The Madras Central Urban Bank Ltd. and The Madras City Co-operative Bank Ltd. vs The Corporation of Madras

Reilly, J.—These cases refer to two Banks which have been registered under the Co-operative Societies Act, namely,"" the Madras Central

Urban Bank, Limited, and the Madras City Co-operative Bank, Limited, both of which carry on their operations in Madras. The Commissioner of

the Corporation of Madras demanded profession tax from these two Banks tinder Section 111 of the Madras City Municipal Act of 1919. Under

that section only persons who are not liable to companies'' tax u/s 110 of the Act are liable to profession tax. Both the Banks objected to the

Commissioner''s demands, at that stage apparently maintaining that they were liable neither to profession tax nor to companies'' tax. They appealed

to the Standing Committee of the Corporation, which rejected their appeals. Then, under Rule 15 of SchIV of the City Municipal Act they

appealed to the Court of Small Causes and at that stage contended that, if they were liable to be taxed at all, it was u/s 110 of the Act to

companies'' tax, not to profession tax. The learned Chief judge, who heard those appeals, found that the two Banks were liable to pay companies''

tax u/s 110 but not profession tax u/s 111 and therefore allowed the Banks'' appeals. After that decision had been given, the Corporation applied

to the learned judge under Rule 17 of Schedule IV of the Act praying him to state a case to this Court; and the learned Judge has therefore

referred to this Court the question ""whether the appellant Banks are liable for profession tax u/s 111 of the Madras City Municipal Act, 1919.

u/s 110 of the Madras City Municipal Act it is only incorporated companies that are liable to companies'' tax. These two Banks, with which we

are concerned, have been registered under the Co-operative Societies Act and consequently under that Act have become bodies corporate. It

cannot be denied, and is not denied, that they are incorporated bodies. But Mr. Rajamanikkam for the Corporation of Madras contends that these

Banks are not incorporated companies within the meaning of Section 110. It happens that there is no definition of ""company"" in the Madras City

Municipal Act, and, in the absence of such a definition, Mr. Rajamanikkam asks us to apply the definition of ""company"" in the Madras District

Municipalities Act of 1920. He urges that the Madras District Municipalities Act was made only a few months after the City Municipal Act: the

two Acts were made by the same Legislature: they both deal with the constitution, organisation, duties and powers of Municipal bodies: they both

introduced a new form of tax called companies'' tax. Though the Madras District Municipalities Act was made later than the, Madras City

Municipal Act, Mr. Rajamanikkam urges that it may be considered to be in pari materia and that in the circumstances, in the absence of any

definition of ""company"" in the Madras City Municipal Act, we may legitimately use the definition of ""company"" in the Madras District Municipalities

Act, which 1 may mention would exclude these particular Banks registered under the Co-operative Societies Act. The question in what

exceptional circumstances and to what extent the definition of a word in a subsequent Act may be used in the interpretation of that word in an

earlier Act is a very difficult one. But fortunately I do not think it necessary for us to discuss that question on this occasion. It has been pointed out

by Mr. Subbaroya Aiyar, who appears for one of the Banks, that the definition of ""company"" in the Madras District Municipalities Act, on which

Mr. Rajamanikkam relies, was not introduced for the first time in regard to District Municipalities in the Act of 1920. The very same definition of

company"" was in the Madras District Municipalities Act of 1884. His contention therefore is that the provincial Legislature had for purposes of

District Municipalities defined the word ""company"" in 1884; when the City Municipal Act was madein 1919 the Legislature had that definition of

''company"" before them but chose not to adopt it. And it may be remarked that they did not adopt it in the earlier City( Municipal Act of 1904.

