Kallakudi Selection Grade Panchayat vs The State of Tamil Nadu and Others

Vinod K. Sharma, J.—The Petitioner has invoked the writ jurisdiction of this Court to challenge the order, dated 08.03.1999 passed by the

District Collector, Trichy permitting the fourth Respondent ie.,The President, Palanganatham Panchayat, Thirumanoore Union, Perambalur District

to collect the Professional Tax, on the ground that the Factory of M/s. Dalmia Cements(Bharath) Limited falls within the jurisdiction of the said

Panchayat.

In support of the Writ Petition, it has been pleaded that the fifth Respondent M/s. Dalmia Cements(Bharath)Limited established a factory in the

erstwhile Trichy District and its formation and establishment were within the other panchayat also. One such Panchayat is Kallakudi Selection

Grade Panchayat which was originally forming part of Trichy District. The case of the Petitioner is that after trifurcation of Trichy District into

Tiruchirappalli, Perambalur and Karur District, the fourth Respondent/Panchayat fall within the organization of District of Perambalur.

That most of the establishment of Respondent No. 5 falls within the jurisdiction of the Petitioner, wherein, only a part of it falls within the

jurisdiction of Respondent No. 4. In the year 1986, there was a dispute between the Petitioner/Panchayat and the fourth Respondent. That in

exercise of the power conferred under the Act, the District Collector directed the collection to be made by the Petitioner/Panchayat, out of which

10% was to be adjusted towards service rendered, whereas remaining 90% was ordered to be shared by both the Panchayats equally, this

arrangement continued till the year 1999.

The case of the Petitioner is that the District Collector, Perambalur vide order, dated 19.05.1999, directed the fourth Respondent to collect the

tax on its own and directed to pay 45% to the Kallakudi Selection Grade Panchayat, and for the remaining amount, directed the fourth

Respondent to proceed against the Petitioner/Panchayat for recovery. Thereafter, it was decided that the amount collected towards Professional

Tax be paid directly to Palanganatham Panchayat. Since then, the entire amount is being paid to the fourth Respondent, under the orders of the

District Collector.

The learned Counsel for the Petitioner challenges the impugned order on the ground that the tax should be shared 50:50.

The Section 198(B) of the Tamil Nadu Panchayat Act, 1994 reads as under:

198-B. Levy of Profession tax.--(1) There shall be levied by the Village Panchayat a tax on profession, trade, calling and employment.

(2) Every Company which transacts business and every person who is engaged actively or otherwise in any profession, trade, calling or

employment within the Panchayat Village on the first day of the half-year for which return is filed, shall pay half-yearly tax at the rates specified in

the Table below in such manner as may be prescribed:

AVERAGE HALF-YEARLY HALF-YEARLY

SL. No

INCOME From To TAX

(1) (2) (3)

1 Rs. upto 21,000 Rs. Rs. Nil

2 21,001 30,000 60

3 30,001 45,000 150

4 45,001 60,000 300

5 60,001 75,000 450

6 75,001 and above 600

(3) The rate of tax payable under Sub-section (2) shall be published by the Inspector in such manner as may be prescribed.

(4) Where a Company or person proves that it or he has paid a sum due on account of the tax levied under this Chapter or any tax of the nature of

a profession tax imposed under the Cantonments Act, 1924(Central Act II of 1924) for the same half-year to any Local Authority or Cantonment

Authority in the State of Tamil Nadu, such Company or person shall not be liable, by reason merely of change of place of business, exercise of

profession, trade, calling or employment, or residence, to pay the tax to any other local authority or Cantonment Authority.

(5) The tax leviable from a Firm, Association or Hindu undivided Family may be levied on any adult member of the Firm, Association or Family.

(6) Where a person doing the same business in the same name in one or more places within the Panchayat Village, the income of such business in

all places within the Panchayat Village shall be computed for the purpose of levy of tax and such person shall pay the tax in accordance with the

provisions of this Chapter.

(7) Where any Company, a Corporate Body, Society, Firm, body of persons or Association pays the tax under this Chapter, any director, partner

or member, as the case may be, of such Company, Corporate Body, Society, Firm, Body of Persons or Association shall not be liable to pay tax

under this Chapter for the income derived by such director, partner or member from such Company, Corporate Body, Society, Firm, Body of

Persons or Association shall not be liable to pay tax under this Chapter for the income derived by such director, partner or member from such

Company, Corporate Body, Society, Firm, Body of Persons or Association.

