Madhya Pradesh High Court
Employees' Union Ordnance Factory And ... vs State Of M.P. And Anr. on 16 November, 1999
Equivalent citations: 2000(1)MPHT496
Author: Dipak Misra
Bench: Dipak Misra
ORDER Dipak Misra, J.
1. Invoking the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India the petitioners have prayed for declaration that the employees mentioned in 'Annexure P-1' working in the Ordnance Factory, Itarsi are not liable to pay professional tax under the M.P. Vrittikar Adhiniyam, 1995 (hereinafter referred to as 'the Adhiniyam'). A further prayer has been made to issue a writ of prohibition from recovering the aforesaid tax from the employees who have been named under Annexure P-1.
2. It is worth-noting here that the petition has been filed by the Employees' Union Ordnance Factory, Itarsi, through its President; Ayudh Nirmani Karmchari Sangh, through its President; Ayudh Nirmani Karmchari Union, through its Secretary; Akhil Bhartiya Ayudh Nirmani Lipikiya Karmchari Sangh; and All India Association of Non-Gazetted Officers of the Ordnance Factory, Itarsi. It is averred in the petition that the employees of the petitioners' Association are working in the Defence Ministry of the Central Government and they are part and parcel of the defence establishment. It is stated that the Ordnance Factory at Itarsi is under the total control of the army personnel and the management of the defence factory is vested with the army. In certain circumstances, the services of the employees can also be requisitioned in emergency for the purpose of army operation though they have been governed by the Central Civil Services Control and Appeal Rules and not by the Army Act. It is put forth that there are about 40 defence factories in the various parts of the country and six of them are situated in the State of Maharashtra. It is averred that the Government of Maharashtra has exempted the employees of the Ordnance Factories from the payment of the Professional Tax. It is put forth that the constitutional validity of the Act was challenged before this Court in Writ Petition No. 2424/95 but the same has been upheld by the judgment dated 25-3-96. It is pleaded that the army has been exempted from the payment of Professional Tax on the basis of the provisions contained in the Army Act, 1950. A reference has been made specifically to exemption as far as the civilian employees are concerned in the State of Maharashtra and a judgment rendered in the case of B.S. Raut and Ors. v. State of Maharashtra and Ors., reported in 1992 Maharashtra Law Journal page 360 has been brought on record. On the basis of the aforesaid judgment a representation was made to the State Government but eventually the said representation has been rejected. It is urged in the writ petition that the employees working in the Ordnance Factory at Itarsi are the employees of the Defence Department and, therefore, they are entitled to exemption from payment of the Professional Tax. It is also stated that a person in Maharashtra working in the Ordnance Factory does not pay the Professional Tax whereas, similarly placed person has to pay Professional Tax at M.P..
3. A return has been filed by the respondent No. 1 contending, inter alia, that the M.P. Vrittikar Adhiniyam, 1995 does not provide any exemption to any defence personnel and hence, the petitioners are not entitled to any relief. A stand has also been taken that the word 'employee' has been defined under Section 2(c) of the Act and the likes of the petitioners come under the ambit and sweep of that definition. As stated in the counter affidavit the members of the petitioners Union are persons covered under the definition of the employees under the Act and, therefore, are bound to pay the Professional Tax. In the return a distinction has been made between Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 and the M.P. Act. It is also pleaded that the validity of the Act has been upheld and hence, the petitioners cannot have any further grievance.
4. A return has been filed by the respondent No. 2, the General Manager, Ordnance Factory, Itarsi stating that they have no role to play except collecting the Professional Tax as per the provision of the Act.
5. I have heard Mr. S.K. Gangrele, learned counsel for the petitioners and Mr. R.S. Jha, learned Dy. Advocate General for the State. Submission of Mr. Gangrele is that as the petitioners are defence personnel they are not required to pay the Professional Tax. He has placed heavy reliance on the decision rendered in the case of B.S. Raut (supra).
Resisting the aforesaid submission Mr. R.S. Jha, learned Dy. Advocate General for the State has submitted that the decision rendered in the case of B.S. Raut (supra) is not at all applicable to the prevailing scenario.
