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Judgment
Padmini Jesudurai, J.—The Petitioner, an Exserviceman and accused in S.T.C. No. 430 of 1990 pending before the Judicial Magistrate,
Thuckalay, on a complaint filed by the Respondent herein for offences u/s 178(22) of the Tamil Nadu Panchayat Act 1958 read with Rule 25(2) of
the Rules framed thereunder, for non-payment of the Profession Tax, invokes the inherent powers of this Court u/s 482, Code of Criminal
Procedure to quash the above proceedings, primarily on the ground that he, as ex-Serviceman ,is exempted from payment of profession tax.
Facts briefly are: the Petitioner an Exserviceman is presently employed as Clerk in the State Bank of India, Kothanallur, Kanalikarai, within the
limits of Kumarapuram Town Panchayat, Kumarapuram. He resides in the above place. For his salary in the above employment, he was assessed
to professional tax by the Panchayat, and bills for the period from 1.4.1989 to 31.3.1990 had been served on him on 17.7.1989, 25.1.1990 and
again notice was served on him on 27.2.1990. The Petitioner did not pay and instead challenged his liability to pay profession tax, contending that
as Exserviceman, he was except from payment of profession tax. Since a warrant for seizing of the properties of the accused had become
impracticable of execution, the prosecution was launched. The amount due is Rs. 206.23. The above prosecution is now sought to be quashed.
Thiru Sreekumaran Nair, learned Counsel for the Petitioner raised two contentions, the first of it being that the Petitioner, since he is an
Exserviceman, is not liable to pay profession tax assessed by the Panchayat, Reliance was placed upon a communication said to have been sent by
the Government of India, Ministry of Defence, New Delhi, dated 13.7.1987 to the Chairman, National Exserviceman Co-ordination Committee,
New Delhi, in which it had been stated that Exserviceman are exempted from payment of Profession Tax under Para 285(A) of the Financial
Regulations - Part-I issued u/s 3 of the Municipal Taxation Act 1981 (Central Act 11 of 1980), which gives exemption to persons subject to Army
Act 1950 and other men in active service, who are compelled by the exigencies of their service, to reside within the limits of a Municipality or a
cantonment. The learned Counsel urged that though the above Regulation applied only to those residing in a Municipal or Cantonment area, the
High Court of the Andhra Pradesh in Executive Officer, Gram Panchayat v. Bhujanga Rao 1979 Crl. M.L.J. 595 had held that the Financial
Regulation would apply to those residing in Gram Panchayat also and that the same principle could be followed and the above Financial
Regulation, could be made to apply to those residing in Panchayat areas as well.
On this contention, Thiru N. Paul Vasanthakumar, learned Counsel for the Respondent would state that Section 121 of the Tamil Nadu
Panchayats Act 1958 (hereinafter referred to as the act) makes every person, who holds any appointment liable to pay Profession Tax and Sub
Section S gives exemption to persons who are subject to the Army Act, 1950. The Navy Act, 1959 or the Air Force Act, 1959, who are
compelled by the exigencies of military, naval or air force duty, to reside within the limits of the Panchayat, and that this exemption does not apply
to Exserviceman and as such, so long as the Act remains as it is, Exserviceman cannot claim exemption from Profession Tax.
Section 121 of the Act empowers the Panchayats to levy Profession Tax every half year in every village or town on every person who in that
half year, exercises a Profession, art or calling or transactions business or holds any appointment, public or private, within such village for not less
than 60 days in aggregate and so on. Sub section 8 exempts from Profession Tax, persons who may be subject to Army Act, 1950, the Navy Act
1957 or the Air Force Act, 1959 who are compelled by the exigencies of Military, naval and air force duty, to reside within the limits of the
Panchayat. Section 2(1) of the Army Act (1950) gives the categories of persons to whom that Act applies and Sub-section 2 adds, that the
persons mentioned would be subjected to the Act until duly retired, discharged, released, dismissed or cashiered from the service. It is clear from
the above provisions that the only persons who are exempted, are those to whom any one of the above Acts would apply and that too, only when,
by the exigencies of their service, they are compelled to reside within the limits of the Panchayat. The exemption cannot apply to Exserviceman.
The letter of the Government of India, Ministry of Defence, dated 13.7.1987 typed out in the typed set of papers produced by the learned
Counsel for the Petitioner, appears to a letter that had been published in the National Exserviceman Bulletin. This letter has no authenticity about it.
Further Para 288(A) of the Financial Regulation, which in that letter is said to grant exemption to Exserviceman from payment of Profession Tax,
applies only to those to whom the Army Act, the Navy Act and the Air Force Act would apply. The above Financial Regulation applies only to
those residing in a Municipality or a Cantonment and does not include a Panchayat. Further, this Financial Regulation cannot in any way help the
Petitioner, since in that Regulation, it is made clear, that only those who are compelled by the exigencies of the Army, Navy, Air Force to reside
within the limits of a Municipal or the Cantonment area, who are exempted from payment of certain taxes mentioned therein, including the
Profession Tax, Petitioner is not residing in Kumarapuram Town Panchayat compelled by the exigencies of the Army Act. He is discharged from
service and is permanently residing in the above place, obviously because it is his native place, and he had taken up a private employment as Clerk
in the State Bank of India, Koothanalloor Branch.
