ORDER

K. Gnanaprakasam, J.

1. The petitioner-Sree Visalam Chit Funds Ltd. is a company incorporated under the Companies Act. The petitioner-company is having its head office at Tirunelveli and Administrative Office at Pallathur and there are branches all over the State of Tamil Nadu. The petitioner has been carrying on business in chit transaction as per the provisions of Chit Fund Act 1982. Prior to the enactment of Tamil Nadu Tax on Professions, Trades, Callings and Employment Act 1992 (Tamil Nadu Act 24 of 1992) (hereinafter referred to as the Act), the local bodies were empowered to levy profession tax. The Madras City Municipal (Corporation) Act, 1919 and other connected Acts, relating to Corporation, the District Municipalities Act 1920, and the Panchayats Act, 1958, contain necessary provisions for levy of profession tax by the local bodies. The provisions, in all these enactments, were more or less similar. Section 93 of the Tamil Nadu District Municipalities Act, 1920 empowers the Municipal Council to levy profession tax. Sub Section (4) of Section 93 states that nothing contained in the section shall be deemed to render a person, who resides within the local limits of one local authority and exercises his profession or calling or transacts business or holds any appointment, within the limits of any other local authority or authorities liable to pay profession tax for more than the highest of the amounts of the tax leviable by any of the local authorities. In such a case, the Government will apportion the tax between local authorities in such a manner as they may deem fit and the decision of the State Government shall be final." There are similar provisions found in the Corporation Acts and the Panchayat Act. The petitioner has been paying the then highest tax of Rs. 125 per half year to the Tirunelveli Municipality. The petitioner is also carrying on business under several other Municipalities and Panchayats and they began to demand profession tax on the ground that as the petitioner is carrying on business within their local area, the petitioner is liable to pay profession tax. The petitioner explained to them that it is not liable to pay tax to each and every local authority and it is sufficient if the highest amount of the tax is paid to any one local authority, but the same was not accepted to by the authorities concerned. Thereafter, the petitioner, addressed a letter to the Government, which in turn, issued GO.MS. No. 1575 dated 19.10.1982 as follows:-

"In the Government Memorandum first read above, it has been held that the provisions in Section 121 (5) of the Tamil Nadu Panchayats Act, 1958, which is analogous to Section 93(4) of the M.D.M. Act, 1920 are applicable only to an individual and not to a company and ordered that the profession tax be levied in every Panchayat where a company/transacts business. In its judgment dated 8.2.1977 in Writ Petition No. 2891/72, the High Court has held that Section 93(4) is applicable to a company also; that it is liable to pay profession tax to only one of the local bodies; and that it need not pay profession tax to every local body where it transacts business as it cannot be made liable for the tax twice.

In view of the judgment of the High Court referred to in para 1 above, the instructions issued in the Memorandum first read above is hereby cancelled."

As per the said GO., it was made clear that Section 121(5) of the Tamil Nadu Panchayats Act, is analogous to Section 93(4) of the Madras District Municipalities Act and therefore, as per the directions of this high court in W.P. No. 2891/72, the company is liable to pay profession tax only to one of the local bodies and not to every local body, where it transacts business, Now, in view of the passing of the Tamil Nadu on Professions, Trades, Callings & Employment Act, 1992, the local bodies are demanding the petitioner to pay profession tax at each and every place where they are having branches and carrying on business. In fact, Virudhunagar Municipality, by its communication dated 24.1.1996, called upon the petitioner to pay profession tax to the said Municipality on the ground that the decision rendered under the repealed sections of the local acts will not be applicable to the new Act. There was also a threat by the Municipality to take action against the petitioner for recovery of tax, which necessitated the petitioner to file this writ petition.

2. The respondents have filed a counter affidavit, wherein it is stated that as per Section 3(1) of the Tamil Nadu Tax on Professions, Trades, Callings and Employments Act, 1992, which came into force on 1.4.1992, there shall be levied and collected by every local authority, a tax on profession, trade, calling and employment.

3. As per Section 3(2), every company, which transacts business within the limits of any local authority for not less than sixty days in the aggregate in any half year, and every person, who is in any half year (a) is engaged actively or otherwise in any profession, trade, calling or employment, (i) within the limits of a local authority for not less than sixty days in the aggregate, or (ii) outside the limits of such local authority, but resides within the limits of local authority for not less than sixty days in the aggregate, (b) resides within the limits of a local authority for not less than sixty days in the aggregate shall pay a half yearly tax levied at such rates, as determined by the local authority.

4. Section 3(5) states that a person, who resides within the limits of any local authority or cantonment and exercises his profession, trade, calling or employment, or transacts business within the limits of any other local authority or authorities or cantonment, liable to tax for more than the higher of the amounts of the tax leviable by any one of the local authorities or cantonment. In such a case, the State Government shall apportion the tax between the local authorities including cantonments, in such manner, as they may deem fit and the decision of the State Government shall be final.

