SEETHA RAMA SASTRY J Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) IN all these writ petitions an identical question is involved wherein the petitioners have sought the striking down of item No. 20 of the Schedule to the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 ("the Act" for short), as substituted by the Karnataka Amendment Act No. 15 of 1989.

(2.) FOR the sake of convenience, the facts in the first of these writ petitions are referred to wherever necessary.

(3.) CERTAIN notifications issued under the Act are also necessary to be noted. As per notification No. I dated May 3, 1989, the Government of Karnataka exempted the tax payable by any firm registered under the Indian Partnership Act and engaged in any profession, trade, calling or employment, except those specified in sl. Nos. 5(b), 7(b), 13(a), 15(a), 20C(a) and 20E(b) of the Schedule. There is another Notification, viz., No. II of the same date exempting the tax payable by any partner of a firm registered under the Indian Partnership Act and engaged in any profession, trade, calling or employment specified in sl. Nos. 5(b), 7(b), 13(a), 15(a), 20C(a) and 20E(b). By virtue of the main part of notification No. I, a firm is exempted from taxation; but in the cases falling, for example, under item No. 15(a), that exemption is not available. In other words, in the case of those excepted categories like item No. 15(a), the firm is liable. Notification No. II, in such a situation, grants the exemption to the partners of such a firm. Thus, in the case of the firms whose liability to tax is kept alive by Notification No. I, then its partners are exempted (i.e., those falling under specified items only). The idea is to collect the tax from the firm in one case and exempt its partners. Item 20 is not the subject-matter of specification either under Notification No. I or No. II. Therefore, literally, the partners of a registered firm are liable to tax at the rate of Rs. 500 per annum; but this has to be read, to be in harmony, with the two notifications.