D.K. Seth, J.@mdashThis appeal arises out of a judgment and order dated 25th February, 2003 passed in Writ Petition No. 4406(W) of 2002
dismissing the writ petition on the ground of absence of jurisdiction of the High Court in view of Section 14 of the West Bengal Taxation Tribunal
Act, 1987 (1987 Act).
2. Mr. Hirak Mitter, learned Counsel for the appellant-writ petitioner, raised two questions. First, that the writ petition could not be dismissed as
not maintainable in view of Section 14 of the 1987 Act barring jurisdiction of the High Court. The second is that having regard to the facts and
circumstances of the case, the petitioners, though posted at Calcutta, are not persons employed in West Bengal and thus are not subject to the
West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979 (WB Act). He had raised several limbs of this point, namely,
that the salary of the appellants-petitioners posted at Calcutta are being paid by their employer at Chhattisgarh as such they are carrying on
profession in Chhattisgarh and not in West Bengal. Even though they may be absent from Chhattisgarh still they are deemed to be employed in
Chhattisgarh in view of Section 3 Sub-section (5) of the Madhya Pradesh Vritti Kar Adhiniyam, 1995 (MP Act), applicable in Chhattisgarh.
3. These are disputed by the learned Counsel for the State of West Bengal, Mrs. Seba Roy, led by Mr. Bidyut Kiran Mukherjee, Senior
Advocate, on the ground that the appellants being posted at Calcutta, they are carrying on profession within the State of West Bengal. As such
they are subject to the WB Act. It is immaterial whether their salary is paid by their employer at Chhattisgarh. The other point urged by Mr.
Mukherjee is that Section 14 of the 1987 Act creating a bar of jurisdiction of the High Court renders the writ petition not maintainable. This point
of maintainability in view of Section 14 of the 1987 Act found favour with the learned Single Judge dismissing the writ petition as not maintainable.
4. We may refer to the brief facts in order to appreciate the situation. The WB Act came into force in 1979. Whereas the MP Act was enacted in
1995. The profession tax was deducted by the respondent No. 5, Bhilai Steel Plant (BSP) a unit of Steel Authority of India (SAIL), employer of
the appellants posted at Calcutta under the MP Act from 1996. Whereas on 5th December, 2001 the authorities under the WB Act issued notices
of assessment/show-cause in respect of a period 1979-80 to 1998-99 as well as in respect of the period 1989-90 to 1999-2000. The employer
of the appellants applied for refund of the tax collected by the authorities under the MP Act amounting to Rs. 1,55,4137- deducted by it from the
salaries of the appellants for the period 1995-96 to 2000-2001. The authorities under the MP Act on 16th January, 2002 made it clear that the
payment of professional tax and deduction thereof from the salaries of the appellants would be made at Bhilai under the MP Act. The appellants
filed objection before the authorities under the WB Act on 7th March, 2002. In the meantime, the authorities under the MP Act issued certificate
of deduction and deposit of professional tax at the office of the authorities under the MP Act for the period 1st April, 1996 till 31st March, 2001.
Whereas on 13th March, 2002 the authorities under the WB Act directed the employer of the appellants to deduct professional tax from its
employees posted in West Bengal from 1st April, 1979 and deposit the same with the authorities under the WB Act informing them that in default
penal action would be taken against it. In this situation while running between the authorities under the MP Act and the WB Act, the appellants had
moved the writ petition which having been dismissed as aforesaid the present appeal has been resorted to.
5. We would prefer to take the first point first. Section 14 of the 1987 Act creates a bar of jurisdiction of the High Court in relation to the matters
covered under the said Act. The vires of similar such provision having been challenged in L. Chandra Kumar''s case, the Apex Court had held that
this taking away of jurisdiction would not preclude the High Court from exercising its jurisdiction conferred upon it under Articles 226 and 227 of
the Constitution of India. This jurisdiction conferred by the Constitution cannot be taken away through legislation. But, however, it had made the
decision of the Tribunal subject to Articles 226 and 227 by a Division Bench. But these jurisdictions can be availed of only after being routed
through the Tribunal. True, jurisdiction of the High Court is barred by reason of Section 14 of the 1987 Act in respect of matters covered under
the WB Act, a specified State Act within the meaning of Section 2(k) of the 1987 Act.
6. Section 14 of the 1987 Act excludes the jurisdiction of all Courts including the High Courts in respect of matters entertainable by the Tribunal.