5. Section 3(7)(a) of the Act states that "If a company or person employs a servant or agent to represent it or him for the purpose of transacting business within the limits of a local authority, such company or person shall be deemed to transact business in such local authority and such servant or agent shall be liable for the tax, in respect of the business of such company or person, whether or not such servant or agent has power to make binding contract on behalf of such company or person.

6. It is submitted that every local authority is a separate body and according to Section 3(1) of the Act, they were empowered to levy profession tax within their respective limits. Section 3(5) of the Act, is applicable only to person, who resides within the limits of one local authority and exercises his profession, trade, calling or employment or transacts business in another local authority. It is not applicable to a Company, which transacts business in one local authority through its main office and also transacts business in other local authorities through it branch offices. According to Section 3(7)(a) of the Act, if a company employees a servant or agent to represent it for the purpose of transacting business within the limits of a local authority, such company or person shall be deemed to transact business in such local authority and such servant or agent shall be liable for the tax. It is further stated that the Tamil Nadu Tax on Professions, Trades, Calling and Employments Act, 1992 has been repealed with effect from 1.10.1998 and therefore, the prayer in the writ petition has become infructuous.

Heard both sides.

7. The learned advocate for the petitioner would contend that Sub Section (5) of the Section (3) of the Tamil Nadu Tax on Professions, Trades, Callings, and Employments Act, 1992 is an analogous provision to Sub Section (4) of Section 93 of the Tamil Nadu District Municipalities Act, 1920. Sub Section (5) of Section 3 of the Act states that "nothing contained in this Section shall be deemed to render a person who resides within the limits of any local authority or cantonment and exercises his profession, trade, calling or employment or transacts business within the limits of any other local authority or authorities or cantonment, liable to tax for more than the higher of the amounts of the tax leviable "by any one of the local authorities" or cantonment.

8. The petitioner also relied upon Section 2 (6) of the Act, which defines 'person' which means "any person who is engaged actively or otherwise in any profession, trade, calling or employment in the State of Tamil Nadu and includes a Hindu undivided family, firm, company, corporation or other corporate body, any society, club, or association, so engaged, but does not include any person employed on a casual basis. By pointing out the definition of 'person', it is argued on behalf of the petitioner that the word 'person' used in Section 3(5) would include the company also. Therefore, the petitioner who is a Company, is entitled to the benefit of Section 3(5), which states that if the company, who carries on business within the limits of more than one local authority, is not liable to tax for more than the higher of the amounts of the tax leviable by any one of the local authorities or cantonment. The learned advocate for the petitioner would also rely upon Section 3(1) of the Act, which is a charging Section, and it states that there shall be levied and collected by every local authority a tax on profession, trade, calling and employment. Section 3(2) states that every company which transacts business within the limits of any local authority for not less than sixty days in the aggregate in any half year and every person, who in any half year. This section is controlled by Sub-clause (5) of Section 3 and therefore, the petitioner is not liable to pay profession tax to more than one local authority or cantonment even it carries on business in more than one local authority or cantonment or Municipality. The petitioner is carrying on business at Madras and they have to pay higher of the amounts of the tax to the Madras City Corporation. The other municipalities Corporations and Panchayats, within whose limits, the petitioners carrying on business at several other places, are not entitled to demand for profession tax. It is for the Government to apportion the tax between the local authorities, including cantonments, in such a manner as they may deem fit.

9. It is further submitted that a similar question arose for the consideration of this court in the case of JA. Ismail and Co. Ranipet v. The Commissioner, Ranipet Municipality, Ranipet (WP. No. 2891/1992) and this court by its order dated 19.10.1992 accepted that under Sub Section (4) of Section 93 of the Tamil Nadu District Municipalities Act, the Company is liable to pay profession tax only to one Municipality within the territorial limits of the State of Tamil Nadu, though it carries on its professional activity both in the City of Madras and within the territorial limits of the Municipality of Ranipet and the said order was accepted by the Government and they have issued the GO.MS. No. 1575 dated 19.10.1982, which was extracted supra.

