the tax on circumstances, status or financial position, we note that the Supreme Court, in the case already cited has pointed out that a mans circumstances depend, among other things, on his income from trade or business; and by an obvious analogy they will also depend on the income which he may derive from his profession or employment. That being so, we are forced to conclude that a tax on a mans circumstances means a tax on his trade, business, profession or employment; and such a tax is covered by item no. 60 of the State List, viz. Taxes on professions, trades, callings and employments. Learned counsel for the appellant objects that there is a separate provision for a tax on trades, callings or professions in clause (d) of section 14(1) of the U. P. Town Areas Act, which he argues, must be quite distinct from the tax on persons assessed according to their circumstances and property mentioned in clause (f). But as soon as we read the section as a whole, this objection is found to be without substance. The section, in so far as it is relevant for the purposes of this case, runs as follows :-