That being so, I think we are certainly entitled to contrast the action of the Legislature in the City Municipal Acts and in the two District

Municipalities Acts and to attach some significance to the fact that deliberately, so far as we can see, they avoided adopting the definition of

company"" in the Madras District Municipalities Act of 1884 when they were making the City Municipal Act of 1919. And we must remember that

in the Madras City Municipal Act the expression with which we are concerned is ""incorporated company"". That expression is not used in either of

the District Municipalities Acts in connection with taxation. In my opinion this is not a case in which we can make use of the definition of ""company

in either of the Madras District Municipalities Acts, and apply it to the words '' ""incorporated company"" in the City Municipal Act of 1919. In the

circumstances such an application of the definition of ""company"" in other Acts appears to me quite unjustifiable.

What we are concerned with is the meaning of the expression''""incorporated company"" in Section 110 of the City Municipal Act. Mr.

Rajamanikkam, as I understood him, at first contended that those words meant a company incorporated under the Indian Companies Act. But at a

later stage he was compelled to modify that contention and to admit that the Corporation claims u/s 110 of its Act to collect companies'' tax from

companies other than those incorporated under the Indian Companies Act--from companies incorporated anywhere, which by conducting business

in Madras become liable to that tax. He has urged however that the Banks with which we are concerned are not companies: they are societies

registered under the Cooperative Societies Act. And he has pointed out that in Section 18 of the Act, when a society is registered and so becomes

incorporated, it is described not as an ""incorporated company but a ""body corporate."" Now it is quite true that the words ""body corporate"" are not

equivalent to the words ""incorporated company"". An ""incorporated company"" is a body corporate; but many ""bodies corporate"" are not

incorporated companies."" But can we build anything upon the use of the words ""body corporate"" in Section 18 of the Co-operative Societies

Act? As Mr. Subbaroya Aiyar has pointed out, u/s 23 of the Companies Act itself it is provided that from the date of incorporation, that is the date

of registration under that Act, the subscribers to a company shall be a ""body corporate"". I do not think wecan possibly agree with the argument

that, because in Section 18 of the Co-operative Societies Act a society registered under that Act and so incorporated is described as a

body''corporate,"" the very description applied by the Companies Act to a company registered under that Act, therefore such a society is not an

incorporated company.

We must turn again, I think, to the words ""incorporated company"" themselves. There is no dispute about the meaning of ""incorporated"" in these

cases: the dispute is about the meaning of the word ""compjmy"". ""Company"" in its ordinary, nontechnical, non-metaphorical sense means a body of

persons associated for a common object for some business or other purpose. These Banks, with which we are concerned, satisfy that definition. In

The Queen v. The Registrar of Joint Stock Companies (1891) 2 Q.B. 598. Lmdley, L.J., referring to a business or trading company, said that he

understood a company to mean an association of members of which the shares were transferable. That definition or description also is satisfied by

these Banks, as their shares are transferable, though under certain restrictions. But Mr. Rajamanikkam has pointed out to us that irr The Great

Northern Railway Company v. The Coal Co-operative Society (1896) 1 Ch. 187, Vaughan Williams, J., decided that a co-operative society,

registered in England under the Industrial and Provident Societies Act and undoubtedly thereby incorporated and having all the essential

characteristics of a corporation, was not an ""incorporated company"" within the meaning of Section 17 of the Bills of Sale Act of 1882. Under the

Bills of Sale Act debentures charged on other than real property had to be registered, that provision being enacted for the prevention of fraud; but

Section 17 of that Act exempted ""incorporated companies"" from the necessity of registering their debentures. It was argued that the Coal Co-

operative Society was an ""incorporated company"" within the meaning of that section and so its debentures were exempt from registration under the

Bills of Sale Act. Vaughan Williams, J., decided that the society was not an ""incorporated company"" in that sense and that in effect the words

incorporated company"" in Section 17 of the Bills of Sale Act meant only a company incorporated under the Companies Act. One reason which

he gave for his interpretation that ""incorporated company"" in that section meant only a company incorporated under the Companies Act was that

by the provisions of the Companies Act the debentures of such a company had to be registered in a register which was open to any creditor for

examination, and therefore there was no necessity for the Legislature to require the debentures of such incorporated companies to be registered

again under the Bills of Sale Act. But the learned Judge gave another reason for his decision, namely, that the Coal Co-operative Society, though

incorporated, bore the name of ""Society,"" not the name of ""Company"" and that the word ""Company"" had by 1882, the date of the Act in question,

acquired a very well-recognised legal meaning, which would exclude such a society. Although the learned Judge gave both these reasons for his

decision, he clearly stated that the reason which I have given as the second one was alone sufficient to support it. Now, if that decision can

properly be applied in this country, it is undoubtedly a powerful weapon in Mr. Rajamanikkam''s hands.