10. Mr. R. Muthukumaraswamy, Additional Advocate General, appearing for the respondents, would submit that if the petitioner or any other company carries on business in more than one place, they are liable to pay profession tax to all the local authorities or cantonments in whose jurisdiction they carry on business. It is submitted that the word 'person' as stated in Section 3(5) is the realistic person, but whereas the definition of 'person' as given in Sub Clause 6 of Section 2 deals with two category of persons viz. (i) the realistic person and (ii) the juristic person. That is why Section 2(6) defines the 'person' as "any person, who is engaged actively or otherwise in any profession, trade, calling or employment in the State of Tamil Nadu and includes a Hindu undivided family, firm, company, corporation or other corporate body, any society, club or association, so engaged but does not include any person employed on casual basis. He also incidentally pointed out that the word 'person' used in Sub-clause (3) of Section 3 is also a realistic person and Sub Clause (4) of Section 3 deals with both company or person i.e. both juristic and realistic person.

11. Reliance is also placed upon the Section 3(7)(a), which states that "if a company or person employs a servant or agent to represent it or him for the purpose of transacting business within the limits of a local authority, such company or person shall be deemed to transact business in such local authority and such servant or agent shall be liable for the tax, in respect of the business of such company or person, whether or not such servant or agent has power to make binding contract on behalf of such company or person." This section deals with both the realistic person and the juristic person. The word 'person' is distributed in many sections under the Act. We are mainly concerned about the word 'person' as it has been used in Section 3(2) and Section 3(5) and Section 3(7)(a). As we have already seen that Sub Clause 2 of Section 3 deals with both the realistic person and the juristic person, but in Section 3(5), it deals with only a person. The word 'person' has got to be understood as per the definition in Section 2(c). It is the contention of the petitioner that the phraseology 'person' used in Section 3(5) is subject to the definition as stated in Section (6), which states that "person means any person..... firm, company, corporation or other corporate body. The petitioner being a company, engaged in the chit business would fall under Section 3(5) and when that be the case, it is very clear that the person/company is liable to pay tax not more than the higher of the amounts of the tax levied by any one of the local authorities or cantonments. The petitioner is ready and willing to pay the higher of the amounts of the profession tax that would be demanded by the Corporation of Madras. As such, it is contended that except the Corporation of Madras, other Municipalities and Corporations in whose jurisdiction, the petitioner has been carrying on business, are not entitled to demand and collect the profession tax from the petitioner.

12. On the contrary, it is argued on behalf of the respondents that Section 3(5) is not applicable to the petitioner, who is "a juristic person" and the definition of 'person' available in Section 2(6) of the Act is not applicable to the petitioner.

13. The learned advocate for the respondents relied upon the case of K.M. Vijayan v. The Union of India, rep. by the Secretary to Government, Ministry of Law, Justice, and Company affairs, New Delhi and Ors., 1993 WLR 580, wherein certain provisions of the Tamil Nadu Tax on Professions, Trades, Callings and Employments Act (24 of 1992) were challenged. The Division Bench of this Court in WP. No. 11690/1992, in para 35, has observed that "Section 3(7) is attacked on the ground that even though a company is not actually transacting business in a particular locality, it shall be liable to pay tax if its agent is transacting the business within the limits of the said local authority. There is no merit in this argument since it is settled law that the agent's business could be treated as the business of the landlord." The said observation relates to the business carried on by the Agents and the same is not helpful to the respondents to sustain their arguments.

14. After analysing the rival submissions and also the decision relied upon the learned advocate for the respondents, it is distilled that no doubt, the petitioner is a juristic person as contended by the learned advocate for the respondent. But, however, whether the juristic person is entitled to the provisions of Section 3(5) is a question. The said section is so clear and it states that if a person, who resides within the limits of any local authority or cantonment and exercises his profession..... not liable to pay tax for more than the higher of the amounts of the tax leviable by any one of the local authorities or cantonments. A plain reading of this Clause 5 of Section 3 would indicate that the word 'person' used in this Section is subject to Section 2(6), wherein the word 'person' includes family, firm, company, etc. and as such the petitioner is a company, which could invoke the provision of Section 3(5). As such, the petitioner is liable to pay tax more than the higher of the amounts of the tax leviable by any one of the local authorities or cantonment and not to all other Municipalities or local bodies, where they carry on business through their branches. In this case, the petitioner is having branches all over the State. But, the petitioner is willing to pay higher of the amount of the tax to the Corporation of Madras. In the said context, the petitioner's contention has got to be accepted. That apart, the doubt that would crop in this case has also been answered by passing of the GO.MS. No. 1575 dated 19.10.1992, wherein a clarification was given that only in view of the order of this court in WP. No. 2891/1992, it is made clear that Section 93(4) is applicable to a company also and that it is liable to pay profession tax to only one of the local bodies and that it need not pay profession tax to any local body, where it transacts business also. The principles enunciated in the earlier decisions and also the Government order would clearly go to show that the petitioner is not liable to tax to more than one local authority and therefore, the demand of the respondent cannot be complied with and the prayer in the writ petition has got to be allowed.

15. In the result, the writ petition is allowed. No costs. Consequently, connected WMP is closed.