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Judgment
R.S. Pathak, C.J.—By this writ petition the petitioners pray for the quashing of proceedings for recovery of the tax levied on them under the Punjab Professions, Trades, Callings and Employments Taxation Act, 1956.
The petitioners are employed in various Government departments in Simla. They have been charged to tax under the a foresaid Act for the financial year 1967-68, and the Respondents are pressing for payment of the tax. The Act was repealed with effect from April 1, 1967. The petitioners pray for the quashing of the recovery proceedings.
The Respondents admit that the Act was repealed on April 1, 1967. It is also admitted that the charge has been levied for the financial year 1967-68. They contend that the charge is permissible inasmuch as the income on which the tax has been charged accrued during the financial year 1966-67 when the Act was still in force.
In my opinion, the petitioners are entitled to succeed.
Section 3 of the Act provides:
Levy of tax.- Every person who carries on trade, either by himself or by an agent or representative, or who follows a profession or calling, or who is in employment, either wholly or in part, within the State of Punjab, shall be liable to pay for each financial year a tax in respect of such profession, trade, calling or employment:
Provided that for the purpose of this section a person on leave shall be deemed to be a person in employment.
Plainly, according to Section 3 a person is liable to pay for each financial year a tax in respect of his employment. In order to charge the tax, two conditions must co-exist. One is that the Act must be in operation during the financial year, and the other is that the employment must be engaged in during that financial year. On the admitted case of the parties the charge has been imposed for the financial year 1967-68. Inasmuch as the Act ceased to be in operation on April 1, 1967, it is not possible to contemplate any charge for the period thereafter.
It is urged that as the tax has been charged on the basis of the income earned during the year 1966-67, the charge must be treated as valid. In this connection reference has been made to Section 5 of the Act. It reads:
Determination of tax.-The tax payable by any person under this Act shall be determined with reference to his total gross income during the previous year; provided that the tax payable by any person shall not exceed two hundred and fifty rupees for any financial year.
Now, the charge is levied u/s 3 of the Act. Section 5 of the Act deals merely with the quantification of the tax so charged. Unless the charge is permissible, the quantification of the tax is meaningless. It is apparent that if no charge can be levied in the financial year 1967-68, any reference to the income of the previous year 1966-67 is without relevance.
I hold that the petitioners are not liable to pay any tax under the Act for the financial year 1967-68.
The. writ petition is allowed. The proceedings for the recovery of professional tax under the Punjab Professions, Trades, Callings and Employments Taxation Act, 1956 for the financial year 1967-68 are quashed. In the circumstances, there is no order as to costs.