KERALA STATE ELECTRICITY BOARD Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner is this case is the Kerala State electricity Board. THE first respondent is the State of Kerala and the 2nd and 3rd respondents are the Chittoor-Thattamangalam Municipality and its Commissioner. THE petitioner challenges the levy of profession tax by the 3rd respondent as being in excess of the limit prescribed by Art. 276 (2) of the constitution. THE petitioner was served with Ext. P1 notice to pay a total amount of Rs. 1470. 50 as profession tax for the years 1971-72,1972-73 and 1973-74. THE petitioner replied by Ext. P-2 requesting the 3rd respondent to reduce the levy of profession tax to Rs 250/- per annum in conformity with art. 276 (2) of the Constitution. This request was rejected by Ext. P-3. Hence this writ petition.

(2.) THE petitioner raised two points in challenge of the levy. THE first ground taken is that the Electricity Board is a statutory corporation, which is neither a company nor a person as contemplated in the kerala Municipalities Act, 190. Levy of profession tax is provided in S. 110 of the act. THE said section authorises levy of profession tax only to companies and persons and not on statutory corporations like the petitioner. Hence it is contended that Ext. P1 notice is illegal and without jurisdiction. THE 2nd point urged is that the proviso to Art. 276 (2) of the Constitution does not apply in this case. THE argument runs thus: THE maximum limit of profession tax provided in Art. 276 (2) of the Constitution is Rs. 250/ -. THE proviso to the said Article, enables a Municipality, to continue to levy a higher tax if in the financial year preceding the commencement of the Constitution such a municipality was levying profession tax at a rate in excess of the limit of Rs. 250/- per annum. THE 2nd respondent-Municipality was created by the Kerala Municipalities act of 1960. THEre cannot be any levy of profession tax prior to the commencement of the Constitution. THErefore, the Electricity Board cannot be mulcted with a liability above the limit fixed by Art. 276 (2 ). Differently put, the argument is that no Legislature has power to pass any law authorising the levy or collection of profession tax beyond the constitutional limit of Rs. 250 per annum after the commencement of the Constitution.

(3.) THE second contention also must fail. THE 2nd respondent-Municipality was originally constituted under and governed by the cochin Municipal Act, Act 18 of 1113, hereinafter referred to as the 1113 Act. Under the 1113 Act, the municipality has been levying half-yearly profession tax above Rs. 250 per annum. THE rates then prevalent continued till the commencement of the Kerala Municipalities Act, 1960, hereinafter referred to as the 1960 Act. Even after the coming into force of the 1960 Act, the old rates continued. When the Constitution came into force, the 1113 Act was in force. THE repeal of 1113 Act and the coming into force of the 1960 Act does not in any manner restrict the Municipality's right from levying profession tax above the Rs. 250/- limit.