Exclusive jurisdiction has been conferred on the Tribunal to the exclusion of all other Courts except Supreme Court in relation to the adjudication
or trial of disputes, complaints or offences with respect of levy, collection, assessment and enforcement of any tax under any specified State Act
and any matter connected therewith or incidental thereto. The jurisdiction of the Tribunal is very wide in relation to the matters within its
jurisdiction; but such jurisdiction is confined within the scope and ambit of the specified State Act defined in Section 2(k). The expression ''""matters
connected therewith or incidental thereto"" is to be interpreted on the principles of ejusdem generis, namely, connected with or incidental to the
matters, covered under the specified State Act. This connection or incidence cannot trench upon the domain of an Act other than the specified
State Act. As soon the question of interpretation of the provisions of an Act outside the purview of the State Act becomes involved, the Tribunal
created under the 1987 Act cannot assume jurisdiction in respect thereof. Even if we assume for argument''s sake that it would be necessary to
look into the MP Act for the purpose of ascertaining the impact of the WB Act, even then a decision by the Tribunal would not be binding on the
authorities under the MP Act exposing the appellants to the mischief of double taxation by two different authorities. The dispute to the claim by two
authorities created under two different Acts, one of which outside the specified State Act, cannot be resolved by the Tribunal established under the
1987 Act. A decision of the Tribunal in such matter would not bind the authorities under the MP Act. The decision of the Tribunal would not reach
finality until the dispute is resolved. Therefore, Section 14 providing the exclusion clause would not confer jurisdiction on the Tribunal to adjudicate
into matters involving conflicting claims made by any authority under any Act other than the specified State Acts. The Tribunal can enforce the
liability under the WB Act, but it cannot prevent the authorities under the MP Act to impose liability on the appellants and resolve the conflict
between the authorities under the two Acts.
7. In the present case, the tax is being deducted by the employer of the appellants under the MP Act applicable in the State of Chhattisgarh. The
appellants claim that they are governed by the MP Act. In fact, the dispute is as to whether the MP Act will apply or the WB Act would apply.
The question boils down to the consideration of comparative effectively of the respective Act in respect of employees, i.e., the appellants, posted
at Calcutta. Therefore, the determination of the question involved would necessitate consideration of both WB Act and MP Act. Whereas WB
Act is confined within the matters related to the State Acts specified in the Schedule of the 1987 Act. The Schedule includes the WB Act, a State
Act but it does not include the MP Act. Therefore, in our view, Section 14 of the 1987 Act would not be a bar in entertaining the writ petition, The
jurisdiction of the Taxation Tribunal is confined within the State Acts mentioned in the Schedule and not beyond. In exercise of its jurisdiction, it
cannot decide any matter falling under or relating to the MP Act. Therefore, the Taxation Tribunal could not assume jurisdiction with regard to the
present question. Unless the jurisdiction of the Taxation Tribunal is attracted, the jurisdiction of the High Court cannot be ousted. Therefore, in our
view, this High Court has jurisdiction to entertain writ petition in respect of matters outside the specified State Act, as defined in Section 2(k) of the
1987 Act, without being routed through the Tribunal.
8. Similarly, for the purpose of considering this question, it is necessary to consider the impact of the WB Act. Therefore, any provision prohibiting
jurisdiction of the High Court by the MP Act would not be attracted to oust the jurisdiction of this High Court, if in course of determination the
impact of the WB Act becomes relevant. In these circumstances, we answer the first question in favour of the appellants holding the writ petition
maintainable.
9. We could have remanded the matter to the Court below for deciding the question afresh. But the matter being a pure question of law on
admitted facts, we do not find it necessary to refer the matter back to the learned Single Judge for decision, particularly in view of the fact that both
the learned Counsel had addressed this Court on merits in threadbare. Therefore, we propose to decide this question on merit,
10. Now we may take up the second point. Admittedly, the appellants are posted at Calcutta. The payment of their salary is made in Chhattisgarh,
though it might be received by the appellants either at Chhattisgarh or at Calcutta. Admittedly, they are employed in BSP-SAIL operating at
Chhattisgarh, having a liaison office at Calcutta and thereby operating in part in West Bengal.
