DISTRICT BOARD Vs. UPPER INDIA SUGAR MILLS LTD

JUDGEMENT

(1.) This is a defendant's first appeal arising out of a suit for declaration and injunction. The appellant in this appeal is the District Board of Muzaffarnagar, The suit out of which the present appeal arises was filed on behalf of the Upper India Sugar Mills Limited Khatauli, district Muzaffarnagar, as plaintiff. The plaintiff is limited concern carrying on the business of manufacturing sugar at Khatauli within the rural area of the district of Muzaffarnagar. It appears that the District Board Muzaffarnagar levies a tax on circumstances and properly of all persons residing or carrying on business within its rural area under the provisions of Sections 114 and H08 of the District Boards Act. By Notification No. 1509/IX-242, dated September 25, 1930, the Government have framed a rule authorising the imposition of a tax on circumstances and property by a District Board, provided that the total amount of this tax does not exceed a sum of Rs. 2,000/-. Acting under the said rule, the District Board, Muzaffarnagar, assessed the plaintiff to a tax of Rs. 2,000/- for the years 1942-43, 1943-44 and 1944-45. Rs. 2,000/-. is the maximum amount of tax leviable under the said rule. The taxes for these years were paid by the plaintiff under protest. Subsequently, on the 18th of August, 1945, the plaintiff filed the present suit for declaration and injunction. The case of the plaintiff as set out in the plaint, was that in order to implement the provisions of Section 142 of the Government of India Act, the Central Legislature had passed the Professions Tax Limitation Act (Act No. 20 of 1941). By Section 2 of the said Act the District Board was prohibited from realising any tax on professions, trades, callings or employments exceeding a sum of Rs. 50/- per annum after the commencement of the said Act. The Professions Tax Limitation Act, 1941 (Act No. 20 of 1941) came into force on the 26th November, 1941, The case of the plaintiff was that tax on circumstances and property was virtually a tax on trade and occupation, and was accordingly, hit by the Limitation imposed by Section 2 of the said Act. The plaintiff, accordingly sought a declaration in the present case to the effect that "the defendant is not entitled to charge plaintiff more than Rs. 50/-per annum as circumstances and property tax under Section 144 of the District Boards Act". The Plaintiff further prayed for injunction against the defendant--District Board, Muzaffarnagar--restraining it from realising more than Rs. 50/- as tax in future. The suit was resisted by the District Board, Muzaffarnagar, mainly on the ground that a tax on circumstances and property is not a tax in professions, trades or callings and the provisions of Section 2 of Act 20 of 1941 (The Professions Tax Limitation Act) are not applicable to it.

(2.) The trial court repelled the plea raised on behalf of the defendant holding that a tax on circumstances and property is virtually a tax on trade and occupation. It, accordingly, held that Section 3 of Act 20 of 1941 was applicable to the present case. In this view of the matter, the trial court decreed the plaintiff's suit for declaration and injunction with costs. Dissatisfied with the said judgment, this appeal was filed on behalf of the defendant in this Court

(3.) The judgment in the present case was pronounced on the 5th September, 1946. The appeal against the judgment of the trial court was filed on the 10th December, 1946. It has come up for hearing before us in January, 1957. The learned counsel for the appellant before us has not challenged the correctness of the judgment of the, date when it was pronounced, that is, on the 5th of September, 1946. He has in fact conceded before us that the judgment, as it stood on the date when it was delivered, was quite correct and valid. He has, however, invited our attention to a subsequent amendment of the original Act made by the Professions' Tax Limitation (Amendment and Validation) Act 1949 hereinafter called the "Amending Act" which came into force on the 28th of December, 1949. The effect of Section 3-B of the Amending Act was to exempt from the operation of Section 2 of the original Act a tax on circumstances and property imposed under the District Boards Act, 1922, (U. P. Act X of 1922). Section 3A of the Amending Act provided a similar exemption in respect of a tax on circumstances and property imposed under the U. P. Municipalities Act U. P. Act No. II of 1916). Further, Section 3 of the Amending Act gave retrospective effect to this amendment and provided as follows:--"Notwithstanding anything to the contrary in any other law for the time being in force,-