BOMBAY COMPANY LTD Vs. MUNICIPAL COUNCIL

JUDGEMENT

(1.) The defendant, the Municipal Council of Dindigul purporting to act under Section. 92 of the Madras District Municipalities Act, 1920, and r. 16 of Sch. IV to that Act has assessed the plaintiff Company to Companies tax for the half years ending the 30 September, 1922, 31st March, 1923, 30 September, 1923 and each of the half years of 1924 in the sum of Rs. 250 in respect of each half year. Under protest the plaintiff Company paid this tax and has now filed this suit to recover the sums so paid which amount to Rs. 1,500. The plaintiff's contention is that it does not transact business in Dindigul.

(2.) Before dealing with the facts of this case and the legal arguments, I will refer to the section and the rule of the Madras District Municipalities Act, 1920, under which the plaintiff Company has been assessed by the defendant. Suction 92 is headed "Tax on Companies and reads as follows: If the Chairman publishes a Notification under Section. 80 that a Companies Tax shall be levied every Company transacting business within the Municipality for profit or as a benefit society shall, after the date specified in the said Notification, pay a half-yearly tax on its paid-up capital on the scale shown in Sch. IV, if and as soon, as it has transacted business in the Municipality for the period laid down in Section. 95.

(3.) The Explanation reads as follows: Whenever a Company employs a servant or Agent to represent it for the purpose of transacting business in a Municipality, such Company shall be deemed to transact business within the Municipality and such servant or agent shall be liable for the tax in respect of the Company's business whether or not he has power to make binding contracts on behalf of the Company.