1. This is a plaintiffs' appeal and arises out of a suit for a declaration and injunction. The plaintiffs are the owners of certain motor lorries plying on hire and carrying passengers between Delhi and Garhmuktesar. The road lies along an area within the jurisdiction of the District Board of Meerut. Certain taxes on 'circumstances and property' were imposed upon the plaintiffs for the years 1939, 1940 and 1941 by the District Board of Meerut. They took exception to this imposition, but the District Board repelled their objection. Then they made certain representation to the local Government, but they failed even there. The present suit was then instituted for the reliefs mentioned above.
2. The case of the plaintiffs was that they did not fall within the mischief of Section 114(a), District Boards Act (local Act, No. X of 1922) in that they 'neither resided nor carried on business in the rural area....' The defence, inter alia, was that the suit was not within the competence of the civil Court and the tax was properly levied upon the plaintiffs.
8. The learned Third Additional Munsif held that the civil Court had jurisdiction to try the matter, but dismissed the suit on the merits. This judgment was affirmed, on appeal, by the learned Judge of the Court of Small Causes. The plaintiffs are before us in second appeal.
4. It is contended by their learned Counsel that, whatever business the plaintiffs carry on, they transact it either, at Delhi or Garhmuktesar, that is at the two termini and not at the intervening places. All that they do is to pick up stray passengers, but this does not amount to carry on business within the meaning of the Act.
5. Business is something larger than trade. The learned counsel, however, relies upon Lovell & christmas, Ltd. v. Commr. of Taxes (1908) 1908 A.C. 46 at P. 51 and, in particular, upon the following observations of Sir Arthur Wilson:
One rule is easily deducible from the decided eases. The trade or business in question in such oases ordinarily consists in making certain classes of contracts and in carrying those contracts into operation with a view to profit, and the rule seems to be that where such contracts, forming as they do the essence of the business or trade, are habitually made, there a trade on business is carried on within, the meaning of the Income-tax Act, so as to render the profits liable to income-tax.
6. In our opinion this case does not afford a parallel to the case before us. It was case of income-tax and their Lordships were considering the question of the place where the profits were to accrue. Profits might accrue at any place from where the business is controlled or where the head office is located, but the business will be deemed to be carried on wherever it is transacted and, in the present case, we are called upon only to consider the question of business and not of profits.
7. The other case relied upon by the learned Counsel is Bombay Co. Ltd. v. Municipal Concil, Dindigul : AIR1929Mad146 . The learned Counsel for the respondent contends, in reply, that, in the first place, an enactment like the present, ought not to be strictly construed against the corporation and relies upon Soady v. Wilson (1835) 42 R.R. 379 at p. 385; Bramwell v. Lacy (1879) 10 Ch. D. 691 at p. 694 and Branson v. Municipal Commrs. for Town of Mardras ('80) 2 Mad. 362 (F.B.) at p. 382. The last was a Full Bench case. Innes and Muttusami Ayyar JJ. held one view, whereas Kernan J. held a different view. The majority, however, held - and this we find from the judgment of Muttusami Ayyar J at page 382:
I may refer to a few remarks made by Lord Cairns in the House of Lords in connection with fiscal legislation. In expressing an opinion on a special case stated by the Court of the Exchequer Chamber in Parlington v. Attoney General (1870) 4 H.L. 100, in which one of the questions submitted for decision was whether a double stamp duty was payable upon two administrations taken out in England in respect of the same proferty to be distributed in America, his Lordship observed:
I am not at all sure that, in a case of this, kind - a fiscal case - form is not amply sufficient; because, as I understand the principle of all fiscal legislation, it is this: If the person sought to be taxed comes within the Jetter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible in any statute what is called an equitable construction, certainly such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute,
It may be that the purpose of the Act before us is municipal, but it is still a taxing Act, and legislation may be purely fiscal for a municipal purpose, as is indeed the case with the other taxes.
8. Although no reason has been assigned in support of the observations, yet the ratio appears to be that the district boards or municipal boards are public bodies and they exist primarily for the benefit of the public. They are in charge of roads, hospitals and other beneficient institutions on which depend the health and welfare of the public.
9. The learned Counsel for the appellants also argues that, if in the course of the journey from Delhi to Garhmuktesar, the lorries picked up a few passengers at unimportant and way side stations and the plaintiffs earned a trifling amount this will hardly amount to a 'business'.
10. The learned Counsel for the respondent seeks to meet this contention by relying upon the following observations of Jessel M.R. in Bramwell v. Lacy (1879) 10 Ch. D. 691 at p. 694. It was the case of a hospital.
The first question is, is the a 'business', or 'in the nature of a business'? I have no doubt it is. It is in leality an apothecary's business. The question whether it is a business carried on for the purposes of profit or not, is not, in my opinion, material. Even if it is not strictly a 'business', it is, at all events, 'in the nature of a business.' But I am distinctly of opinion that this is a 'business' within the terms and meaning of the covenant.
11. The nature or the extent of the business or the profits, if any, is of no consequence. If the plaintiffs picked up passengers regularly at the different stations between Delhi and Garhmuktesar, they will be deemed to carry on business at all such stations. The business was one, spread over all along the line. Or, to put it differently, the entire business constituted one chain, the different stations at which the passengers were picked, forming so manylinks of that chain. The plaintiffs must, therefore, be deemed to carry on the business throughout the distance between Delhi and Garhmuktesar.
12. The view taken by the Courts below is right and we dismiss the appeal with costs.