6. To appreciate the rival submissions raised at the Bar, it is apposite to refer to Section 3 of the Adhiniyam which reads as under :--
"Section 3. Levy and Collection of Tax :-- (1) Subject to the provisions of Article 276 of the Constitution of India, and of this Act there shall be levied and collected tax on professions, trades, callings, and employments.
(2) Every person who carries on a trade either himself or by an agent or representative or who follows a profession or calling other than agriculture or who is in employment either wholly or in part in Madhya Pradesh and who falls under one or the other classes specified in column (2) of the Schedule, shall on the basis specified in the Schedule in respect thereto be liable to pay tax at the rate mentioned against the class of such person in column (3) of the said Schedule :
Provided that notwithstanding anything contained in the Schedule where a person is covered by more than one entry of the Schedule, tax under this Act shall be payable by such person at the highest rate of tax specified in respect of such entries.
(3) Notwithstanding anything contained in Sub-section (2) any person falling in any of the classes specified in column (2) against serial number 2 of the Schedule shall have the right to opt, in the prescribed manner, to pay tax on the annual income as specified in column (2) against serial No. 1 in lieu of the tax payable by him, and on exercising the option such person shall be liable to pay tax at the rate specified in column (3) against the category specified in column (2) against serial No. 1 applicable to him, and for that purpose reference to the income of such person.
(4) Every person who opts under Sub-section (3) for payment of tax under entry at serial No. 1 of the Schedule shall, subject to the provisions of this Act, pay for each financial year a tax at the rate specified in serial No. 1 of the Schedule if his income during the previous year exceeds forty thousand rupees.
(5) Any person who is in the employment in Madhya Pradesh shall be deemed to be in employment even though he may be absent therefrom on leave or otherwise."
Section 4 of the Adhiniyam, fastens liability on the employer to deduct tax from the salary every month in the prescribed manner. Section 6 confers powers on the State Government to exempt any such class of employees, as the State Government feels necessary or expedient to do so. As per return such a notification has not been brought into existence providing any exemption to any army personnel. It is submitted by Mr. Jha that on a bare reading of the aforesaid provisions it is perceptible that the employees of the petitioners Union are not exempted and they are covered by the Adhiniyam and hence, they are bound to pay the tax.
6. In this context, I may usefully refer to the case of B.S. Raut (supra). In the aforesaid case, a Division Bench of Bombay High Court was dealing with Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 ("Professional Tax Act" for short). Under Section 27(a) of the aforesaid Act it has been provided as under :--
"Nothing contained in Section 3 and other provisions of this Act shall apply to--
(a) the members of the armed forces of the Union, that is to say, to whom the provisions of the Army Act, 1950, the Air Force Act, 1950, or the Navy Act, 1957 apply serving in any part of the State."
The Division Bench took note of the non-obstante provision in the Act and came to hold as under :--
"12. Under the circumstances, we see no justification to confine the exemption clause contained in Section 27A of the Professional Tax Act only to the regular Army personnel who are governed by the Army Act in peace time or war time and not extend the same to civilian defence personnel who can be ordered to render field service and follow the Army in certain situations-- mainly war time."
It is to be noted that the Bombay High Court had only interpreted Section 27A of the Professional Tax Act in a liberal manner. But in absence of any such provision under the M.P. Adhiniyam the question of interpretation does not arise. The contentions raised by Mr. Gangrele, learned counsel for the petitioners is that the employees working in the Ordnance Factory are not liable to pay the Professional Tax is not supported by any cogent reason or argument. He has tried his level best to base his argument solely on the basis of the decision rendered in the case of B.S. Raut (supra) but the language of the two statutes being quite different, I have not been able to persuade myself to accept his submission.
7. Mr. Gangrele has feebly argued with regard to the discrimination under Article 14 of the Constitution of India. His submission was that if a person is transferred to Maharashtra he is exempted from payment of Professional Tax whereas, he is bound to pay so while he is posted at Madhya Pradesh. It is to be borne in mind the validity of the Act which was called in question in Writ Petition No. 2424/95 and the same has already been upheld and in this obtaining factual matrix, I am afraid, submission of Mr. Gangrele has no force.
8. In view of my preceding analysis, the writ petition, being devoid of merit, is dismissed. However, there shall be no order as to costs.