1. This is a revision application against an appellate order of the Judicial Magistrate, First Class, Sakri, which the learned Magistrate passed under Section 113 of the Bombay Local Boards Act, 3923. By that order, the learned Magistrate dismissed the appeal of the present petitioner against a notice of demand issued against him by the District Local Board, West Khandesh, to recover a sum of Rs. 250 as professional tax for money-lending business done by the petitioner during the year 1954-55 pins Rs. 15-10-0 as notice fees.
2. The petitioner is a money-lender and lends monies under a licence issued to him under the Money-lenders' Act. Upon the money-lending business done by him, he is liable to pay a professional tax to the District Local Board, West Khandesh. In giving the notice of demand for the professional tax for the year 1954-55, the Local Board took into consideration not only the money-lending business done by the petitioner in the year 1954-55, but also the unrecovered balance of the monies lent by him in the previous year 1953-54. The learned Magistrate approved of that mode of calculation and dismissed the appeal of the petitioner.
3. In calculating the money-lending business done by the petitioner in the year 1954-55, the learned Magistrate took into account not only the monies lent by the petitioner in the year 1954-55, but also the balance of the business done by him in the previous year. The learned Magistrate illustrated that if a person lent Rs. 1,000 to A, Rs. 1,000 to B and Rs. 1,000 to C in the year 1953-54 and was able to recover Rs. 500 from A, nothing from B and Its. 300 from C, before the end of the year 1953-54, the unrecovered balance of the money-lending done during the year, that is, the balance of Rs. 2,200 should be considered to be the money lent during the next year (1954-55) and, therefore, if the fresh advances made by him during the year 1954-55 amounted to Rs. 3,000, the monies lent by him during that year would be not, Rs. 3,000 only, but Rs. 3,000 plus Rs. 2,200 : Rs. 5,200. and he would be liable to pay professional tax on that amount in 1954-55. In adopting this manner of calculation, the learned Magistrate overlooked the fact that in respect of the amount of Rs. 2,200-the unrecovered balance of the monies lent in 1953-54-the petitioner was being charged the professional tax twice over, once in the year 1953-54 and again in the year 1954-55; and if the said amount of Rs. 2,200 remained unrecovered for three years more, the Local Board would be charging him professional tax upon it thrice over, four times over and five times over. This, in our view, is not a right construction of the word **O;ogkj** occurring in Group 2 of Schedule A to the rules framed by the District Local Board of West Khandesh under the powers conferred upon the Local Board under Sections 99 and 100 of the Bombay Local Boards Act, 1923.
4. In justifying the manner of calculating the money-lending business done by the petitioner in the year 1954-55 upon the assumption that the petitioner had advanced a sum of Rs. 3,000 in the year 1953-54 and had been able to recover Rs. 800 only out of it during that year, the learned Magistrate observed in the course of his judgment:
Though the sum of Rs. 2,200 is a balance at the end of the year 1953-54, still the appellant is going to receive the interest on this sum at the prescribed rate during all the subsequent years till the debt is repaid to the last pie... If any sum is lent it becomes the sum loaned not only in the year in which it was actually paid to the debtor, but during all the years till it is finally repaid in full...loan advanced in one year is the loan advanced for the next year also if it is not repaid during that year and so on... So long as the creditor continues to receive interest on such sum, that sum must be considered as the turn over of that particular year. It is surely inequitable that the creditor should go on receiving interest from year to year while the Board should receive its legitimate tax only for one year.
