Panchayat:Repo18/Law Manual Page0259

(6) The profession tax leviable from a firm or association, may be levied from the agent of the firm or association as the case may be.

(7) (a) If a company or person employs a servant or agent to represent it or him for the purpose of transacting business in any local area of a Village Panchayat, such company or person shall be deemed to transact business in that local area, and such servant or agent shall be liable for the profession tax in respect of the business of such company or person whether or not such servant or agent has power to make binding contracts on behalf of such company or person.

(b) Where one company or person is the agent of another company or person, the former company or person shall not be liable separately to the profession tax on the same income as that of the principal.

NOTES

BSNL, a Government Company, engaged in providing telecom services is liable to pay profession tax to the Panchayat. – Bharat Sanchar Nigam Ltd., Kottayam v. Secretary to Govt. and Others – 2016 (5) KHC 790.

In a particular Telephone Exchange if SIM Cards or other goods are sold, it amounts to transacting business and BSNL is liable to pay Profession Tax. The word 'business' has been described as a word of flexibility or much signification and very comprehensive. The word denotes not only all gainful occupations but all occupations or duties in which men are engaged. The words 'otherwise dealing with goods' would include such transaction where hand sets of telephones are supplied to the customers and the BSNL is required to render services as per the terms of the contract entered into between the BSNL and the customer. It is a kind of commercial activity telescoped to professional activity and so it can be understood as 'business' because the ultimate and prime object of such transaction is profit. If engaged in sale of goods; namely SIM Cards and other articles, it has to be understood that it is being done by BSNL for a profit. - Indira C. M. v. Secretary, Kunhimangalam Grama Panchayat and Another - 2012 (4) KHC 857 : 2012 (4) KLT 914 : ILR 2013 (1) Ker. 76 : 2013 (1) KLJ 34.

Every taxation should be supported by a valid legislation, in view of the mandate in Article 265 of the Constitution of India. In the face of that provision, no tax can be levied by issuing an executive order. So, the order cannot be pressed into service to collect presumptive tax from the petitioners or other persons liable to pay profession tax. They are already in the profession tax-net under Section 204 read with the Kerala Panchayat Raj (Profession Tax) Rules, 1996. So, the Panchayats can continue to levy, demand and collect tax from them under the provisions of the said Section and the Rules mentioned above. Of course, the Government can give statutory backing for pre statutory provisions appropriately. Till such time, tax can be levied and collected only as per the provisions of the aforementioned Rules. Ext. P2 being a policy declaration made by the Government concerning collection of presumptive tax, it is not necessary to quash Ext. P2. But, it is declared that on the strength of Ext. P2, no tax can be collected from the petitioners, until corresponding amendments are carried out to the statutory provisions. (Para 5) - All Kerala Private Bankers Association, Kottayam v. State of Kerala and Another – 2009 (4) KHC 907 (DB): 2009 (4) KLT 867.

Once a company or a person is an assessee under the Income Tax or the Agricultural Income Tax Act, the income is to be calculated on the basis of the profit and loss account under the provisions of the Income Tax Act or 5.5 of the Agricultural Income Tax Act for the purpose of computation of Agricultural Income. Only if the half yearly income is below Rs. 12,000/- then alone there is exemption. That Income is not the next taxable Income; but income is as per the profit and loss accounts. - Malankara Plantations Ltd. v. Edavetti Grama Panchayat - 2007 (1) KLT 321].

Under the Kerala Panchayat Raj Act, 1994, right from the inception, the Dearness Allowance was included while calculating aggregate income for the purpose of profes Panchayat Raj Act, 1994 in rural areas and under the Kerala Municipality Act in urban areas, the aggregate income, for the purpose of calculating profession tax, takes in Dearness Allo difference is that the inclusion of Dearness Allowance in the Municipal area is only from 24.3.1999. - Radhakrishnan Nair v. State-2006 KHC 538: 2006 (2) KLT 291: ILR 2006 (2) Ker. 273:2006 (2) KLJ 82.

Prosecution for non-payment of profession tax – Court before which prosecution is launched cannot sit in judgment over the validity, propriety or correctness of the amount – Same has to be challenged before the appropriate forum.- The Magistrate before whom the prosecution is launched, is