11. On these facts the question is to be determined. In order to decide this question, we would need to refer to the different provisions of the WB
Act and MP Act respectively. We, therefore, propose to quote the relevant provisions of the two Acts :
MP Act WB Act
2(c).""Employee"" means a person 2(b). ""Employee"" means a person
employed on salary or wage and employed on salary or wage, and
includes -- includes --
(i) a Government Servant receiving pay (i) a Government Servant receiving pay
from the revenues of Central from the revenues of Central Government
Government or any State Government or any State Government or the Railway
or the Railway Fund; Fund;
(ii) a person in the service of a body (ii) a person in the service of a body,
whether incorporated or not, which is whether incorporated or not, which is
owned or controlled by the Central owned or controlled by the Central
Government or any State Government, Government or any State Government,
where the body operates in any part of whether the body operates in any part of
the State, even though its headquarters the State, even though its headquarters
may be outside the State; may be outside the State;
(iii) a person engaged in any (iii) a person engaged in any employment
employment of an employer not of an employer, not covered by items (i)
covered by items (i) and (ii) above; and (ii) above;
2(d). ""Employer"" in relation to an 2(c). ""Employer"" in relation to an
employee earning any salary or wages employee earning any salary or wages on
on regular basis under him means the regular basis under him, means the
person or the officer who is responsible person or the officer who is responsible
for disbursement of such salary or for disbursement of such salary or wages,
wages and includes the head of the and includes the head of the office or an
office or an establishment as well as establishment as well as the manager or
manager or agent of the employer; agent of the employer;
2(f). ""Person"" means any person who is 2(f). ""Person"" means any person who is
engaged in any profession, trade, calling engaged in any profession, trade, calling
or employment in the State of Madhya or employment in the West Bengal, and
Pradesh and includes a Hindu includes a Hindu undivided family, firm,
undivided family, firm, company, company, corporation or other corporate
corporation or other corporate body, body, any society, club or association so
any society, club or association so engaged but does not include any person
engaged but does not include any who earns wages on a casual basis.
person who earns wages on casual
basis.
Explanation. -- The expression ""person
who earns wages on casual basis shall
mean a person who earns wages on
being employed for a period not
exceeding 180 days in a year.
Section 3. Levy and Collection of Tax. Section 3. Levy and Charge of Tax. --
-- (1) Subject to the provisions of (1) Subject to the provisions of Article
Article 276 of the Constitution of India, 276 of the Constitution of India, there
and this Act there shall be levied and shall be levied and collected a tax on
collected tax on professions, trades, professions, trades, callings and
callings and employments. employment, in accordance with the
provisions of this Act
(2) Every person who carries on a (2) Every person engaged in any
trade either himself or by an agent or profession, trade, calling or employment
representative or who follows a and falling under one or the other of the
profession or calling other than classes mentioned in the second column
agriculture or who is in employment of the Schedule shall be liable to pay to
either wholly or in part in Madhya the State Government tax at the rate
Pradesh. and who falls under one or the mentioned against the
other classes specified in column. (2)
of the Schedule shall, on the basis class of such persons in the third column
specified in the Schedule in respect of the said Schedule:
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 Provided that entry (23) in the Schedule
contained in the Schedule, where a shall apply only to such classes of
person is covered by more than one persons as may be specified by the State
entry of the Schedule, tax under this Government by notification from time to
Act shall be payable by such person at time.
the highest rate of tax specified in
respect of such entries.
(3) *** **** ***
(4) *** **** ***
(5) Any person who is in employment
in Madhya Pradesh shall be deemed to
be in employment even though he may
be absent therefrom on leave or
otherwise.