The decision of a learned Judge of the Andhra Pradesh High Court can have no application to the present facts, since in that case, the accused
was in the Army Service and was a member of the Defence Personnel, being employed as Chief Irrigation Engineer, residing in the limits of a Gram
panchayat. Under those circumstances, the learned Single Judge held that the Financial Regulation 288(A), which is a valid regulation, issued in
accordance with and in pursuance of Section 3 of the Municipal Taxation Act 11 of 1981, and which had granted exemption from Profession Tax
to those in active service residing in a Municipality or Cantonment, could, by interpreting the term ""Municipality"" be made to apply to a Panchayat
as well. The learned Judge therefore, extended the benefit of the above Financial Regulation to those in active service residing in Gram Panchayat
as well. Since the Petitioner is not in active service, Para 288(A) of the Financial Regulation cannot apply to the Petitioner, even if he resides in a
Municipality or cantonment. The further question whether this Court could agree with the view taken by the learned Single Judge, does not arise.
The letter issued by the Government of India, Ministry of Defence dated 24.4.1979 on the subject of Profession Tax levied by the Gram
Panchayat states that Section 3 of the Central Act (11 of 1980) exempts only Army, Navy and Air Forces Personnel from payment of taxes levied
by Municipalities/District Boards and the question of exempting them from payment of Profession Tax imposed by Gram Panchayat of State
Government, by bringing the Gram Panchayat within the purview of the Municipality Taxation Act 1881 for the purpose of granting exemption
from Profession Tax, etc., is under consideration. It is therefore clear, that even the Central Act 11 of 1980, which applies only to Army, Navy
and Air Forces Personnel and not to Exservicemen, would not include Gram Panchayat. All these communications are totally irrelevant, in view of
the fact that all of them would apply, only to Armed Forces personnel and not to Exservicemen and that too when the exigencies of their service
require their residence. Neither the Act nor any other regulation exempts Exservicemen from payment of Profession Tax.
It was then contended by the learned Counsel for the Petitioner that the prosecution is barred by limitation, since Section 166 of the Act
requires a complaint to be made within three months from the commission of the offence and that in the instant case, the complaint having been laid
only on 26.3.1990, long after the offence had been committed, is barred by limitation.
The above contention cannot be upheld. The relevant portion of Section 166 is as follows;-
Save as otherwise expressly provided in this Act, no person shall be tried for any offence against this Act or any rule or by law made thereunder
unless complaint is made within three months of the commission of the offence by the Police, the executive authority, the panchayat union council,
the commissioner or a person expressly authorised in this behalf by the panchayat, panchayat union council, executive authority or commissioner.
Section 165 dealing with Limitation is as follows:
No distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any tax or other sum due to a panchayat
or panchayat union council under this Act or any rule, by law, regulation or order made under it after the expiration of a period of six years from
the date on which distraint might first have been made, a suit might have been instituted, or prosecution might first have been commenced, as the
case may be in respect of such tax or sum.
A learned Judge of this Court in N. Thigarajan v. Neykarapatti Town Panchayat 1983 L.W. Crl. 352 considering both the provisions together, has
held that on a proper reading of Section 165 and 166 of the Act, it was clear that Section 166 was subject to the provision contained in Section
165 and that the three months period of limitation prescribed in Section 166, will not apply to taking out distraint proceedings or the filing of the
suit or the launching of the prosecution in respect of any tax or other sum due to a panchayat or panchayat union council. Section 165 is a special
provision, dealing with proceedings in respect of any tax or other sum due to the Panchayat. The Respondent therefore has six years'' time to
institute the prosecution, which therefore is well within time.
It was finally urged that Section 121-B of the Act empowers the Executive Officer to deduct at the source, Profession Tax without launching a
prosecution, whereas power is also given to launch prosecution and no guidelines have been given, as to under what circumstances tax could be
deducted at the source and under circumstances a prosecution should be launched and in the absence of any such guide-lines, the power given to
the Executive Officers becomes arbitrary and is violative of Article 14 of the Constitution. Reliance was placed upon a decision of the Supreme
Court in National Textiles Workers'' Union v. P.R. Ramakrishnan and Ors. 1983 L.W. Crl. 352 .
I am unable to accept this contention. It is not in every case that Profession Tax could be deducted from the source. The Act indicates a
procedure which has to be followed for collecting the tax and in the event of failure to pay, the right to launch a prosecution could be exercised. It
is not the case of the Petitioner, that he would have paid the tax, if it had been deducted at the source. On the contrary, his contention is that, he is
not liable to pay profession Tax and as Exserviceman is exempted from such payment. Further, the vires of any statutory provision cannot be
challenged in proceedings u/s 482, Code of Criminal Procedure. It would be open to the Petitioner to work out his remedies regarding that, in
appropriate proceedings.
Not being able to accept any of the legal contentions put forward on behalf of the Petitioner, this petition is dismissed.