COMMISSIONER CITY CORPORATION Vs. HARIHARA IYER

JUDGEMENT

(1.) THE two references had come to this Court under the trivandrum City Municipal Act, No. IV of 1116, hereafter to be stated as the act, and been referred to the Full Bench, because the two questions arising therein been considered to be of importance, and likely to affect a number of persons. Before answering them it is necessary briefly to state the facts that have brought about the references, and the Sections as well as the Schedule to the Act, whose interpretation would answer the two questions.

(2.) IT appears that one M. K. Harihara Iyer had been assessed for two years to pay the tax on his income from investment by the commissioner of Trivandrum City Corporation under S. 107 of the Act, and the assessee had appealed to the Committee that heard appeals against such assessments. The Committee dismissed the appeals, whereupon appeals were filed before the District Judge, who is vested with the appellate jurisdiction over the appellate orders of the Committee. As there were two assessment orders, two appeals were filed before the District Judge, wherein three objections were taken against the legality of the orders. The first was that the assessments' amount to double taxation, inasmuch as the tax on the property whose incomes were now being charged with the tax appealed against, had already been paid by the appellants. The next was that the section under which the tax was being levied, has authorised taxation on professional incomes alone, and would not extend to earnings from investment. The last objection was that the Schedule to the Act, by which the Corporation has been given the power of fixing the rates for taxation, has graded the incomes into slabs, giving the maximum and minimum rates for each, but no group mentions the income from investment, with the result that the Corporation is excluded from fixing any rate for taxing incomes from investment. Out of the three objections, the first two were rejected, and the third upheld, so that the assessments on the appellant's income from investment were vacated and consequently both the appeals were allowed. Thereafter applications were filed for references to this Court, under R. 26 framed under the Act, and two questions have been accordingly referred. They are slightly different from those sent to this Full Bench; but I do not think the verbal differences affect the substance which they are intended to cover. I would, therefore, treat the questions sent to this Full Bench as being those referred to this Court, so that our answering the former would be the orders in the references made under the rule. These questions read as follows: [1] Whether rent derived from buildings is "income from investment" for purpose of assessment of profession tax under S. 107 [1] [b] of the City Municipal Act, IV of 1116 (Travancore)?" [2] "whether the rules in Schedule II of the Act permit levy of profession tax on such income?

(3.) THE learned Advocate for the Trivandrum Corporation has argued that S. 107 (1) is complete in that the sub-section contains the charging as well as the quantification provisions under the Act, and the schedule contains the machinery for working out the liability. He has further urged that the subsection and the Schedule are not in conflict, as the several classes in the Schedule are the slabs, and the persons given in the classes are mere description of the incomes on which the corporation should fix the rates. THE last part of the argument is that, should I hold the Schedule to be in conflict with the main sub-section, the Act should prevail, and, the omission to mention investment incomes in the Schedule would not be fatal to the legality of the tax.