GOSWAMI J. - This matter has come to us on a reference by the Income-tax Appellate Tribunal, 'A' Bench, Calcutta, under section 27(1) of the Wealth-tax Act, 1957. The assessment years concerned in this reference are 1957-58, 1958-59, 1959-60 and 1960-61.
Briefly the facts are that the assessees residence is situated at a place known as Makum at a distance of less than five miles from the Tinsukia municipal town limit, but more than five miles from the central point of the Tinsukia Municipality. It is admitted that Makum is a place with a population not exceeding 10,000 and the Tinsukia Municipality has a population exceeding 10,000. The only controversy is whether the assessees house is situated at a distance of more than five miles from the area of the Tinsukia Municipality. The Wealth-tax Officer, who made the original order of assessment, refused to grant the exemption on the ground that the assessees residence was less than five miles from the limits of the Tinsukia town. On appeal, the Appellate Assistant Commissioner set aside the order of the Wealth-tax Officer and allowed the exemption holding that the assessees residence was more than five miles from the central point of the municipality. The Income-tax Appellate Tribunal also confirmed the order of the Appellate Assistant Commissioner and it held that when a place is said to be at a particular distance from a certain town the distance is usually reckoned from a central point in that town. On this view of the matter, the Tribunal allowed the exemption, and hence this reference by the Tribunal at the instance of the department on the following question of law :
'Whether, on the facts and in circumstances of the case, the Tribunal was right in holding that the assessees dwelling house was exempted from wealth-tax under section 5(1)(iv) of the Wealth-tax Act, 1957, as it was situated at a distance of more than five miles from a central point of the municipality whose population exceeded ten thousand ?'
The answer to the question will depend upon the interpretation of section 5(1)(iv) of the Wealth-tax Act, 1957, hereinafter referred to as the Act, before its amendment in 1964. Section 5(1)(iv) as it stood before the amendment is as follows :
'5. Exemption in respect of certain assets. - (1) Wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee....
(iv) one house belonging to the assessee exclusively used by him for residential purposes and situate in any place with population not exceeding ten thousand and which is a more than five miles distant from any area for which there is a municipality the population whereof exceeds ten thousand;.....'
This provision indicates that during the relevant time, a residential house within the municipal area ways not under any exemption. A residential house in order to attract the exemption clause will have to be, firstly, in a place where the population does not exceed ten thousand, and, secondly, that it must be situated at a distance of more than five miles from the municipal area, and, thirdly, that the municipality from which the distance is calculated must have a population exceeding ten thousand. As noted above, there is no controversy regarding the population clauses. The only point that requires to be determined is whether the residence of the assessee is at a distance of more than five miles from the municipals area. This at once brings us to the wording of the proviso (iv) to section 5(1) of the Act.
Mr. Bhattacharjee, the learned counsel for the department, drawn our attention to section 9 of the Assam Municipal Act, 1956. Replying on this section, he submits that the Wealth-tax Officers order calculating the distance of the residence of the assessee from the limits of the area demarcated under section 9, is a perfectly valid order. Mr. Choudhury, the learned counsel for the assessee, on the other hand, submits that the Appellate Assistant Commissioners order, which is confirmed by the Tribunals, is the only legal and reasonable order which could be passed under section 5(1)(iv) of the Act. Apart from relying on the distance shown in the motoring guide of the Automobile Association, which was also taken into consideration by the Tribunal, he drawn out attention to supplementary rule 32 made by the Governor-General-in Council under the Fundamental Rules. This rule may be quoted :
'S.R. 32. The point in any station at which a journey is held to commence or end is the chief public office or such other point as may be fixed for the purpose by a competent authority.
NOTE. - A journey on transfer begins and ends at the actual residence of the Government servant concerned.....'
It also appears that for the purpose of this rule, the Government of Indias orders are that the principal post office in any station should be considered as the chief public office and consequently as the fixed point, in respect of the commencement and end of the journeys of all officers of the Indian Posts and Telegraphs Department. A perusal of this rule would clearly show that for the purpose of travelling allowances, a provision has been specifically made under this rule to indicate the point in any station from which the calculation has to be made. There is, therefore, no difficulty when such a provision has been made under the rule to make the necessary calculation, or to determine the place from where the journey commences and where it ends. The position under the Wealth-tax Act is, however, different. No rule has been pointed out to us specifically mentioning that the distance of the assessees residence from the nearest municipal area is to be calculated from a particular point in the municipality or, for the matter of that, from the central point, as has been held by the Tribunal. That being the position, we are left with clause (iv) of section 5(1) as it is and we have got to see whether such an interpretation is possible on the terms of the section. The General Clauses Act, 1897, also doses not come to our assistance in this respect, as section 11 therein only provides for measurement of distances in a straight line on a horizontal plane but has not mentioned any particular point from which the distance has got to be measured. It is clear that whenever a distance has got to be measured from one point to another, it is absolutely necessary to know the two points, namely, the terminus a quo and the terminus ad quem. Reading section 5(1)(iv), there can be no doubt about the terminus ad quem, which is the residence of the assessee. What is then the terminus a quo, namely, the starting point The words 'from any area' for which there is a municipality must be given its proper meaning. The area of a municipalily is clearly demarcated under the provisions of the various Municipal Acts in different States. To take for instance the provision of the Assam Municipal Act, 1956, section 4 is as follows :
'4. (1) The State Government may, by notification in the official Gazette and by such other means as it may determine, declare its intention -
(a) to constitute any town together with or exclusive of any railway station, village, building or land contiguous to any such town, municipality under this Act;
(b) to include within a municipality any local area contiguous to the same;
(c) to exclude from a municipality any local comprised therein; or
(d) to withdrawn the whole area comprised in any municipality from the operation of this Act :
Provided that no municipality under this Act shall include any military cantonment or part of a military cantonment.