But with diffidence and with great respect to that learned Judge 1 may perhaps venture to say that the reason for his decision which I have

quoted first appears to me the stronger one. And I may mention that, although Vaughan Williams, J., in that case said that the word ""company"" had

such a well-recognised legal meaning, in Stanley, In re. Vermont v. Stanley (1906) 1 Ch. 131 Buckley, J., himself an eminent authority on the

subject of Companies said that ""company"" had no strictly technical meaning. Now can we and ought we to apply Vaughan Williams, J.''s view in

this country and in the interpretation of the City Municipal Act? What Vaughan Williams, J., in effect said in that decision was that by 1882, the

date of the Bills of Sale Act, the word ""company"" in England had come to have such a well-recognised legal meaning that he could safely assume

that the Legislature was aware of that meaning and had adopted it in the use of words ""incorporated company"" in that Act. Can we properly say

that in this country the Legislatures have recognised and adopted a definite legal meaning as attaching to the word ""company""? I think it is not

difficult to show that they have not done so. ""Company"" is a word which occurs in a number of Acts, and its precise meaning is of great importance

in them. We have both the Imperial and Provincial General Clauses Acts to assist the Legislatures and others in the use of words which appear

frequently in legislation. In neither of those Acts is there any definition of ""company"". But in three important Acts of the Central Legislature the

word ""company"" is defined in three different ways, namely, in the Indian Companies Act, in the Income Tax Act and in the Land Acquisition Act.

The definitions in the two latter Acts include Societies registered under the Co-opePative Societies Act; and under the Land Acquisition Act

societies registered under the Co-operative Societies Act have been explicitly included by an amendment made in 1919. I think it very doubtful

whether Vaughan Williams, J., himself, if he had been asked to interpret the meaning of the word ""company"" in India, would have been able to say

that it had any restricted and well-recognised legal meaning, which could be adopted apart from the context in which it appeared in any particular

enactment.

Mr. Subbaroya Aiyar has drawn our attention to Scheduel V of the Madras City Municipal Act of 1904, which immediately preceded the

Municipal Act of 1919. In that Schedule among the persons liable to profession tax, there being no companies'' tax at that time, were included

Joint Stock Companies and other Companies carrying on any trade or business having gain for their object or as benefit societies. These Banks

would clearly be included among such companies. Now, as I have mentioned, when the City Municipal Act of 1919 was made, a new tax, the

companies'' tax, was introduced, and certain companies, which under the previous Act would have been liable to profession tax, were exempted

from the tax and made liable to companies'' tax, and the companies so made liable to companies'' tax and exempted from their previous liability to

profession tax were merely described in Section 110 as incorporated companies. I think Mr. Subbaroya Aiyar is justified in urging that from those

facts we may properly infer that the effect of Section 110 was intended to be that any company which was liable under the earlier Act to

profession tax was exempted from that profession tax and made liable to companies'' tax subject only to one condition, namely, that it was an

incorporated company.

My conclusion in this matter is that we are not justified in restricting the words ""incorporated company"" in Section 110 of the Madras City

Municipal Act so as to exclude these two Banks, with which we are concerned. In my opinion, our answer to the learned Judge''s question should

be that the two Banks are not liable to profession tax u/s 111 of the Act.

Anantakrishna Aiyar, J.

The Madras Central Urban Bank, Ltd. (Reference No. 9) and another similar Bank, The Madras City Co-operative Bank, Ltd. (Reference No.

10), both registered under the Co-operative Societies Act (II of 1912), were assessed to profession tax by the Corporation oi Madras u/s 111 of

the Madras City Municipal Act (IV of 1919). The two Banks concerned objected to the levy of profession tax u/s 111 and appealed to the

Standing Committee of the Corporation of Madras. Not having got relief there, the Banks appealed to the Court of Small Causes, Madras, under

Rule 15 of the rules, Part V of the City Municipal Act. The learned Chief Judge of the Count of Small Causes was of opinion that the Banks

concerned in the case did not come within the provisions of Section 111 of the Act. The Corporation of Madras applied under Rule 17 to have the

question of law referred to the decision of the High Court, and having deposited the amount of costs of the reference, the learned Chief Judge has

referred to the High Court the question whether the levy of profession tax on these Banks u/s 111 of the Madras City Municipal Act was legal, the

contention of the Corporation being that section ''ill applies to these cases and not Section 110 of the Act.

When these cases were called, Mr. Subbaroya Aiyar, who appeared for the Madras Central Urban Bank, Limited, claimed the right to begin.

The learned Advocate argued that the appeal to the Court of Small Causes was filed by the Bank, that the reference must be taken to be in

substance a continuation of the appeal,'' and as the appellant in the Court of Small Causes he was entitled to begin.

Mr. Rajamanikkam, who appeared for the Corporation of Madras, on the other hand claimed the right to begin, urging that the learned Chief

Judge of the Court of Small Causes had decided the appeal against the Corporation of Madras under Rule 17, that the learned Judge directed the

deposit by the Corporation of the costs of the reference, and the Corporation having deposited the amount as required, the Corporation should be

taken to be the party aggrieved by the decision of the Court of Small Causes and has therefore the right to begin. We agree with the contention

raised on behalf of the Corporation, and upheld the right to begin claimed by Mr. Rajamanikkam. Mr. Subbaroya Aiyar argued that in references

made u/s 66 of the Income Tax Act, the assessee has been held entitled to the right to begin, and that similarly the Banks who are the assessees

here should be held to have the right to begin. We are unable to agree with that contention.

The assessee in a reference under the Income Tax Act has, no doubt, been given the right to begin in cases where the Commissioner has

decided the case against the assessee and the assessee thereupon deposited the costs of reference and applied to the Gammissioner to refer the

question of law to the High Court. The assessee in such a case is practically in the position of an appellant, and the reference to the High Court is in

substance in the nature of an appeal or revision ''to the High Court. The assessee who is given the right to claim a reference under certain

conditions by Section 66 of the Income Tax Act fulfils the conditions, and the decision of the Commissioner being against him he is naturally given

the right to -.begin when the High Court hears the reference. But that reasoning will not apply to the case of the Banks concerned with the

reference now before us, because the Banks have succeeded in their appeals to the Court of Small Causes and have got decisions in their favour.

It is the Corporation that is dissatisfied with the decision, and having complied with the provisions of Rule 17 claimed the reference. The position of

the Corporation is virtually that of an appellant, and the nature of the reference is really one in the nature of an appeal. The party aggrieved by the

decision of the Court of Small Causes has got the right to begin in these references, just as the party aggrieved by the decision of the Commissioner

of Income Tax has got the right to begin in a reference u/s 66 of the Income Tax Act.

This view is supported by the reasoning of the Full Bench in Board of Revenue, Madras v. Ramanadhan Cheity ILR (1919) 43 M. 75 : 37

M.L.J. 663 (S.B.). The question before the Full Bench arose in connection with a reference made u/s 51 of the Indian Income Tax Act (VII of

1918). The Full Bench held that the assessee on whose application the reference was made by the Board of Revenue was entitled to be heard first

in the reference to the High Court. The Full Bench observed on this point as follows:

The Board of Revenue under the section is bound to refer the duestion on an application made for the purpose by the assessee, and when the

question is referred to the High Court, the High Court after hearing the case is to deliver judgment, and the judgment so delivered will be sent to

the revenue authorities. There is no ruling on the point and we have not been able to ascertain whether there has been any uniform practice on any

similar reference, but having regard to the nature of the reference in this case and how it originated, that is, on the motion of the assessee who is

aggrieved by the order of the revenue authorities, we are of opinion that the assessec''s pleader ought to be heard first""--see page 76 of the

Report.

We accordingly asked Mr. Rajamanikkam who appeared for the Corporation of Madras to begin.

The question on the merits turns on the construction to be: placed on Section 110 of the City Municipal Act. u/s 110,

Every person not liable for companies tax, who, within the city exercises a profession, art, trade or calling...shall pay by way of licence fee and in

addition to any other licence fee that may be leviable under this Act a tax as determined under the said rules, but in no case exceeding Rs. 500 in

the half year; and such tax may be described as the profesion tax. u/s 110.

Every incorporated company transacting business within the city for profit or as a benefit society shall pay by way of licence fee a half-yearly

tax on its paid-up capital on the scale shown in the taxation rules in Scheduel IV tot in no case exceeding Rs. 1,000.

The contention, of the Corporation is that the Banks in question do not come under the description ""incorporated company"" mentioned in

Section 110 and that they are accordingly liable to pay profession tax u/s 111. It is only if the Banks are not liable for companies'' tax u/s 110, that

they would come u/s 111. Are these Banks ""incorporated companies"" within the meaning of Section 110?

It was contended by Mr. Rajamanikkam onbehalf of the Corporation that the word ""company""'' occurring in Section 110 should have; the

same meaning as that given to the word ''company'' in the Madras District Municipalities Act (V of 1920), and he referred us to the definition of

the word ""company"" in Section 3(8) ''of the District Municipalities Act, viz., ""company"" means ""a company registered un''der the Indian Companies

Act, 1913 or under the Acts of Parliament known under the collective title of the Companies Act or incorporated by the Act of Parliament or of

Governor-General in Council or by Royal Charter or by Letters Patent."" The Banks in question have not been registered under the Indian.

Companies Act, 1913, but were registered under the Co-operative Societies Act (II of 1912). It was also argued that the Banks could not be said

to be incorporated by an Act of the Governor-General in Council since there are no special Acts of the Governor-General in Council incorporating

these Banks. It was also contended that registration under the Co-operative Societies Act does not amount to ''being incorporated by an Act of

the Governor-General in Council; and reference was made in this connection to In re Smith. Davidson v. Myrtile (1896) 2 Ch. 590 where it was

held by Kekewich, J., at page 595, that ""the expression ''company incorporated by Act of Parliament'', as used in the will in question (before him),

was not equivalent to ''company incorporated by registration under the Companies Act, 1862.

On behalf of the Corporation, strong reliance was placed on the decision in The Great Northern Railway Co. v. The Coal Co-operative

Society (1896) 1 Ch. 187 where Vaughan Williams, J. observed at page 194 as follows:

The word ''company'' has come to have a very well reedgnised meaning. There are various legal companies, but this industrial society does not

come within the connotation of that word in any of its accepted legal meanings.

The above observations of Vaughan Williams, J., were followed in North Wales Produce and Supply Sosiety, In re (1922) 2 Ch. 340 by P.O.

Lawrence, J. The question for decision in those two cases was whether the debentures issued by a society registered under the Industrial and

Provident Societies Act and charging the societies'' personal chattels by way of security for the payment of money were not exempted by Section

17 of the Bills of Sale Act, 1878--Amendment Act, 1882--from the statutory requirements in respect of Bills of Sale. Vaughan Williams, J�,

answered the question in the negative on two grounds. The first was that the Legislature may very well have drawn the line between the Companies

in respect of which there is a statutory provision as to registration of securities and corporations in respect of which there is no such provision. The

second ground was that a society registered under the Industrial and Provident Societies Act did not come within the connotation of the word

company"" in any of its accepted legal meanings. Each of these two grounds would of itself be sufficient to support the actual decision in the case.

