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M. Balasundaram Vs. the Financial Adviser/Chief Accounts Officer, Central Office and anr. - Court Judgment

LegalCrystal Citation
SubjectDiract Taxation
CourtChennai High Court
Decided On
Reported in(1980)2MLJ474
AppellantM. Balasundaram
RespondentThe Financial Adviser/Chief Accounts Officer, Central Office and anr.
Excerpt:
- - (2) every person responsible for making, any deduction under sub-section (1) may, at the time of making the deduction, increase or reduce the amount to be deducted under sub-section (1) for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct, during the half year......power to make the deduction authorised under clause (gg) of sub-section (2) of section 7 from the wages or salary of the employee. on 1st january, 1975 on which date section 11(c) was introduced in the payment of wages act, section 115-a had not found its place in the madras city municipal corporation act. consequently, the mere introduction of section 11(c) would not empower an employer to deduct from the wages of its employee the profession tax due to the corporation of madras. i have already found that only section 115-a which came into effect on 1st october, 1976 for the first time conferred the power on the commissioner, corporation of madras, to make a requisition in writing calling upon an employer to deduct the profession tax due from an employee from the latter's salary or.....
Judgment:
ORDER

S. Padmanabhan, J.

1. This writ petition involves the interpretation of Section 115-A of the City Municipal Corporation Act, 1919(hereinafter called the Act). The petitioner seeks the issue of a writ of mandamus restraining respondents 1 and 2 who are the Financial Adviser-cum-Chief Accounts Officer, Central Office, Southern Railway, Madras and the Commissioner, Corporation of Madras, respectively from deducting from the salary payable to him the profession tax due to the second respondent for any period anterior to 1st October, 1976.

2. The petitioner is employed as a Clerk Gr. I in the accounts office of the first respondent. He has to pay a sum of Rs. 6.25 per month towards profession tax to the Corporation of Madras. The profession tax for the period 1st October, 1974 to 31st March, 1977 was due as on the date of the institution of the writ petition. On the requisition of the second respondent the first respondent passed an order on 14th July, 1976 that the profession tax due from the petitioner to the Corporation of Madras for the period 1st October, 1974 to 31st March, 1977 Would be deducted from his salary in specified instalments. The contention of the petitioner is that the second respondent has no power to make any requisition to the first respondent calling upon him to deduct from the salary of the petitioner any profession tax that has fallen due prior to 1st October, 1976.

3. Prior to 1st October, 1976 the Commissioner, Corporation of Madras, had no power to call upon any employer to deduct from the salary of any employee the amount of profession tax due to the Corporation. Section 115 of the Act reads as follows:

The Commissioner may by notice require any employer or the head or secretary or manager of any public or private office, hotel, boarding house or club, or of a firm or company--

(a) to furnish within a specified time a list in writing of the names and residential address of all persons employed by such employer or by such office, hotel, boarding house or club, firm or company as officers, servants, dubashes, agents, suppliers or contractors with a statement of the salary or income of each of such employed persons ; and

(b) to furnish particulars in regard to any company of which such employer, head, secretary or manager, as the case may be is the agent.

4. From a reading of the above section, it will be clear that the Commissioner, Corporation of Madras had only the power to call upon the employer, hotel, boarding house or club, firm or company to furnish within the specified time a list in writing of the names and residential addresses of persons employed by such employer with a statement of the salary or income of each of such employed person and also to furnish particular* in regard to any company of which such employer, head, secretary or manager, as the case may be, is the agent. This section did not confer the power upon the Commissioner, Corporation of Madras, to call upon the employer to deduct any professional tax or other tax due from the wages or salaries of the employees.

5. On 1st October, 1976, Section 115-A of the Act was introduced, which reads as follows:

Deduction of Profession tax from salary or wages or others.--(1) Every employer shall, on receipt of a requisition from the Commissioner deduct from the salary or wages of any person employed by the employer as an officer or a servant or from any sum payable by the employer to any person employed by the employer as dubash, agent, supplier or contractor, such amount of profession tax, as may be specified in such requisition, as being due from such employed person.

Explanation : In this sub-section 'employer' includes the head or secretary or manager of any public or private office, hotel, boarding house, club, firm or company.

(2) Every person responsible for making, any deduction under Sub-section (1) may, at the time of making the deduction, increase or reduce the amount to be deducted under Sub-section (1) for the purpose of adjusting any excess or deficiency arising out of any previous deduction or failure to deduct, during the half year.

For the first time, Section 115-A conferred power on the Commissioner to make a requisition on the employer to deduct from the amount payable by the employer to any per -son employed by him such amount of profession tax as may be specified in such requisition as due from such employed person. Mr. Venkataraman, the learned Counsel for the petitioner submits that such amount or profession tax as may be specified in such requisition can only refer to such amount of profession tax as may fall due for payment after 1st October, 1976. It is the contention of Mr. Venkataraman that the section does not confer power on the Commissioner to make a requisition to deduct from the amount payable by the employer to any person employed by him, the profession tax that might have already fallen due for payment prior to 1st October, 1976. Consequently, the learned Counsel contends that in the case of the petitioner the profession tax that had fallen due on 1st October, 1976, and thereafter can only be deducted from the salary due to the petitioner.