(2) Every notification published under sub-section (1) shall define the limits of the local area to which it relates.....'
Section 5(2) of the Assam Municipal Act may be noticed :
'(2) When sixty days from the date of the publication of the notification have expired, and after considering any objection which may be submitted, the State Government may by notification,
(a) constitute the local area or any specified part thereof to be a municipality under this Act, or
(b) include the local area or any part thereof in the municipality or exclude it therefrom, or
(c) withdraw the whole area comprised in the municipality from the operation of this Act, as the case may be.'
Section 9 of the Assam Municipal Act also be noticed in this connection :
'9 Every Municipal Board already existing and every municipality newly constituted under this Act and every municipality whose local limits are altered, shall cause to be erected and set up and thereafter maintain substantial boundary marks defining the limits or the altered limits of the area subject to its authority, as set out in any notification published under this Act.'
It is thus clear from the above provisions of the Assam Municipal Act, that the area of the municipality is statutorily determined and demarcated in accordance with the provisions of the law. As noted above, section 9 provides for erection and maintenance of boundary marks. The limits of the area of the municipality are well defined and there can be no doubt or vagueness about the area. Once a particular distance is to be determined, the two termini, as noted above, have got to be clearly known. The limit of the municipality will cover the entire area of the municipality. There is nothing in section 5(1)(iv) of the Act to warrant the interpretation that the limit from which the distance exceeding five miles has to be determined, must be from the central point of the municipality. Mr. Choudhury argues that there is no warrant either for interpreting the section to mean only the limits of the municipality. This argument, however, is not tenable. The section clearly postulates that exemption is allowed in respect of a house situated in a palace with a population not exceeding ten thousand and which house is more than five miles distant from the municipal area with a population exceeding ten thousand. Shorn of the unnecessary details for our purpose, in brief, the house must be at a distance of more than five miles from the municipal area. This distance cannot be determined until the last limit of the municipality is taken into account. The word 'area' is significant. This word also appears in the provisions of the municipal law in this behalf. We are not impressed by the fact that the motoring guide has given the distance between Tinsukia and Makum as 5 1/2 miles or that under the supplementary rules, travelling allowance has been allowed to be determined from a central point as notified by the Government. The distance given in the motoring guide cannot be a safe criterion in interpreting the provisions of section 5(1)(iv) of the Act, nor can be supplementary rules give any guide in the matter. Those rules will have to be understood in relation to the subject-matter and the purposes for which those rules have been made. We are, therefore, unable to hold that we can in law reply on the usual practices of taking the distance from the central point in a town to be a proper criterion in law in measuring the distance under section 5(1)(iv) of the Act. That being the position, the distance of the assessees residence has to be measured from the limit of the municipal area and not from the central point of that area. The word 'from' is sufficiently exclusive to exclude the entire area of the municipality in measuring the distance from the limit thereof to the residence of the assessee. In this context we may also notice that some curious result will follow if the central point in a municipal area is taken to be the point from which the distances has to be measured in the absence of a clear direction in that behalf. If a municipal area is sufficiently long from east to west and from north to south is very narrow, in that case if the central point is taken as the criterion for measuring the distance, then an assessees house on the east and west of the Municipality will be exempted even though perhaps it is close to the border of the municipality, whereas an assessee on the north and south of the municipality, who is at the same distance from the border, will not be so exempted, because the area of the municipality in breadth is narrow, while in length it is not so. If however, five miles is calculated from the limits, there will be only one equal standard for all. Whoever is at a distance of more than five miles of the border - east, west, north or sough - will be exempted from the assessment. It may be mentioned here that no authorities could be cited at the Bar regarding interpretation of the above provision under the Wealth-tax Act and the matter appears to be one of first impression. We are, however, absolutely satisfied that under section 5(1)(iv) of the Wealth-tax Act, the distance of the assessees houses has to be measured from the limit of the municipality and not from the central point in the town. We have, therefore, no hesitation in answering the question in the negative and holding that the Tribunal was not right in holding that the assessees dwelling house was exempted from wealth-tax under section 5(1)(iv) of the Wealth-tax Act.
The reference is answered accordingly, but we make no order as to costs.