The reasoning of the learned Magistrate, which is contained in his observation 'though the sum of Rs. 2,200 is a balance at the end of the year 1953-54, still the appellant is going to receive the interest on this sum at the prescribed rate during all the subsequent years till the debt is repaid to the last pie' and the conclusion based upon that reasoning, namely, that theunrecovered balance of the money-lending business done in a previous year can also be taken to be monies lent in the succeeding year are hardly sound. It is true that on the unrecovered balance of Rs. 2,200, the petitioner would receive interest until the amount is recovered by him, but he is not getting away with it without having to pay tax upon it. He would have to pay income-tax upon it. Besides, merely because the petitioner would continue to receive interest on theunrecovered balance of the amount lent by him, the amount initially lent by him could by no reasonable construction be said to have been advanced twice, thrice, four times and even many more times by him. The money-lending transaction, that is the **O;ogkj** in terms of Group 2 of schedule A to the rules framed by the District Local Board of West Khandesh, would in such a case be only one. If, therefore, monies are advanced in succeeding years, that is, if fresh 'vyavaharas' are done, those would be liable to professional tax; but one and the same advance or 'vyavahara' cannot be multiplied by the number of years during which it remains unpaid and cannot in that manner become several 'vyavaharas'. If we may adopt the analogy of the income-tax, it is but too well-known that once a particular income is taxed, the same income cannot be taxed over again. Similarly, if monies advanced in a particular year are charged a professional tax, that particular money-lending transaction, assuming that all the monies lent in that year are not recovered during the course of that year, cannot be said to be a fresh advance in the succeeding year and cannot he made a subject of a professional tax during that year.
5. The learned Magistrate's observation 'if any sum is lent, it becomes the sum loaned not only in the year in which it was actually paid to the debtor but during all the years till it is finally repaid in full' is patently unsound. A continuing loan or a balance of loan remaining unpaid cannot be considered a fresh loan every year until the initial loan is wiped out. In that case, assuming that no repayment of the original loan is made for five years and the whole of the initial loan is paid off in one lot in the sixth year, the professional tax would be levied, not on one loan, but on five such loans. The initial loan cannot in this mariner be multiplied by a number of years during which it remains unpaid, since the multiplication would convert one loan into several loans. If several loans are freshly advanced, it is a different matter. But the same advance, the only one and the initial advance, which remains unpaid, cannot be turned into several advances or 'vyavaharas' in this manner. The learned Magistrate's further observation 'loan advanced in one year is the loan, advanced for the next year also if it is not repaid during that year and so on' is a fallacious observation. A loan advanced in the year 1953-54, if not repaid, is carried forward to the year 1954-55. But it is the same loan carried forward. In 1954-55, it does not become a new, fresh or another loan, different from the loan of the year 1953-54; and the same loan cannot be taxed twice over, as the same income cannot be taxed twice over as I have already mentioned. The learned Magistrate has then observed:
So long as the creditor continues to receive interest on such sum, that sum must be considered as the turnover of that particular year. It is surely inequitable that the creditor should go on receiving interest from year to year while the Board should receive its legitimate tax only for one year.
This is not a correct angle of vision to adopt while we are on the subject of calculating professional tax. There is no inequity in the Local Hoard not. being able to recover a tax twice, thrice or four times over on. the same one initial advance which is merely carried forward in successive years. For the money-lending' transactions done in the year 1953-54, the professional tax had already been levied on the petitioner in that year. If for the balance which remained in recovered during that year the petitioner is to be charged a professional tax again, it would mean taxing the same money-lending transactions twice over again. This, in our view, could not have been the intention of the District Local Board of West Khandesh when Group No. 2 of Schedule A to the rules was framed by the District Local Board.
6. There is one more point involved in this application and it is as to what should be taken to be a taxing year. If we turn to Rule 2, Clause (10), of the rules framed by the Local Board, it would appear that the year, having regard to which the taxes are to be calculated, is defined in Clause (10), and the definition says that the year would be computed from April 1 of a particular year to March 31 of the next following year. The learned appellate Magistrate has adopted a samvat year as the year for calculating professional tax. This obviously is not a correct way of calculating a professional tax. We direct that for calculating professional tax, the year should be computed from April 1 of a year to March 31 of the next following year.
7. For the reasons stated above, we allow this application and send the papers back to the learned Magistrate with a direction that he should ascertain what were the fresh money-lending transactions which were done by the petitioner in the year 1954-55 and having ascertained the extent of those fresh money-lending transactions done by the petitioner in the year 1.954-55, professional tax upon those transactions should be calculated, bearing in mind that the year should be. computed from April 1, 1954, to March, 31, 1955.
8. The order passed by the learned Magistrate is set aside. The applicant will get his costs from the opponent who will bear his own costs.