M. Balasundaram vs Financial Adviser, Southern Railway and Another

S. Padmanabhan, J.—This writ petition involves the interpretation of S. 115A of the City Municipal Corporation Act, 1919 (hereinafter

called the Act.) The petitioner seeks the issue of a writ of mandamus restraining respondents 1 and 2 who are Financial Adviser-cum-Chief

Accounts Officer, Central Office, Southern Railway, Madras and the Commissioner, Corporation of Madras, respectively from deducting from the

salary payable to him the profession tax due to the second respondent for any period anterior to 1st October, 1976.

The petitioner is employed as a clerk Gr. I in the accounts office of the first respondent. He has to pay a sum of Rs. 6.25 per month towards

profession tax to the Corporation of Madras. The profession tax for the period 1st October, 1974 to 31st March, 1977 was due as on the date of

the institution of the writ petition. On the requisition of the second respondent the first respondent passed an order on 14th July, 1976 that the

profession tax due from the petitioner to the Corporation of Madras for the period 1st October, 1974 to 31st march, 1977 would be deducted

form his salary in specified instalments. The contention of the petitioner is that the second respondent has no power to make any requisition to the

first respondent calling upon him to deduct from the salary of the petitioner any profession tax that has fallen due prior to 1st October, 1976.

Prior to 1st October, 1976 the Commissioner, Corporation of Madras, had no power to call upon any employer to deduct from the salary of

any employee the amount of profession tax due to the Corporation. Section 115 of the Act reads as follows :

The Commissioner may by notice require any employer or the head or secretary or manager of any public or private office, hotel, boarding house

or club or of a firm or company -

(a) to furnish within a specified time a list in writing of the names and residential address of all persons employed by such employer or by such

office, hotel boarding house or club, firm or company as officers, servants, dubashes, agents suppliers or contractors with a statement of the salary

or income of each of such employed persons; and

(b) to furnish particulars in regard to any company of which such employer, head, secretary or manager, as the case may be is the agent.

From a reading of the above section, it will be clear that Commissioner, Corporation of Madras had only the power to call upon the employer,

hotel, boarding house or club, firm or company to furnish within the specified time a list in writing of the names and residential addressed of persons

employed by such employer with a statement of the salary or income of each of such employed person and also to furnish particulars in regard to

any company of which such employer, head, secretary or manager, as the case may be, is the agent. This section did not confer the power upon

the Commissioner, Corporation of Madras, to call upon the employer to deduct any professional tax or other tax due form the wages or salaries of

the employees.

On 1st October, 1976, S. 115A of the Act was introduced, which reads as follows :

Deduction of Profession tax form salary or wages or others, - (1) Every employer shall, on receipt of a requisition from the Commissioner deduct

form the salary or wages of any person employed by the employer as an officer or a servant or form any sum payable by the employer to any

person employed by the employer as dubash, agent, supplier or contractor, such amount of profession tax, as may be specified in such requisition,

as being due from such employed person.

Explanation : In this sub-section ''employer'' includes the head or secretary or manager of any public or private office, hotel, boarding house, club,

firm or company.

(2) Every person responsible for making, any deduction under sub-s. (1) may, at the time of making the deduction, increase or reduce the amount

to be deducted under sub-s. (1) for the propose of adjusting any excess or deficiency arising out of any pervious deduction or failure to deduct,

during the half year.

For the first time, S. 115A conferred power on the Commissioner to make a requisition on the employer to deduct form the amount payable by the

employer to any person employed by him such amount of profession tax as may be specified in such requisition as due from such employed

person. Mr. Venkataraman, the learned counsel for the petitioner submits that such amount or profession tax as may be specified in such

requisition can only refer to such amount of profession tax as may fall due for payment after 1st October, 1976. It is the contention of Mr.

Venkataraman that the section does not confer power on the Commissioner to make a requisition to deduct from the amount payable by the

employer to any person employed by him, the profession tax that might have already fallen due for payment prior to 1st October, 1976.

Consequently, the learned counsel contends that in the case of the petitioner the profession tax that had fallen due on 1st October, 1976, and

thereafter can only be deducted from the salary due to the petitioner.

Mr. B. Ram Mohan, for the second respondent and Mr. Venkateswara Rao for the first respondent contend that by virtue of S. 11(c) of the

Payment of Wages Act, the first respondent would be entitled to deduct the profession tax due from the petitioner with effect from 1st January,

1975. This argument has been advanced on the ground that on 1st January, 1975 S. 11(c) was incorporated in the Payment of Wages Act which

authorised the employer to deduct from the wages of the employed person the amount of profession tax due to the local authority. Section 11(c) of

the Payment of Wages Act (Central Act IV of 1936) reads as follows :

Deduction in respect of profession tax. - The employer shall, if so required by a requisition in writing by the local authority concerned or by an

officer authorised in this behalf, make the deduction authorised under clause (gg) of sub-section (2) of S. 7 from the wages of the employed person

and remit the amount so deducted to the credit of the local authority concerned in such manner as the State Government may by general or special

order specify.