But it is clear that the learned Judge thought that each ground was good by itself to sustain the decision. There are no further reasonings in North

Wales Produce and Supply Society, In re,13 which simply followed the decision in The Great Northern Railway Co. v. The Coal Co-operative,

Society (1896) 1 Ch. 187 as the Corporation concerned there was; also registered under the Industrial and Provident Societies Act.

On behalf of the Banks, our attention was drawn to two other English decisions, by the learned advocate Mr. Subbaroya Aiyar. In The Queen

v. Registrar of Joint Stock Companies (1891) 2 Q.B. 598 the Court of Appeal made certain observations which are relevant to the present case.

Lindley, L.J., observed at page 610 as follows:

I understand by a company--an unincorporated company--some association of members the shares of which are transferable. As distinguished

from a partnership, I know of nothing else except the transferability of shares. A company generally consists, of course, of more than a few

people."" In Stanley, In re. Tennant v. Stanley Buckley, J., observe (1896) 2 Ch. 590:

The wolrd ''company'' has no strictly technical meaning. It involves,. I think, two ideas--namely, first that the association is of persons so-numerous

as not to be aptly described as a firm; and secondly, that the consent of all the other members is not required to the transfer of a. member''s

interest.

We thus see that the meaning of the word ""company"" as-used in England was subject to difference of opinion among the learned Judges in the

cases mentioned above. In fact, turning to Halsbury''s Laws of England, Vol. V, page 12, we find it stated as follows:

It may not be possible to bring within the terms of a logical definition either a company or an association, or that which may in a certain. sense be

implied fly either or both of these words; but it has Been loosely described as the result of an arrangement by which parties intend to form a

partnership which is constantly changing--to-day consisting of certain members and to-morrow consisting of some only of those, members along

with others who have come in--so that there is a constant shifting of the partnership, a determination of the old and a creation of a new partnership,

with the intention that, so far as the partners can by agreement between themselves bring about such a result, the new partnership shall succeed to

the assets and. liabilities of the old partnership. It generally consists of a ijonsiflerable number of persons, and, if it has shares, those shares are

transferable. One of the leading differences between a company and an ordinary partnership is that in ""the former a member can, and in the latter

he cannot, sell his shares without the consent of all the other members.

In footnote (h) to page 13 it is mentioned that the decision in The Great Northern Railway Co. v. The Coal Co-operative Society (1896) 1

Ch. 187 is open to question. It is observed there as follows:

An incorporated industrial and provident society has been held not to be an ''incorporated company'' within the meaning of the Bills of Sale Act,

1878, Amendment Act, 1882, in The Great Northern. Railway Co. v. The Coal Co-operative Society. (1896) 1 Ch. 187. But this decision is

open to question, and, has been disregarded on other points; and it may be observed that a society would seem to be the same thing as an

association, and the terms ''association'' and ''company'' are synonymous.

We now turn to consider what meaning the legislatures in India have attached to the word ""company"". The word ""company"" has not been

defined either in the General Clauses Act (X of 1897) or in the Madras General Clauses Act (I of 1891). It was defined in the Madras District

Municipalities Act (IV of 1884), Section 3(2) as follows:

''Company'' means a company registered under the Indian Companies Act, 1882, or under the Acts of Parliament known under the collective title

of the Companies Act or incorporated by the Act of Parliament, or of the Governor-General in Council or by a Royal Charter or by Letters

Patent.

In the Madras District Municipalities Act (V of 1920) practically the same definition is given. There was no definition of the word ""company"" in

the Madras City Municipal Act (III of 1904) ; nor is there any definition of that word in the present Madras City Municipal Act (IV of 1919). In

the Indian Companies Act (VII of 1913) the word ""company"" is defined in Section 2(2) thus: "" �Company� means a company formed and

registered finder this Act ojr an existing company.

