LACHHMAN DAS MAKHAN LAL Vs. STATE OF PUNJAB

JUDGEMENT

(1.) This is a writ petition under Art. 226 of the Constitution directed against the imposition of a tax on commission agents at 5 per cent on their income derived from their business as commission agents. It is not disputed that the permission of the Punjab Government under S. 82 of the Punjab Gram Panchayat Act, 1952 (IV of 1953) had been obtained by the Gram Panchayat of village Machhiwara in Ludhiana district and that such tax can be imposed up to a limit of Rs. 250/- per annum. In this connection, reference may be made to Art. 276 of the Constitution which is in these terms:

(2.) The total amount payable in respect of any one person to the State or to any one Municipality, district, board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees per annum: Provided that if in the financial year immediately, preceding the commencement of this Constitution there was in force in the case of any State or any such municipality, board or authority a tax on professions, trades, callings or employments the rate or the maximum rate, of which exceeded two hundred and fifty rupees per annum, such tax may continue to be levied until provision to the contrary is made by Parliament by law, and any law so made by Parliament may be made either generally or in relation to any specified states, municipalities, boards or authorities.

(3.) The power of the Legislature of a State to make laws as aforesaid with respect to taxes on professions, trades, callings and employment shall be construed as limiting in any way the power of the Parliament to make laws with respect to taxes on income accruing from or arising out of profession, trades, callings and employments." In the present case, the Panchayat has not fixed the maximum limit up to which the tax can be levied. On the basis of percentage fixed the amount of tax may be far in excess of Rs. 250/-, the maximum limit prescribed by Art. 276. In a chart filed by the petitioner (which is at page 29 of the paper-book) the income from commission of Defendants Raj Hukam Chand, Saghru Mal Karam Chand and Ram Parkash Bhushan Lal, exceeds Rs. 10,000/- in each case, and on the basis of the resolution of the Panchayat their liability to pay tax goes beyond the permissible limit of Rs. 250/-. In this situation the question that has to be decided is whether the resolution should be red in conjunction with Article 276 so as to imply that the maximum limit is Rs. 250/- or whether the resolution should be struck down on the ground that it does not lay down the maximum limit in accordance with Art. 276. A similar question came up of reconsideration before the Madhya Bharat High Court in a case reported as Shrikrishna v. Ujjain Municipality, AIR 1953 Madh-B, 145. The learned Chief Justice observed as under: