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Judgment
Bal Raj Tuli, J.—The petitioners, 93 in number, were in the employment or the State of Punjab on the date this petition was filed as Sub-Divisional Officers, A. D. Es. etc., as stated in me petition. In 1965 respondent 2 levied a tax on professions, trades, callings and employment under in provisions of Punjab Panchayat Samitis Zila (sic) Act, 1961 (hereinafter called the Act). The petitioners and various other employees of the Baas Dam Project were included in the consolidated list prepared for the imposition of the said tax When respondent 2 started the recovery of the said tax with the help of respondent 3 and 4, the petitioner held the present petition challenging the levy, assessment and collection of the tax from them on various grounds which will be noticed hereinafter. Written statement has been filed by respondent 2 justifying the said levy. The other respondents have also filed their written statements. Replication was also been filed by petitioners to the written statement filed by the respondent 2.
The first point most (sic) urged by the learned counsel for the petitioners is that the petitioners were not employed nor were they carrying on any trade, calling or profession written the territorial limits of respondent 2 Panchayat Samiti. Although they were the employees of the Beas Dam Project their actual places of work and duty were at Sansarpur. Terrace and Pong Dira, both of which are situated in the district of Kangra now in Himachal Pradesh and are outside the jurisdiction of respondent 2. The petitioners admit that they reside at Talwara, which in within the jurisdiction of respondent 2. Panchyat Samiti, but it is submitted that because of their place of duty being outside the jurisdiction of the Panchayat Samiti they are not liable to pay the tax. In reply to this allegation it has been staled by respondent 2 in its return :--
The duty headquarters of the petitioners is at Talwara and thus is in the jurisdiction of Panchayat Samiti. Talwara Further all offices of the Beas Project Administration are located at Talwara and all officers of the Baas Project Administration, who go on tour to inspect the Sansarpar Terrace and the Pong Din, claim T.A for journeys performed from Talwara to Sansarpur Terrace and Pong Dam.
In support of this assertion, respondent 2 has filed a copy of letter No. 20655-74/7A, dated March 26, 1956, from the Superintending Engineer, Administration and Stores, Directorate of Construction, Beas Dam, Talwara Township, to all the Executive Engineers, Beas Dam Project, Talwara Township, reading as under :--
Subject Recovery of Panchayat Samiti Professional Tax. It has been decided to levy Panchayat Samiti Professional Tax on the workmen of Beas Dam Project. Since area of duty of Beas Dam Project is divided into two Blocks viz Hejipur and Pragpur, therefore, it is necessary to prepare separate lists for each of the two Blocks. Lists for the workmen working in Hoshiarpur District are to be submitted to Hajipur Samiti and those working in Kangra District 10 Pragpur Samiti. The requisite lists in respect of work-charged employees showing inter alia the following information may please be supplied to the concerned Panchayat Samitis immediately: --
(i) Name of workman.
(ii) Designation.
(iii) Token No.
(iv) Place of duty.
(v) Total emoluments paid during the year. An official may be deputed to prepare the list and to collect the information from Time Keeping office which is available there.
In their replication, the petitioners have admitted that they are paid T.A. for going to the site of their actual working in District Kangra, but it is pleaded that that fact is not enough to give jurisdiction to Respondent 2 to levy lax on them. In the return it has also beets mentioned that tie Beas Project authorities did not supply the information with regard to its employees inspite of various letters, which are mentioned in paragraph 3 of the return, and the Panchayat Samiti collected the details of the required information from the Treasury and prepared the assessment statement on October 1, and 5, 1965, under rule 4(6) of the Panchayat Samitis Taxation and Fees Rules 1963 (hereinafter called the Rules). Since the petitioners did not file any objections before the Assessing Authority (respondent 2), the fact as to the place of employment or profession of the petitioners was not determined. On the facts stated in the written statement, it is evident that the petitioners ate employed in the Beas Dam Project Administration, Talwara, where they have been provided places of residence and from where they go for duty at Sansarpur Terrace and Pong Dam and that they draw their salaries from the treasury at Talwara. Normally T.A. is paid to a Government servant when he goes out of his place of employment on official work. It is also paid to an employee whose place of work is beyond live miles from the place of his residence. Mete payment of T.A. is, therefore, not indicative of the tact that the place of duty and work of the petitioners is normally at Talwara from where they go cut on inspection to the project sites as a part of their duty. The petitioners have categorically asserted that their place of work and duty is either Sansarpur Terrace or Pong Dam and not Talwara. Inspite of the letter of the Superintending Engineer quoted above, the names of the petitioners were not furnished to respondent 2 as persons employed and working at Talwara. It is, therefore not possible to hold that the petitioners were employed or were carrying on their calling and profession at Talwara within the jurisdiction of the Panchayat Samiti, Talwara which was previously known as Panchayat Samiti, Hajipur. "Place of Employment" for the purposes of professional tax means the actual place where the employee is posted and normally works and not the place where he was provided official residence or from where he draws his salary.
The learned counsel for the petitioners has relied on a Division Bench judgment of the Lahore High Court in AIR 1944 385 (Lahore) , wherein it was held :--
In the case of a lawyer it is the place where he can be engaged that matters and that is his place of business The place where the contract is entered into and where the vakalatnama is signed is where the lawyer carries on his profession or trade and if his office or chambers are not within the municipal limits, then it cannot be said that he curies on his profession within those limits. He might perform certain acts connected with his engagement (e.g. pleading in Courts,) within those limits but that does not amount to following his profession within those limits.
This judgment evidently as no relevancy because it related to the profession of a lawyer whereas in the instant case the servants of the Government are involved and the place of their employment has to be determined
In District Board Rohtak v. Master Jamna Das (1956) 58 PLR 293, a learned Single Judge or this Court held that the teachers and clerks in the employment of a school carry on business at the place where he School is situate. That is a safe guide to determine the liability of employees to pay the professional tax. Mere residence does not give the jurisdiction to a Panchayat Samiti to levy the professional tax on a person unless he also carries on his profession, calling or employment within its territory. In the instant case, no cogent evidence has been brought on the record as to the actual place of work of the petitioners. This fact could be easily proved by producing an affidavit or a statement of the Head of the Organisation or the Superintending Engineer concerned to say which of the petitioners were employed at Talwara proper and which of them outside that place. No such effort was made. Even a copy of the resolution of the Panchayat Samiti levying the professional tax has not been produced to show who ware the persona liable to pay the same Whenever the legality of imposition of any tax is questioned in appropriate proceedings, it is for the assessing authority to show J that the tax has been duly authorised by a valid provision of law and the assisted is liable to pay the same. Under sections 65 and 66 of the Act, the professional tax can be levied by the Panchayat Samiti if so authorised by the Zila Parishad or the State Government. Even that authorisation has not been produced to show its ambit or scope. It has been urged by the learned counsel for respondent 2 that the petitioners had not challenged that the levy of the tax was not authorised and, therefore, it has to be presumed that it had been validly levied by the Panchayat Samiti after obtaining due authorisation from the Punjab Government or the Zila Parishad. The petitioners had definitely challenged their liability to pay the tax imposed on them by respondent 2 and it was, therefore, incumbent on this respondent to prove all the facts on the basis of which the petitioners were held assessable to professional tax. Respondent, 2, in my opinion, has failed in this tusk and on the material on the record I am unable to hold that the petitioners were employed at Talwara and were liable to pay the professional tax to respondent 2.
The next point stressed by the learned counsel for the petitioners is that the procedure prescribed in rule 4 of the Rules had not been followed. This rule reads as under :--
Preparation of assessment statements.
(1) The Assessing Authority may by notice require any person to file or cause to be filed a return relating to his profession, trade, calling or employment showing therein such particulars as may be specified in the notice.
(2) It shall be obligatory on the part of all the departments of the Central Government the State Government and the local authorities to supply full and accurate information regarding their employees working within the jurisdiction of a Panchayat Samiti in such manner as may be required by the Assessing Authority within one month from the date of requisition.
(3) For the purposes of assessment of any tax a census of all the persons affected by it shall be conducted by the Tax Collector with the help of the Gram Panchayat concerned.
(4) Before conducting the census the Tax Collector shall draw up a programme in consultation with the Gram Panchayat concerned and shall notify it by affixing a copy thereof at a conspicuous place in the village or area of which he proposes to conduct the census. The Tax Collector shall also furnish a copy of the programme to the Gram Panchayat concerned and shall proceed to conduct the census accordingly.
(5) A preliminary assessment statement in Form No. T.F.R. I will thus be prepared by the Assessing Authority on the basis of she census conducted by the Tax Collector and the information received under sub-rules (1) and (2).
(6) A copy of a statement of preliminary assessment so made shall be exhibited in the offices of the Panchayat Samiti and Gram Panchayats concerned for the information of the assessees together with a notice to the effect that any assessee who objects to the inclusion of his name in the statement or who on any ground denies his liability for payment of the tax may within 30 days from the date of the exhibition of the statement, submit his objections to the Assessing Authority. The fact of Exhibition of the preliminary statement in the offices of the Panchayat Samiti and the Gram Panchayat concerned will also be proclaimed by beat of drum in the village concerned.
Provided that in the case of employees referred to in sub-rules (2), a copy of the assessment statement will be furnished to the Head of Office concerned.
(7) Particulars of every objection received by the Assessing Authority within the period specified in sub-rule (6) shall be entered in a register of objections in Form No. T.F.R. 2.
(8) When the period within which objections may be submitted under sub-rule (6) has expired, the Assessing Authority shall pass an order confirming every assessment in respect of which no objection has been received within the period specified in sub-rule (6). In the case of objections received within the Specified period the Assessing Authority shall cause a notice to be exhibited in the office of the Panchayat Samiti intimating the date on which and the time and the place at which such objections will be heard by him, and a copy of such notice will also be served upon the objector either personally or sent to him by post under postal certificate.
(9) On the date and at the time and place specified in the notice the Assessing Authority shall take up the objections received in the order in which they are entered in the Register of Tax Objections in Form T.F.R. 2 and shall pass an order dismissing such objections in which the objector is not present. In other cases, the Assessing Authority shall, after hearing the objector and making a brief memorandum of such evidence as the objector my produce in support of his objections and any other evidence which the Assessing Authority may think fit to record, pass such orders in respect of each objection as it may think fit :
Provided that if the objector is a female or is incapacitated from appearing in person by old age, sickness or any other reason which the Assessing Authority considers to be sufficient the objector may be allowed to appear through a representative.
(10) Within three days of the date on which necessary orders have been passed under the provisions of sub-rules (8) and (9), a final assessment statement in Form No. T.F.R. 1 shall be prepared and caused to be exhibited in the offices of the Panchayat Samiti and the Panchayats concerned by the Assessing Authority. The fact of such exhibition will also be proclaimed by beat of drum in the villages concerned.
(11) Any assessee who objects to his assessment as shown in the final assessment statement prepared under sub-rule (10) may, within sixty days from the date of exhibition of the final assessment statement under sub-rule (10), submit in writing an appeal against such assessment to the Deputy Commissioner. The Deputy Commissioner shall fix the date, time and place, for hearing the appeal, and shall send an intimation about the same to the appellant and the Assessing Authority. The Deputy Commissioner shall, after giving an opportunity to the appellant or his representative of being heard and after making such further enquiry as he may deem necessary, pass such orders in respect of the appeal as he may think it. Such orders shall be final and the assessment statement shall, if necessary, be corrected in accordance therewith.
Provided that no appeal shall be heard by the Deputy Commissioner unless he is satisfied that the tax in question has been deposited. If the appeal is accepted, the tax so deposited by the appellant shall be refunded in accordance with the terms of the order.
Note :--No appeal filed after the expiry of the prescribed period will be entertained or heard by the Deputy Commissioner on any ground.
It is stated by the petitioners that no notice as provided in rule 4(1) of the Rules was given to the petitioners. It appears to be so but it is pleaded in the return that every effort was made to obtain the information from the Beas Project authorities, as required under rule 4(2) of the Rules, but having failed to obtain the information from that source, respondent 2 collected the details of the required information from the Treasury and prepared the assessment statement, a copy of which is Annexure R. 2/12 to the written Statement, on October 1 and 5, 1965 under rule 4(6) of the Rules. One copy of this statement was exhibited in the office of the Panchayat Samiti, Talwara and other copies were affixed at the following places :--
Office of General Manager, Beas Project, Administration;
Post Office, Talwara, and
Assistant Treasury Officer''s office, Talwara.
The fact of the exhibition of those lists at those places was also proclaimed by beat of drum in the area where the petitioners had their residences. It was also proclaimed that any objections to the inclusion of the name in the statement on any ground and denial of the liability to pay the professional tax should be submitted to the Assessing Authority within a period of 30 days from that date. An affidavit of Shri Roop Lal, peon, who affixed the lists and made the proclamation by beat of drum, is Annexure R. 2/13 and a copy of his report is Annexure R. 2/24. After the expiry of 30 days, as prescribed in rule 4(6) of the Rules, the final assessment was made and the lists and demand slips were issued and forwarded by respondent 2 to the General Manager, Beas Project Organisation, on November 5, 1965, for serving the same on individual assessees to enable them to know their liability. All the demand slips were returned by the General Manager, Baas Project Organisation, to respondent 2 with his letter dated December 7, 1965, intimating that the Department had taken up the case with the Punjab Government for exemption of its employees residing in Talwara Township from the levy of professional tax. Since the petitioners did not pay the professional tax, steps were taken to recover the same with the help of respondent 4.
It is thus apparent that the provisions contained in sub-rules (1), (3), (4) and (6) of rule 4 of the Rules were not followed in preparing the preliminary assessment list nor was a copy of it sent to the Head of the office. The demand slips sent to the General Manager, Baas Project Administration, for serving them on individual assessees were not delivered to them, so that they did not obtain the knowledge that they had been subjected to the professional tax levied by respondent 2. The petitioners thus did not get any opportunity to object to the proposed assessment or final assessment.
The last objection is with regard to the procedure adopted for the recovery of tax from the petitioners. I need not go into this matter because the recovery was stayed after this petition was admitted.
For the reasons given above, this petition is allowed, but the parties are left to bear their own costs.