In the Bankers'' Books Evidence Act (XVIII of 1891) the word ""company"" is defined in Section 2(1) thus:

''Company'' means a company registered under any of the enactments relating to companies for the time being in force in the United Kingdom or in

any of the Colonies or Dependencies thereof or in British India or incorporated ,by an Act of Parliament or of the Governor-General in Council or

by Royal Charter or Letters Patent."" In the Income Tax Act (XI of 1922) it is denned in Section 2(6) thus:

''Company'' means a company as denned in the Indian Companies Act, 1913, or formed in pursuance of an Act of Parliament or of Royal Charter

or Letters Patent, or of an Act of the Legislature of a British Possession, and includes any foreign association carrying ''on business in British India

whether incorporated or not, and whether its principal place of business is situate in British India or not, which the Central Board of Revenue may,

by general or special order, declare to be a company for the purpose of this Act.

Turning to the Land Acquisition Act (I of 1894) we find in Section 3(e) the following:

The expression ''company'' means a company registered under the Indian Companies Act, 1882, or under the (English) Companies Act, 1862 to

1890, or incorporated by the Act of Parliament or of the Governor-General in Council, or by Royal Charter or Letters Patent; and includes a

society registered under the Societies Registration Act, 1860, and a registered society within the meaning of the Co-operative Societies Act, 1912.

In the Land Acquisition (Mines) Act (XVIII of 1885), Section 16(b) runs as follows:

''Company'' means a company registered under any of the enactments relating to companies from time to time in force in British India, or formed in

pursuance of an Act of Parliament or by Royal Charter or Letters Patent.

It will thus be noted that the definition or description of the word ""company"" differs materially in various enactments. It is important to note that

the definition in the Land Acquisition Act of 1894 is different from the definition in the Land Acquisition (Mines) Act of 1885. It is no doubt true

that in the Land Acquisition Act of 1894 certain words were added to the definition of the word ""company"" by Act XVII�of 1919, vis., the

words ""and includes a society registered under the Societies Registration Act, 1860 and a registered society within the meaning of the Co-

operative Societies Act, 1912.

When it is mentioned that a particular definition ""includes"" certain things, it should be taken that the Legislature either intended to settle a

difference of opinion on the point or wanted to bring in ''other matters that would not properly come within the ordinary connotation of the word or

expression or phrase in question.

In the matter of The Petition of Nasibun ILR (1882) 8 C. 534 the Court observed:

The word ''includes'' has an extending force, and does not limit the meaning of the term to the substance of the definition.

See Dilwctrtk v. Commissioner of Stamps, Dilworth v. Commissioner for Land and Incomet-tax (1899) A.C. 99 where the Privy Council

observed as follows:

The word ''include'' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the

statute; and when it is so used these words of phrases must be construed as comprehending, not only such things as they signify according to tlieir

natural import, but also those things which the interpretation clause declares that they shall include. But the word ''include'' is susceptible of another

cc-nstruction, which may become imperative, if the context of the Act is sufficient to show that it wasnot merely employed for the purpose of

adding to the natural significance of the words or expressions defined. It may be equivalent to ''mean and include,'' and in that case it may afford an

exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions.

Seeing that the Legislature has chosen not to have a definition of the word ""company"" in the General Clauses Act, and seeing that it defined the

word in several Acts in the way it thought fit for the purposes of each Act, the existence of the definition of the word ""company"" in the two District

Municipalities Acts of 1884 and 1920 and the non-existence of any such definition of the word in the City Municipal Acts of 1904 and 1919 is

significant. The prima. fade inference is that, in the absence of anything to the contrary in the contexts, the word ""company"" has been used by the

Legislature in the City Municipal Act in its ordinary popular sense.

