1. The petitioner, theNew Swadeshi Sugar Mills Ltd., has filed this petition against the assessment of tax on circumstances and property on it. The petitioner is a public limited company.
2. On the last hearing counsel for the petitioner pressed this point: no tax on circumstances and property can be assessed on a company. In support of his argument he relied on Zilla Parishad Muzaffarnagar v. Baboo Ram, 1970 All LJ 1224. It is the decision of a learned single Judge. He has held that the aforesaid tax cannot be assessed on a company. As we found it difficult to share the view of the learned Judge, we adjourned the hearing of the case in order to enable counsel to be ready for a full fledged argument. We have now heard counsel for the petitioner. Today he has advanced a second point for our consideration. So we are now required to consider two points: (1) whether a company is a person within the meaning of the Zilla Parishad Act and the District Boards Act; (2) Whether tax on circumstances and property can be assessed on a company under the said Acts
3. In this case tax has been assessed by the Zilla Parishad, Allahabad. The Zilla Parishad is governed by the U. P. Kshettra Samitis and Zilla Parishad Act. Section 120 of that Act provides that where immediately before the appointed date there was in force a tax on circumstances and property in any district imposed or continued under the U. P. District Boards, Act, 1922. such tax shall, until abolished or altered with the previous sanction of the State Government, continue to be levied by the Zilla Parishad at the same rates and under the same conditions at and under which it was being levied under the aforesaid Act. There is a further provision that all rules, regulations and byelaws relating to the levy of such taxes in force on the appointed day shall continue in force as if they had been made under this Act. So we have to look to the U. P. District Boards Act (hereinafter called the Act) for deciding the twopoints. Section 108 of the Act provides that a District Board may continue a tax already imposed on persons assessed according to their circumstances and property. Section 114 of the Act regulates the imposition of the tax on circumstances and property. It provides four limitations on the power of imposing the tax. The tax may be imposed on 'any person residing or carrying on business in the rural area provided that such person has so resided or carried on business for a total period of at least six months in the year under assessment. Tax cannot be imposed on 'any person' whose total taxable income is less than Rupees 200/- per annum. The total amount of tax 'on any person' shall not exceed such maximum, if any, as may be prescribed by rule. According to Ss. 108 and 114 tax on circumstances and property may be imposed on a 'person' only. The argument is that a company is not a 'person'. It is said that the word 'person' in those sections means a physical person and not an artificial person. In Zila Parishad Muzaffarnagar, a learned single Judge has accepted this argument. According to him, the word 'person' in Sections 108 and 114 means only a physical person.
4. The word 'person' Is not defined in the Act. ' It is, however, defined in Section 4 (33) of the U. P. General Clauses Act. According to Section 4 (33) 'a person' shall include also a company. The definition in the General Clauses Act will apply to Sections 108 and 114 unless there is anything repugnant in the subject or context.
5. The subject of Sections 108 and 114 is the imposition and assessment of tax on circumstances and property on a 'person'. We are unable to conceive of any repugnancy in this subject so as to exclude the application of the definition. It is necessary for the efficient carrying on of the administration of local self-government that a local body like the Zila Parishad should have a large revenue. Accordingly it is not understandable why artificial persons should be excluded from the purview of the word 'person.' If the argument is accepted, it will result in the exclusion of not only a company but also partnership firms, joint families, and other associations of persons. Such an interpretation is bound to make a large cut in the revenue of a local body like the Zila Parishad.
6. While examining the context of Sections 108 and 114 the learned Single Judge emphasised that in Section 9 of Chapter II, the word 'person' is used for human beings. So he arrived at the conclusion that in Sections 108 and 114 the same word should be deemed to have been used in the same sense. Referencewas made to the meaning of the word 'person' in some other Acts. But we think that that is not decisive. Judicial interpretation of a word in another Act may furnish some guidance in interpreting the same word in another statute. Chapter II deals with the election of members to the Board. Naturally the word 'person' used in that chapter refers to human beings.
7. The immediate context of Sections 108 and 114 should first be examined. Section 109 (4) provides for assessment of a tax on the annual rental value of a holding on the proprietors and tenants. A company may be a proprietor and a tenant. So that tax may be imposed on a company. Similarly a local rate may be imposed on a company which may be a proprietor of an estate under Section 109 (d). Section 113 is significant. It provides that in Section 111 the word 'landlord' shall have the same meaning as it has in the U. P. Local Rates Act, and in Oudh 'shall include also an under-proprietor. a permanent lessee of land ..... and a person whoholds land free of rent in perpetuity.' It is possible for an artificial person like a religious trust to hold land free of rent in perpetuity. Such an artificial person will be covered by Section 113. As the foregoing sections provide for imposition and assessment of the local rate and a tax on a holding, on person, physical as well as artificial, it appears to us that the word 'person' in Sections 108 and 114 should be construed as defined in the General Clauses, Act. We find no repugnancy in the context of Sections 108 and 114 to preclude the definition of the word 'person' in the General Clauses Act. The other provisions in Chapter VI also do not suggest any repugnancy in the context. As there is nothing repugnant in the subject and context of Sections 108 and 114, we are of opinion that the definition of the word 'person' in the General Clauses Act should apply to the word 'person' in Sections 108 and 114. We do not understand how those sections will become unworkable if the word 'person' is given a wider meaning.
8. Section 120 (3) of the Zila Parishads Act provides that recovery of any arrears of the tax on circumstances and property may be made under Chapter VIII of that Act or as arrears of land revenue in the discretion of the Zila Parishad. Chapter VIII is headed as 'Recovery of tax and certain other claim.' Section 148 (1) provides that as soon as a person becomes liable for the payment of any sum on account of tax or any other sum declared to be due under the Act or by any rule or bye-law made under the Northern India Ferries Act to be recoverable in the manner provided by Chapter VIII, the Zila Parishad shall cause a bill to be presented to the person so liable. Sub-section (2) of Section 148 is significant. It provides that 'a person shall be deemed to become liable for the payment of any tax and licence fee upon the commencement of the period in respect of which such tax or fee is payable.' There is little doubt that the word 'person' in this section is used in the wider sense, for a licence may be granted not only to a physical person but also to an artificial person. Section 159 of that Act provides for recovery of any sum 'due as rent from a person' to a Zila Parishad in respect of land vested in or entrusted to its management. Here also we think that the word 'person' is used in the wider sense, for land vested in or entrusted to the management of the Zila Parishad may be let out not only to a physical person but also to an artificial person.
9. To sum up, various provisions of the District Boards Act as well as the Zila Parishads Act clearly show that the word 'person' in the provisions dealing with taxation refers not only to a physical person but also to an artificial person like a company.
10. The other argument also cannot be accepted. The argument is developed in this way: the company is an inanimate being. Certain provisions in Chap. VI of the District Boards Act indicate that only a human being, is to be assessed. The argument is rested on the use of the pronoun 'he' in those sections. It is said that the pronoun 'he' may include 'she' but cannot include 'it.' The reasoning already given for rejecting the first point will necessarily lead to the rejection of the second point. For if the word 'person' includes a company also, as we have already held, then the pronoun 'he' should be construed to include the pronoun 'it' also. Ordinarily, there is no difficulty in including the pronoun 'it' in the pronoun 'he'. 'He' and 'it' are sometimes interchangeably used for inanimate and beings.
11. There is no force in this petition and accordingly it is dismissed.