Section 4, Employer''s liability to Section 4. Employer''s liability to deduce
deduce and pay tax on behalf of and pay tax on behalf of employees. --
employees. -- The tax payable under The tax payable under this Act by any
this Act by any person earning a salary person earning a salary or wage shall be
or wages shall be deducted monthly in deducted by his employer from the salary
the prescribed manner by his employer or wage payable to such person, before
from the salary or wages payable to such
such person
before such salary or wages is paid to salary or wage is paid to him, and such
him and such employer shall, employer shall, irrespective of whether
irrespective of whether such deduction such deduction has been made or not
has been made or not, when the salary when the salary or wage is paid to such
or wage is paid to such person, be person, be liable to pay tax on behalf of
liable to pay tax on behalf of all such all such persons:
persons:
Provided that if the employer is an Provided that if the employer is an officer
officer of the Central Government or a of Government, the State Government
State Government, such employer shall may, notwithstanding anything contained
discharge the said liability in such in this Act, prescribed by rules the
manner, as may be prescribed. manner in which the employer shall
discharge the said liability:
(2) When any person earning a salary Provided further that where any person
or wages -- earning a salary or wage --
(a) is also covered by one or more (a) is also covered by one or more
entries other than entry 1 of the entries other than entry 1 in the Schedule
Schedule and the rate of tax in any such and the rate of tax under such entry or
other entry is more than the rate of tax any of such entries is higher than that in
under entry 1 of the said Schedule. entry 1, or
(b) is simultaneously in employment of (b)is simultaneously engaged in the
more than one employer; employment of more than one employer;
and such person furnishes to his and such person furnishes to his
employer a certificate in the prescribed employer or employers a certificate in the
form declaring that he has been prescribed form declaring inter alia, that
registered under sub-section (2) of he shall obtain a certificate of enrolment
section 8 and shall pay the tax himself, under subsection (2) of section 5 and pay
then the employer or employers of such the tax himself, then the employer or
person shall not deduct the tax from the employers of such person shall not
salary or wages payable to such person deduct the tax from the salary or wage
and such employer or employers, as the payable to such person and such
case may be, shall not be liable to pay employer or employers, as the case may
tax on behalf of such person.: be, shall not be liable to pay tax on behalf
of such person.
Provided that such person may opt to (Vide Rules 10 and 13 and form
have the amount of tax deducted by the 11B/11C and IV).
employer or employers from his salary
or wages and thereupon the amount so
deducted shall stand adjusted towards
the tax payable by such person for the
year.
12. Having regard to the scheme of the two Acts as discussed above, it appears that both the Acts have defined ""employee"", ""employer"" and
person"" almost in identical manner. The ""levy and collection of tax"" and the ""employer''s liability to deduct and pay tax on behalf of employees"" are
almost in identical lines.
Under both the Acts, the liabilities fastened on the employee create a liability on the employer to deduct and pay the tax on behalf of the
employees- Both u/s 2(c) of the MP Act and Section 2(b) of the WB Act, ""employee"" means a person employed on salary or wages and includes
(i) a Government servant receiving pay from the revenues of the Central Government or any State Government or the Railway Fund; (ii) a person
in the service of a body incorporated or not, controlled by Central or State Government operating in any part of the State even though its
headquarter may be outside the State. Thus, this definition does not restrict the employment of the employee only with the State Government
concerned, namely, of Chhattisgarh under the MP Act and West Bengal under the WB Act. It includes a Government servant receiving pay from
the revenues of any State Government or employed in a body incorporated or not controlled by Central or State Government operating in any part
of the State even though the headquarter may be outside. The definition of ""employee"" proceeds to define employee to mean a person employed.
The ""person"" is defined to mean u/s 2(f) (in both the Acts), any person engaged in any employment in the State of Madhya Pradesh (in the present
context the State of Chhattisgarh wherever referred to) or West Bengal respectively. Thus, the primary consideration for fastening liability to pay
profession tax is on a person engaged in any employment including Government servant in the State of Madhya Pradesh or in the State of West
Bengal respectively, irrespective of the fact whether he is serving the Government of or a body corporate or not in either of these two States or of
any other State. When the liability is primarily on the person employed/Government servant, it is the definition of ''employee'' and ''person'', which
would be the deciding factor.
13. The levy and collection of tax under the MP Act is provided in Section 3 of the MP Act. Sub-section (2) fasten the liability on every person
who is in employment either wholly or in part in Madhya Pradesh and falls under any one or the other classes specified in column-2 of the
Schedule. Sub-section (5) of Section 3 clarifies the situation that the absence of the employee on leave or otherwise from Madhya Pradesh would
not relieve the liability of the employee. Whereas Section 3 of the WB Act does not provide for any such provision. However, we are not
concerned with this provision in relation to West Bengal since the employees are, in fact, employed in West Bengal and are not absent therefrom.
