ORDER.- The point involved in these petitions is a very short one and turns on the construction of the First proviso to rule 7 of Part II of Schedule IV of the City Municipal Act, Madras Act IV of 1919. The petitioners in these three petitions are three foregin but Indian Registration film distributing companies carrying on business in India who have their Head Offices in Bombay with Branch Offices in Madras. All their contracts for the distribution of their film, by the theatres in the City of Madras are entered into in Bombay and the Branch Offices merely acting as post offices collecting the moneys due and remitting the proceeds to their respective Head offices. The point in controversy is as regards the assessment to Companies’ tax of these “Branch Offices under the Madras City Municipal Act. Section no of the Act enacts, (I will set out only the relevant portion): ‘”If the Council by a resolution determines that a tax on companies shall be levied every company which, after the date specified in the notice published under sub-section 98-A transacts business within the city in any half year for not less,than sixty days in the aggregate shall pay,in addition to any licence fee that may be leviable under this Act, a half-yearly tax assessed sith the rules in Schedule IV, but in no case exceeding rupees one thousand. The necessary resolution has been passed and the Companies which are the petitioners here have transacted business within the City for this period specified in the section. They have, therefore, become liable to the payment of a half-yearly tax assessed in accordance with the rules in Schedule IV The portion of Schedule IV, which is relevant is to be found in rule 7, which is the first of the rules in Part II of this Schedule which is headed, “ Assessment of Companies . That rule reads: ”Companies shall be assessed by the Commissioner on the following scales:- Paid up Capital Lakhs of rupees. Half yearly tax Rs. That rule reads: ”Companies shall be assessed by the Commissioner on the following scales:- Paid up Capital Lakhs of rupees. Half yearly tax Rs. A Less than one 30 B One and more than one, but less than two 50 C Two and more than two, but less than three 100 D Three and more than three, but less than five 150 E Five and more than five but less than ten 250 F Ten and more than ten but less than twenty 500 G Twenty and more than twenty 1,000 Provided that any company, the Head or a Principal Office of which is not in the city and which shows that its gross income received in or from the city in the year immediately preceding the year of taxation- (b) has exceeded Rs. 5,000 but has not exceeded Rs. 10,000 shall pay only Rs. 50 per half year (c) has exceeded Rs. 10,000 but has not exceeded Rs. 20,000 shall pay only Rs. 100 per half year (d) has exceeded Rs. 20,000 shall pay per half year Rs. 100 together with a sum calculated at the rate of 25 rupees per half year for every 5,000 rupees or part thereof, of gross income in excess of Rs. 20,000 subject to a maximum half yearly tax of 1,000 rupees. Provided further that when a company the Head or a Principle Office of which is not in he city becomes liable to tax for the first time, it shall pay in the first year, a tax of 25 rupees ; but if the gross income of the company during such year is subsequently found to have exceeded 5,000 rupees, it shall pay the tax calculated in accordance with the above mentioned scale less the initial payment of 25 rupees." If the Head Offices of the petitioners-companies-had been in Madras,they would have been liable to tax under the main part of rule 7 and in that event having regard to their paid up capital, the tax payable by them would have been Rs. 30 per half year. 30 per half year. Their Head Offices are, however, situated in Bombay and if the amounts collected by them from the theatre owners in the City and the States and transmitted by them to Bombay were the criteria for determining the tax payable by them, that is, by the application of the Proviso, they would fall under Head (d) of the Proviso. They have been assessed by the Corporation of Madras on the latter basis, and it is the legality of this method of invoking of the Proviso by the Corporation that is challenged in these petitions. Mr. Chengalvaroyan, learned counsel for the Corporation raised two points. The first was that on a proper construction of section no read with rule 7 of Schedule IV, it was for the Corporation to decide whether a company should be assessed under the main part of the rule, or under the Proviso. He also put his argument in a slightly different form by saying that the main part of the rule-the assessment based on paid up capital-was on its terms inapplicable to cases where the Head Office of the Company was situated outside the City with the result that it was only the Proviso that would be attracted. I feel unable to accept either argument. The first part of the rule besides the scale of tax on the paid up capital of a company applies without reference to the location of the Head Office. If the terms of section 110 are satisfied, namely, that a company has been transacting business within the City for the minimum period of 60 days within any half year, the liability to tax arises and the rate at which such tax shall be assessed is normally dependent upon the paid up capital. The next question is whether the Proviso has been framed with a view to alleviating any hardship which a taxation on the basis of the paid up capital might inflict upon companies whose business within the City might be only nominal or whether the Proviso is an alternative method of assessment of which Corporation might avail itself at its choice. The language of the Proviso is, in my opinion, consistent only with the construction that it is designed as a concession to the assessee and to afford relief against the hardship which an assessment on the basis of paid up capital might involve in individal cases. The language of the Proviso is, in my opinion, consistent only with the construction that it is designed as a concession to the assessee and to afford relief against the hardship which an assessment on the basis of paid up capital might involve in individal cases. If the Head Office were within the City the sole basis for computing the tax would be the paid up capital, whatever might be the turnover or quantum of the business of the company. In cases, however, where the Head Office is situated outside, the Company might have branches in several places one of which might be within the City, and the framers of the rule, therefore, contemplated that it would be unjust to tax each one of these branches on the basis of the paid up capital. That it is intended as an option which could be availed of by the assessee in cases where the operation of the tax on a paid up capital basis, was unduly harsh appears to be favoured by the use of the expression ‘which shows that its gross income received in or from the city. . . ‘If the company did not show it, and there does not seem to be any obligation upon it imposed by the Proviso to do so, the result would be that paid up capital would form the basis for the levy of the tax. In my opinion, the Second proviso which I have extracted earlier would also appear to support this construction. I, therefore, hold that the assessment of the companies by the Corporation by applying the Proviso is illegal and not justified by section 110 read with rule 7 of Schedule IV, Part II, and the demand made by the Corporation on that basis must, therefore, be quashed. The second point that was urged by Mr. Chengalvaroyan, learned Counsel for the Corporation, was that there was an alternative remedy which was both sufficient and effective, which precluded resort to the jurisdiction of this Court under Article 226. Learned Counsel for the Corporation pointed out that under rules 12, 14 and 15 (a) of Schedule IV, provision was made for the entertainment of regular appeals and ultimately for the matter being decided by the Court of Small Causes. Learned Counsel for the Corporation pointed out that under rules 12, 14 and 15 (a) of Schedule IV, provision was made for the entertainment of regular appeals and ultimately for the matter being decided by the Court of Small Causes. Though the learned Counsel originally put this forward as an objection, he expressly withdrew it and stated that he desired to have the proper construction of rule 7 of Schedule IV determined by this Court and for that reason he did not want to raise any objection which would preclude the Court from deciding this question of construction. The objection having been specifically withdrawn, I need say no more about it. The writ petitions succeed accordingly, and the rules nisi are made absolute. No order as to costs. R.M. ------------- Petition allowed.