6. Mr. B. Ram Mohan, for the second respondent and Mr. Venkateswara Rao for the first respondent contend that by virtue of Section 11(c) of the Payment of Wages Act, the first respondent would be entitled to deduct the profession tax due from the petitioner with effect from 1st January, 1975. This argument has been advanced on the ground that on 1st January, 1975 Section 11(c) was incorporated in the Payment of Wages Act which authorised the employer to deduct from the wages of the employed person the amount of profession tax due to the local authority. Section 11(c) of the Payment of wages Act (Central Act IV of 1936) reads as follows:

Deduction in respect of professional tax.--The employer shall, if so required by a requisition in writing by the local authority concerned or by an officer authorised in this behalf, make the deduction authorised under Clause (gg) of Sub-section (2) of Section 7 from the wages of the employed person and remit the amount so deducted to the credit of the local authority concerned in such manner as the State Government may by general or special order specify.

On an anxious consideration of the arguments advanced by the learned Counsel for both sides, I am inclined to agree with the submissions of Mr. Venkataraman. Prior to 1st October, 1976 the Commissioner, Corporation of Madras, had only the power conferred on him under Section 115 of the Act. Section 115 empowered the Commissioner, Corporation of Madras, to call upon the employer to furnish within a specified time a list in writing of all persons employed by such employer with a statement of the salary or income of each of such employed persons. Therefore prior to 1st October, 1976, the Commissioner had no power to make a requisition in writing calling upon the employer to deduct the profession tax from the salary of the employee. For the first time, such a power is conferred! on the Commissioner only under Section 115-A of the Act which came into force only on 1st October 1976. Section 1.15-A provides that such amount of profession tax as may be specified in such requisition shall be deducted by the employer from the salary or wages payable to an employee. There is no reference to arrears of profession tax in Section 115-A of the Act. Therefore, the reference to such amount of profession tax, can only be to the amount of profession tax that may fall due with effect from the date of introduction of Section 115-A. It could not have been the intention of the Legislature that' the Commissioner would be entitled to make a requisition in writing calling upon the employer to deduct the arrears of profession tax due prior to the date of coming into force of Section 115-A. If Section 115-A is so construed as to confer upon the Commissioner the power to call upon the employer to deduct from the salary or wages of an employee the arrears of profession tax that had already been fallen due prior to 1st October, 1976 the Commissioner would be in a position to claim even such arrears of profession tax which might have become barred by limitation. That could not have been the intention of the Legislature.

7. I am not persuaded to accept the argument of Mr. Ram Mohan and Mr. Venkateswara Rao that by virtue of Section 11(c) of the Payment of Wages Act, which came into force on 1st January, 1975 the profession tax that has fallen due for payment with effect from that date could be deducted from the salary of the petitioner. Section 11(c) empowered the employer to make the deduction authorised under Clause (gg) of Sub-section (2) of Section 7 from the wages of the employed person and remit the amount so deducted to the credit of the local authority concerned, if so required by a requisition in writing by the local authority. A condition precedent for exercise of the power conferred on the employer under Section 11(c) of the Payment of Wages Act is that there should be a requisition in writing by the local authority calling upon the employer to deduct the profession tax from the salary or wages of the employee. In the absence of any such requisition, the employer would have no power to make the deduction authorised under Clause (gg) of Sub-section (2) of Section 7 from the wages or salary of the employee. On 1st January, 1975 on which date Section 11(c) was introduced in the Payment of Wages Act, Section 115-A had not found its place in the Madras City Municipal Corporation Act. Consequently, the mere introduction of Section 11(c) would not empower an employer to deduct from the wages of its employee the profession tax due to the Corporation of Madras. I have already found that only Section 115-A which came into effect on 1st October, 1976 for the first time conferred the power on the Commissioner, Corporation of Madras, to make a requisition in writing calling upon an employer to deduct the profession tax due from an employee from the latter's salary or wage. In the circumstances, merely because Section 11(c) had been incorporated in the Payment of Wages Act as early as on 1st January, 1975, an employer will not get the power to deduct the profession tax due to the Corporation of Madras for a period anterior to 1st October, 1976. I therefore hold that the second respondent had no power to make a requisition calling upon the first respondent to deduct from the salary of the petitioner, the profession tax for the period anterior to 1st October, 1976.

8. Notwithstanding the above finding, I am not inclined to issue a writ of mandamus as prayed for by the petitioner. Mr. Venkataraman states that there had been no order of stay of collection of tax pending the writ petition. The profession tax due to the second respondent has already been deducted from the salary of the petitioner by the first respondent. No part of the arrears of profession tax claimed had become barred by limitation. Therefore, no prejudice has been caused to the petitioner by the amount having been already deducted from the salary of the petitioner. In the circumstances, I do not consider it necessary to issue a Writ of mandamus which will have the consequence of the 2nd Respondent having to refund the amount already collected from the petitioner, to the petitioner. In the circumstances, the writ petition is dismissed. There will be no order as to costs.


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