On an anxious consideration of arguments advanced by the learned counsel for both sides, I am inclined to agree with the submissions of Mr.

Venkataraman. Prior to 1st October, 1976 the Commissioner, Corporation of Madras, had only the power conferred on him under S. 115 of the

Act. Section 115 empowered the Commissioner, Corporation of Madras, to call upon the employer to furnish within a specified time list in writing

of all persons employed by such employer with a statement of the salary or income of each of such employed persons. Therefore, prior to 1st

October, 1976, the Commissioner had no power to make a requisition in writing calling upon the employer to deduct the profession tax from the

salary of the employee. For the first time, such a power is conferred on the Commissioner only under S. 115A of the Act which came into force

only on 1st October, 1976. Section 115A provides that such amount of profession tax as may be specified in such requisition shall be deducted by

the employer form the salary or wages payable to an employee. There is no reference to arrears of profession tax in S. 115A of the Act.

Therefore, the reference to such amount of profession tax, can only be to the amount of profession tax that may fall due with effect form the date of

introduction of S. 115A. It could not have been the intention of the Legislature that the Commissioner would be entitled to make a requisition in

writing calling upon the employer to deduct the arrears of profession tax due prior to the date of coming into force of S. 115A. If S. 115A is so

construed as to confer upon the Commissioner the power to call upon the employer to deduct form the salary or wages of an employee the arrears

of profession tax that had already been fallen due prior to 1st October, 1976 the Commissioner would be in a position to claim even such arrears

of profession tax which might have become barred by limitation. That could not have been the intention of the Legislature.

I am not persuaded to accept the argument of Mr. Ram Mohan and Mr. Venkateswara Rao that by virtue of S. 11(c) of the Payment of Wages

Act, which came into force on 1st January, 1975 the profession tax that has fallen due for payment with effect from that date could be deducted

form the salary of the petitioner. Section 11(c) empowered the employer to make the deduction authorised under clause (gg) of sub-s. (2) of S. 7

from the wages of the employed person and remit the amount so deducted to the credit of the local authority concerned, if so required by a

requisition in writing by the local authority concerned, if so required by a requisition in writing by the local authority. A condition precedent for

exercise of the power conferred on the employer under S. 11(c) of the Payment of Wages Act is that there should be a requisition in writing by the

local authority calling upon the employer to deduct the profession tax form the salary or wages of the employee. In the absence of any such

requisition, the employer would have no power to make the deduction authorised under clause (gg) of sub-s. (2) of S. 7 from the wages or salary

of the employee. On 1st January, 1975 on which date S. 11(c) was introduced in the Payment of Wages Act, S. 115A had not found its place in

the Madras City Municipal Corporation Act. Consequently, the mere introduction of S. 11(c) would not empower an employer to deduct from the

wages of its employee the profession tax due to the Corporation of Madras. I have already found that only S. 115A which came into effect on 1st

October, 1976 for first time conferred the power on the Commissioner, Corporation of Madras, to make a requisition in writing calling upon an

employer to deduct the profession tax due form an employee form the latter''s salary or wages. In the circumstances, merely because S. 11(c) had

been incorporated in payment of Wages Act as early as on 1st January, 1975 an employer will not get the power to deduct the profession tax due

to the Corporation of Madras for a period anterior to 1st October, 1976. I, therefore, hold that the second respondent had no power to make a

requisition calling upon the first respondent to deduct from the salary of the petitioner, the profession tax for the period anterior to 1st October,

1976.

Notwithstanding the above finding, I am not inclined to issue a writ of mandamus as prayed for by the petitioner. Mr. Venkataraman states that

there had been no order of stay of collection of tax pending the writ petition. The profession tax due to the second respondent has already been

deducted from the salary of petitioner by the first respondent. No part of the arrears of profession tax claimed had become barred by limitation.

Therefore, on prejudice has been caused to the petitioner by the amount having been already deducted form the salary of the petitioner. In the

circumstances, I do not consider it necessary to issue a writ of mandamus which will have the consequence of the 2nd respondent having to refund

the amount already collected form the petitioner, to the petitioner. In the circumstances, the writ petition is dismissed. There will be no order as

costs.