Chaji Lal v. Town Area Committee Phulpur — 1969 DIGILAW 388 (ALL)

ORDER D.S. Mathur, J. - This a Second Appeal by Chaji Lal and others, Plaintiffs, against the decree of the Civil Judge of Azamgarh in appeal dismissing their suit for injunction to restrain the Defendant, the Town Area Committee of Phulpur, for realizing the circumstance and property tax imposed upon them for the year 1957-58. For this year the circumstance and property tax was imposed not on the two partnership Firms, but on the partners. In the past the tax was imposed on the Firms and not on the partners. One partnership Firm consists of Plaintiffs Nos. 1 to 4 and the other of Plaintiffs Nos. 5 to 8. u/s 14(f) of the UP Town Areas Act, circumstance and property tax can be imposed on a person residing or carrying on business within the limits of the Town Area. The imposition of the tax is subject to such limitations and restrictions as may be prescribed. The opening words of the section shall also make it clear that the I tax so imposed is subject to any general rules or special orders of the State Government in this behalf. 2. The word "person" has not been defined in the UP Town Area Act, but it can include not only individuals but also a partnership Firm. Consequently, in the absence of any general rules or special orders of the State Government, or the limitations and restrictions, the circumstance and property tax can be imposed in the case of a partnership Firm, not only on the Firm but also the partners thereof. 3. The Plaintiff have now filed a copy of Secret G.O. No. 6563/IX-23451 dated 10-12-1951 which can be treated as a special order of the State Government as contemplated by Section 14(f) of the UP Town Areas Act. It is true that certified copy of the G.O. was obtained by the Plaintiffs as late as on 28-9-1961, but in taxation matters the Courts can take a lenient view. The document does not appear to have been filed and utilized earlier under mistaken legal advice. This document is being brought on the record as additional evidence Under Order 41, Rule 27 Code of Civil Procedure. Being a certified copy it can be used in evidence without formal proof. An opportunity was given to the Respondent to file supplementary documentary evidence, but this has not been done. This document is being brought on the record as additional evidence Under Order 41, Rule 27 Code of Civil Procedure. Being a certified copy it can be used in evidence without formal proof. An opportunity was given to the Respondent to file supplementary documentary evidence, but this has not been done. This G.O. can, therefore, be deemed to apply to the material period also. 4. Para 3 of the G.O. governs the imposition of circumstance and property tax on a Firm and the partners thereof. The first sentence of this paragraph gives expression to the fact that there can be persons not residing within the limits of the Town Area, but carrying on business in a Firm's name. In such a case the Firm can be taxed and not the partners. There is no clear provision as to what shall happen if some of the partners reside within the jurisdiction of the Town Area. However, from the last sentence, as below, the intention of the State Government can be judged. When, however, an individual...is sought to be taxed, he or it cannot be treated as a separate person with respect to each firm. 5. Circumstance and property tax can be imposed on persons residing within the jurisdiction of the Town Area, even though they have no business, nor do they possess properties. Similarly, it can be imposed on persons carrying on business but not residing therein. From the business point of view the G.O. lays down that the Firm shall be taxed; but partners residing within the limits of the Town Area can be taxed on the basis of residence. This can be inferred, from the last sentence of para 3 of the G.O. also. 6. When the provisions of the law are such that both the Firm and the partners can be taxed with circumstance and property tax but under the G.O. the Firm shall be taxed when the partners do not reside within the jurisdiction of the Town Area and an individual cannot be treated as a separate person with respect to each Firm, what can be held is that the circumstance and property tax can be imposed not only on the Firm but also on such partners thereof as are actually residing within the limits of the Town Area. However, where the tax is imposed on a partner as an individual, he can be taxed only once and he cannot be treated as a separate person with respect to each Firm. 7. In the plaint, Chaji Lal and Kunji Lal, Plaintiffs, gave their residence as Phulpur Town Area. Hence under the G.O. the two partnership firms and also Chaji Lal and Kunji Lal could be made to pay the circumstance and property tax. No tax was imposed on the two partnership Firms. Hence this Court cannot direct the realization of tax from the two Firms. However, Chaji Lal and Kunji Lal were rightly ordered to pay the circumstance and property tax, but each could not be ordered to pay more than Rs. 250/-. 8. The Second Appeal thus partly succeeds and partly fails. Chaji Lal and Kunji Lal, being residents, a circumstance and property tax of Rs. 250/- each could be imposed upon them. It is hereby ordered that the Respondent shall not realize more than Rs. 250/- each from these two Appellants. Kunji Lal is now dead and the recovery of the tax can now be made from his legal representatives to the extent of the assets inherited by them from the deceased. The other Plaintiffs, namely, Plaintiffs Nos. 2 to 4 and 6 to 8 do not reside within the Town Area and no circumstance and property tax could be imposed upon them. The suit is decreed in so far as these Plaintiffs are concerned and it is ordered that the Respondent shall not realize the circumstance and property tax from them. Costs of all the Courts on the parties.