The MP Act confines the liability on persons employed wholly or in part in Madhya Pradesh, even though he might be absent from Madhya
Pradesh on account of leave or otherwise. Mr. Mitter had attempted to point out that this Sub-section (5) of Section 3 of the MP Act fastens the
liability on the employees posted at Calcutta. Inasmuch as, though they are absent from Madhya Pradesh yet they shall be deemed to be in
employment in Madhya Pradesh. But this proposition seems to be fallacious. The absence has been qualified as on account of leave. The
expression ""or otherwise"" used in Sub-section (5) of Section 3 has to be interpreted as ejusdem generis. This expression ""otherwise"" would mean
something analogous or ancillary to leave. This absence cannot connote absence on account of any reason other than leave or such reason
analogous or ancillary to leave. It would not include a person posted outside the State on account of his transfer or on deputation. Posting of a
person outside State otherwise than on account of leave or matters ancillary thereto would not be deemed to be an employment in Madhya
Pradesh. Absence on account of transfer or deputation or posting outside State cannot be brought within the purview of Sub-section (5) of Section
3. On account of such posting outside State, the employee cannot be said to be in employment in Madhya Pradesh, even though the Head Office
is within the State either wholly or in part.
14. The liability of the employer to deduct and pay tax under the MP Act on behalf of the employee would arise only when the person satisfies the
test of the definition of ''employee'' read with the definition of ''person'' in Sections 2(c) and 2(f) of the MP Act and not otherwise. Unless the
employee is employed wholly or part in Madhya Pradesh, he would not be liable to pay tax and the employer would not be liable to deduct and
pay tax on behalf of the employee under the MP Act. On the other hand, on account of their posting at Calcutta, they are employed in West
Bengal as defined in Sections 2(b) and 2(f) of the WB Act. Inasmuch as they are employees within the meaning of Section 2(b)(ii) of the WB Act
being persons engaged in employment in West Bengal. Therefore, the provisions of the WB Act would be applicable in their case. By reason of
Section 4, the employer Bhilai Steel Plant, a Unit of SAIL is liable to deduct and pay tax under the WB Act to the authorities entitled to receive tax
under the WB Act.
15. The payment of salary by the employer in Chhattisgarh is not the determining factor; it is the place of employment, which is the determining
factor. Similarly, the receipt of salary by the employee in Chhattisgarh would not be relevant when the employee is engaged in employment in the
State of West Bengal. It is the engagement in employment in the particular State is the determining factor irrespective of the place where the salary
is paid or received or the headquarter is situated.
16. In the present case, the employees of the appellant are employees within the meaning of Section 2(b)(ii) of the WB Act and Section 2(c)(ii) of
the MP Act employed in the State of West Bengal where the employer is also operating within the meaning of the respective definition. As such the
appellants would be liable to pay profession tax in West Bengal under the WB Act and their employer is liable to deduct and pay tax under the
WB Act to the authorities under the WB Act.
17. In these circumstances, the authorities under the WB Act is entitled to levy or charge and collect tax under the WB Act from the appellants
posted in West Bengal during the period of such employment in West Bengal. The State of Chhattisgarh shall transmit the said amount collected for
such period on account of the appellants to the authorities under the WB Act. In case the amount deducted is in excess of the amount chargeable
under the WB Act, in that event, the excess amount would be adjusted against the tax arrear or future payable by the appellants concerned. In
case the amount deducted fall short of the amount payable under the WB Act, in that event, the same shall be dealt with in accordance with law.
However, neither any penalty shall be imposed upon, nor penal action shall be taken against the appellants or their employer for any default or
otherwise, nor any interest shall be charged on the arrears for any period prior to January, 2004. The amount deducted at the rate applicable under
the MP Act in its entirety shall be deposited with or transmitted to the authorities under the WB Act within the month of January, 2004. The
employer/respondent No. 5 shall deduct tax at the rate applicable in West Bengal and transmit the same to the State of West Bengal, for the month
of December, 2003 onwards be deducted by the employer and be transmitted to or deposited with the authorities under the WB Act. The
appellants/employees shall also be at liberty to opt for enrolment u/s 4 of the WB Act. However, we are not inclined to enter into the merits of the
demand made by the authorities under the WB Act. The appellants shall be at liberty to dispute the demand on any ground available in law if they
are so advised and in case it is so needed, it will be open to the appellants to get the dispute resolved through the machinery provided under the
WB Act including WB Taxation Tribunal under the 1987 Act, as the case may be. All points on merit are kept open.
18. In the result, the appeal succeeds and is allowed as above. The judgment and order dated 25th February, 2003 passed in Writ Petition No.
4406 (W) of 2002 appealed against is hereby set aside. The writ petition, thus, succeeds to the extent indicated above and is disposed of in terms
of the above order.
19. There will, however, be no order as to costs.
20. Urgent xerox certified copy, if applied for, be supplied to the parties within seven days from the date of application.
R.N. Sinha, J.
21. I agree.