C N RADHAKRISHNAN NAIR Vs. STATE OF KERALA

JUDGEMENT

(1.) What is 'aggregate income' for the purpose of profession tax under the Kerala Municipality Act, 1994 and whether Deamess Allowance is to be included in calculating the income are the issues to be considered in this Writ Petition. Section 230 of the Kerala Municipality Act, 1994 permits levy of profession tax by a Municipality. Section 245(2) of the Act provides that "a person shall be chargeable under the class appropriate to his aggregate income from all the sources...". Aggregate income is defined under the Explanation to Section 245 which reads as follows :"For the purpose of this Section "aggregate income" shall not include local allowance or allowances for house rent, carriage hire or travelling expenses". The expression 'aggregate income' excluded Dearness Allowance also under the Explanation to the section, originally. But the same was deleted by Act 14 of 1999 with effect from 24.3.1999. Under the Kerala Panchayat Raj Act, 1994, right from the inception, the Dearness Allowance was included while calculating aggregate income for the purpose of profession tax. Thus under the Kerala Panchayat Raj Act, 1994 in rural areas and under the Kerala Municipality Act in urban areas, the aggregate income, for the purpose of calculating profession tax, takes in Dearness Allowance also. The only difference is that the inclusion of Dearness Allowance in the Municipal area is only from 24.3.1999.

(2.) Ext. P1 circular issued by the respondent Corporation is pursuant to the amendment under the Kerala Municipality Act including Dearness Allowance in the calculation of aggregate income. Therefore, there is no merit in the Writ Petition. It is dismissed. It is seen that there is an interim order of stay ever since August, 2000. In order to avoid a heavy burden on the petitioners, it is made clear that the arrears shall be recovered only in five monthly instalments.