In this connection Mr. Rajamanikkam argued that even if we do not agree with his contention that the word ""company"" in Section 110 of the

City Municipal Act should have the same meaning as the word ""company"" in the Indian Companies Act, still we�should construe the provisions

of Section 110 in the light of the District Municipalities Act of 1920 passed by the same Legislature a few months later, which contains the

definiition of the word ""company"". He argued that these two enactments are in. pan maleria, and that it is relevant to construe the one Act by

reference to the other. I am unable to agree with this contention. In the first place, I am not sure that the two Acts do not deal with circumstances

materially different. The Legislature has for some reasons of its own omitted to have the definition of the word ""company"" both in the City

Municipal Act of 1904 and in the Act of 1919. Knowing that the word ""company"" is defined in the District Municipalities Act of 1884 and seeing

that the District Municipalities Act of 1920 and the

Local Boards Act of 1920 again contain ''the definitions of the word--why was it omitted in the City Municipal Acts of'' 1904 and of 1,919? If

any light is thrown on the question of con--struction of the word as used in the Act of 1919, it must be taken to be thrown more by the Act of

1904 which related to the City of Madras than by the later Act of 1920 which related to the mofussil Municipalities. In the Act of 1904, we find in

Scheduel V, that joint stock companies and other companies carrying on any trade or business having gain for its object or as benefit societies are

liable to be assessed to profession tax on the basis of their capital. In the City Municipal Act of 1919 we find that instead of a profession tax, a tax

on companies is levied u/s 110 on ""every incorporated company transacting business within the city for profit or as a benefit society"" on the basis

of paid-up capital. No doubt there is some change in the wordings of Section 110 from the wordings of Scheduel V of Act III of 1904. u/s 110 it

is only ""incorporated"" companies that are assessable to the tax on companies. There was some discussion as to the meaning of the word

incorporated"". In Wharton''s Law Lexicon, ""incorporation"" is stated to mean ""the formation of a legal body with the quality of perpetual existence

and succession except as limited by the Royal Charter or Act of Parliament effecting the incorporation."" Registration under the Co-operative

Societies Act (II of 1912) satisfies the requirements of the definition of the word ""incorporation"" as given by Wharton, for, u/s 18 of Act II of

1912, ""the registration of a society shall render it a body corporate by the name-under which it is registered with perpetual succession and a

commqn seal and the power to hold property, to enter into contracts, to institute and defend suits and other legal proceedings, and to do all things

necessary for the purposes of its constitution."" See also Section 23 of the Indian Companies Act. See also Section 253 of the Indian Companies

Act which speaks of companies existing before that Act and of other companies which could be registered under that section.

Thus we see that the word ""company"" is not defined in the General Clauses Act and is denned in different ways in different Acts. Some of the

definitions also ""include"" other bodies within their scope for special purposes of particular Acts. In these circumstances, I think the observations of

the Privy Council in the case reported in Adams cm v. Melbourne and Metropolitan Board of Works (1929) A.C. 142 are helpful. Their

Lordships say as follows at page 147:

It is always unsatisfactory and generally unsafe to seek the meaning of words used in an Act of Parliament in the definition clauses of other statutes

dealing with matters more or less cognate, even when enacted by the same Legislature. A fortiori must it be so when resort is had for this purpose

to the enactments of other Legislatures.

''One must therefore look to the ordinary popular meaning of the word ""company"" to understand Section 110 of the City Municipal Act. In

Wharton''s Law Lexicon it is stated that

A company is a body of persons assqeiated for purposes of business, sometimes, but not now so frequently as some years ago, styled a joint

stock company.

I have also consulted Stroud''s Judicial Dictionary, Oxford Dictionary and Bouvier''s Law Dictionary. We find the meaning to be, a body of

persons combined for a common (especially commercial) object. Even if it be limited to commercial bodies and even if the existence of shares

which are: transferable is essential to justify a body being called a ""company""'', these circumstances exist in the case of the two Banks with which

we: are concerned in these two references. In both of them, there are shares which are transferable--subject of course to the rules framed by the

Banks. The two Banks in question would in the above view come u/s 110. Further, it is a well-established rule that fiscal enactments imposing

burdens on subjects ought to be strictly construed, and an assessee is entitled to object to a taxation unless his case is reasonably clearly brought

within the wording of the taxing section.

I have therefore come to the conclusion that the learned ''Chief Judge of the Court of Small Causes was right in his view that the two Banks in

question could not be taxed u/s 111 of the Madras City Municipal Act, and I agree with my learned brother that the references should be

answered accordingly.