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Judgment
K. Shivashankar Bhat, J.-The revenue has filed this Writ Petition against the order of the Karnataka Appellate Tribunal; question arises under the provisions of Karnataka Tax on Professions, Trades, Callings and Employments Act of 1976 (for short, the Act). The Act came into force with effect from 1-4-1976.
The respondent is a medical practitioner at present. Earlier, she was employed in Chinmaya Mission Hospital from 1-2-1974 to 31-8-1977, when she resigned from her job; she started private practice from 1-4-1978. The third petitioner assessed the respondent to the tax under the Act and levied a sum ofRs. 250/- as payable by her. According to the third petitioner, respondent''s''standing in the profession'' commenced in February, 1974 and her entire service at the Chinmaya Mission Hospital should be computed as part of her standing in the medical profession. The respondent, however contended that, under the Act, there is a distinction between employment and the profession; the period of employment, therefore cannot be added to arrive at the standing in the profession. The taxing statute has classified different kinds of vocations, differently, each is a category by itself. Respondent''s appeal to the second petitioner failed; but her contention was accepted by the Appellate Tribunal; hence this Writ Petition.
When the respondent was an employee under the Chinmaya Mission Hospital, her employer was paying the lax under the Act probably after deducting the tax from her salary, but her status, under the Act was as an employee, The professionals, such as Lawyers and Doctors in private practice come under Entry-2(b)(A) of the Schedule to the Act.
Section 3 of the Act creates the charge to the lax; the tax is "on professions, trades, callings and employments....". Every person who exercises any profession or calling or is engaged in any trade or holds any appointment, or is employed in any manner specified in the second column of the Schedule shall be liable to pay the lax. The liability to pay the tax depends upon the nature of the occupation. Rate of lax is fixed by the Schedule, and it varies with the nature of occupation; however those under employment arc categorised into six classes self-employed professions, such as legal practitioners, medical practitioners, technical and professional consultants, etc. come under Item-2 of the Schedule. Here again, the liability to pay the tax and the rate of tax payable by the persons mentioned in Item-2(a) to 2(d) depends upon the individuals ''standing in the profession''. A person with less than 2 years of standing is not liable to pay the tax.
The petitioners contend that a person duly qualified to practice medicine, if employed in a Hospital, attains a standing in his or her profession and therefore the period of employment should be included, to compute the ''standing'' in the ''profession''.
The argument cannot be brushed aside as unworthy of any consideration. But, here, the relevant words are to be construed in the setting in which they are used. The statute in question is a law levying tax; the Schedule to the Act (which is part of the statute) categorises various persons for the liability to pay the tax; the charging section (Section 3) has dealt with each category of occupation distinctly by different nomenclature. Profession tax is correlated to the profession; similarly, employment tax is a tax on the employment. Primarily the tax is levied oneach of the occupation; this is clear from Section 3(1). The person who is occupied with the particular occupation, is liable to pay the said tax. The lax is thus intrinsically correlated to the individual''s occupation; therefore, when the rate of tax depends upon the standing in the particular category of occupation, any other experience or standing under a different category, cannot be considered, when the words arc clear and the language unambiguous. In the taxing law, the doubt if any, in the mailer of interpretation, should be resolved in favour of the assessee. The levy of tax and the particular rate are to be confined to the subjects clearly brought out by the legislation.
It is also possible to understand the meaning attributable to the phrase ''standing in the profession'' in Item 2 of Schedule to the Act, by a closer scrutiny of the said item. Under clause (a) of Item 2, legal practitioners including solicitors and notary public are to pay the tax. Law graduates, enrolled as Advocates may join service as ''law officers'' or as employees in the litigation sections of Banks, business establishments, etc. On retirement or after resignation from service, if such a person starts private practice, can it be said that his career as an employee should be considered as part of his ''standing in the profession''? This field of which lawyers and Judges are familiar, indicate that service rendered as an employee is not computed or considered for the ''standing in the profession of law''. Item 2(c) refers to ''managing consultants.''A person employed as a top executive starts his own ''consultancy'' after retirement or resignation, would his past career be added as to his standing? An answer to the question would involve a detailed investigation as to the nature of his employment and the responsibility he was discharging. Similar problem would crop up, while considering the standing of an agent falling under Item 2(d). It cannot be said that the employment by a person qualified in one branch of science, will always be in the same branch.
Another aspect comes to light from a reading of clauses (a) and (b) of Item 2. The tax rate varies with the standing in the profession, within Bangalore Urban Agglomeration, Municipal limits of District Headquarter towns or in any other area in the State; those who fall under clause (a) are taxed at a higher rale (except when standing is below 2 years). A person in employment may have served in different parts of the State, including the areas covered by clauses (a) and (b); in such a case, it is practically impossible to apply the construction placed by the petitioners to find out the ''standing'' of the person, with precision. The idea behind these two sub-clauses (a) and (b) of Item 2 is to treat the actual profession rendered as a separate unit, dehors the earlier employment of the person concerned. In fact, these two sub-clauses make it clear that standing gained in the profession by a person, outside the State, in no way goes into the computation of the "standing in the profession" for the levy of tax. The individual''s experience gained elsewhere, by whatever means, thus is irrelevant to apply Item 2 of the Schedule. Computation of the standing in the profession starts afresh within the State; if so, there is nothing strange, if the Act treats the profession carried on within the State independent of the experience gained as an ''employee'', also.
The requirement of 2 years standing as an independant professional, seem to be the basic criterion to fasten the tax liability.
For the reasons stated above, it is not possible to accept the petitioners'' contention.
Writ Petition is accordingly dismissed; no costs.
Writ Petition dismissed.