VULCAN INSURANCE COMPANY LTD BY ITS LOCAL REPRESENTATIVE CHIMANLAL CHOTALAL BHARBHAIYA Vs. CORPORATION OF MADRAS

JUDGEMENT

(1.) This is a case referred to us for decision by the Chief judge of the Court of Small Causes under Rule 17 of Schedule IV of Madras City Municipal Act (IV of 1919). The Vulcan Insurance Company was assessed to a licence fee under Section 110. The contention of the Corporation is, that the Company is liable to pay Rs. 500 under the scale prescribed on the capital basis; the latter asserts, on the contrary, that it is to be assessed on the basis of gross income and is liable to pay only Rs. 25. The material part of Section 110 reads thus: Every incorporated company transacting business within the city for profit or as a benefit society shall pay by way of licence fee in addition to any other licence fee that may be leviable under this Act a half-yearly tax on its paid-up capital on the scale shown in the taxation rules in Schedule IV but in no case exceeding rupees one thousand, if and as soon as it has transacted business in the city for the period, prescribed in Section 113." Explanation-.--Whenever a company has an office, agent or firm to represent it for the purpose of transacting business in the city, such company shall be deemed to transact business in the city and such office, agent or firm shall be liable for the tax in respect of the company's business, whether or not such office, agent or firm has power to make binding contracts on behalf of the company.

(2.) Rule 7, Schedule IV provides: Companies shall be assessed by the Commissioner on the following scale: Provided that any company, the head office or a branch or principal office of which is not in the city and which shows that its gross income received in or from the city has not in the year immediately preceding the year of taxation exceeded-

(3.) The Company contends that the case falls within the proviso referred to above. The question is, does it or does it not apply? The learned Chief judge has decided the point in favour of the Corporation of Madras.