Provided that such director, partner or member shall be liable to pay tax under this Chapter for the income derived from other sources.

(8) Every person who is liable to pay tax, other than a person earning salary or wage shall furnish to the Executive Authority a return in such form

for such period and within such date and in such matter as may be prescribed;

Provided that subject to the provisions of Sub-sections(10) and (11) such person may make a self-assessment on the basis of average half-yearly

income of the previous financial year and the return filed by him shall be accepted without calling for the accounts and without any inspection.

(9) Every such return shall accompany with the proof of payment of the full amount of tax due according to the return and a return without such

proof of payment shall not be deemed to have been duly filed

(10) Notwithstanding anything contained in the provision to Sub-section (8), the Executive Authority may select ten percent of the total number of

such assessment in such manner as may be prescribed for the purpose of detailed scrutiny regarding the correctness of the return submitted by a

person in this connection and in such cases final assessment order shall be passed in accordance with the provisions of this Chapter.

(11) If no return is submitted by any person under Sub-section(8) within the prescribed period or if the return submitted by him appears to the

Executive Authority to be incomplete or incorrect, the Executive Authority shall, after making such enquiry as he may consider necessary, assess

such person to the best of his judgment.

Provided that before taking action under this Sub-section, the person shall be given a reasonable opportunity of proving the correctness or

completeness of any return submitted by him.

(12)Every person who is liable to pay tax under this section, other than a person earning salary or wage--

(a)shall be issued with a passbook containing such details relating to such payment of tax as may be prescribed and if the pass book is lost or

accidentally destroyed, the Executive Authority may, on an application made by the person accompanied by such fee as may be fixed by the

Village Panchayat, issue to such person a duplicate of the pass book.

(b) shall be allotted a permanent account number and such person shall--

(i) quote such number in all his returns to, or correspondence with, the Executive Authority;

(ii) quote such number in all challans for the payment of any sum due under this Chapter.

(13) The rate of tax specified under Sub-section (2)shall be revised by the Village Panchayat once in every five years and such revision of tax shall

be increased not less than twenty-five percent and not more than thirty five percent of the tax levied immediately before the date of revision.

The decision made by the Execution Court is subject to challenge in appeal u/s 198(g) of the Act.

Section 198(g) reads as under:

198-G. Appeal.--(1) Any person or employer aggrieved by any order or decision of the Executive Authority in relation to the payment of

tax(including penalty, fee and interest) may, within such time as may be prescribed, appeal to the authority prescribed u/s 174.

(2) The decision of the authority referred to in Sub-section(1) shall be final and shall not be questioned in any Court of law:

Provided that no such decision shall be made except after giving the person affected a reasonable opportunity of being heard.

The executive authority referred to in Section 198(B) is defined under the Tamil Nadu Tax on Profession, TC and Employment Act, as under:

(3) ""executive authority"" means the Commissioner or other functionary of the local authority concerned, who is vested with the general executive

power under the Madras City Municipal Corporation Act 4 of 1919, the Madurai City Municipal Corporation Act 15 of 1971, the Coimbatore

City Municipal Corporation Act 25 of 1981 or under any law for the time being in force, constituting any other Municipal Corporation or under the

Tamil Nadu District Municipalities Act 9 of 1940, the Court allam Township Act 16 of 1954, the Bhavanisagar Township Act 15 of 1954 and

includes any functionary who is vested with the general executive powers of township constituted under the Tamil Nadu District Municipalities Act,

5 of 1920 or the Tamil Nadu Panchayats Act 35 of 1958.

The contention of the learned Counsel for the Petitioner is that the entire area falls within the jurisdiction of Perambalur Panchayat, which is

disputed by the fourth Respondent. This Court in exercise of writ jurisdiction cannot go into the disputed question of facts, specially, when a

remedy of appeal is provided to the Petitioner. The Petitioner if so advised should proceed in accordance with law by approaching the executive

authority or appellate authority.

Consequently, the Writ Petition is ordered to be dismissed with liberty to the Petitioner to avail the statutory remedy under the Act. No costs.