ORDER

S.R. Nayak, J.

1. In this batch of four writ petitions, the petitioners have assailed the constitutional validity of the Explanation to the definition of the term "person" defined in clause (j) of Section 2 of the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987 (Act No.22 of 1987), for short 'the Act' as well as Explanation No.1 to the First Schedule of the said Act as amended by Act No. 29 of 1996.

2. The petitioner in WP No. 1304 of 1998 is M/s. Shaw Wallace and Company Limited, a Public Limited Company registered under the Companies Act, 1956. The petitioner company has its principal place of business at Secunderabad in Andhra Pradesh State and it is registered under the Companies Act, 1956. The Deputy Commercial Tax Officer, General Bazar Circle, Secunderabad, the 1st respondent in the writ petition placing reliance on the Explanation to the definition of the "person" under clause (j) of Section 2 as well as Explanation No.1 to the First Schedule of the Act issued the notice GI No.-/97, dated -12-1997 totally demanding payment of a sum of Rs. 3,42,000/- (Rupees three lakhs and forty two thousand only) towards the tax payable under the Act at the rate of Rs. 2,500/- in respect of 68 branches of the petitioner company for the assessment year 1996-97 and at the rate of Rs. 2,500/- in respect of 69 branches of the petitioner -company for the assessment year 1997-98 within seven (7) days from the date of receipt of the notice. By the same notice, the 1st respondent also informed the petitioner- company that it is liable to pay penalty of Rs.30/- for each day of delay. In those circumstances, the writ petition was presented in this Court on 19-1-1998 praying for the following relief:

"For the reasons stated in the accompanying affidavit, it is prayed that the Hon'ble Court may be pleased to issue a writ of mandamus or any other appropriate writ or order or direction declaring the Explanation to the definition of the "person" and as well as "Explanation-I" to the I Schedule to the Andhra Pradesh Tax on Professions, Trades, Callings and Employment Act, 1987 as amended in 1996 as unreasonable and unconstitutional and ultra vires the Article 276(2) of the Constitution of India and accordingly strike them down and further declare that the petitioner is liable to pay profession tax at the rate of Rs. 2,500/-per annum under item 19 of the I Schedule irrespective of number of branches or offices it has in the State of Andhra Pradesh and pass such other order or orders as the Hon'ble Court may deem fit and proper in the circumstances of the case."

3. In WP No.4364 of 2001, the petitioner M/s. Ch. Yegnaiah & Sons is the partnership firm and is engaged in the business of running outlets for petroleum products. The petitioner firm has its principal place of business at Secunderabad in the State of Andhra Pradesh and its registered office is situated at I/A, R.P. Road, Secunderabad -500 003. The petitioner has enrolled as an assessee under Section 6 of the Act read with Rule 4 of the Andhra Pradesh Tax on Professions, Callings and Employment Rules, 1987, for short 'the rules' framed under the said Act. The petitioner firm in addition to its principal business premises at Secunderabad has other petroleum outlets outside Hyderabad and Secunderabad also in places like Jadcherla in Mahabubnagar District, Vijayapuri (N) in Nalgonda District, Kama Reddi in Nizamabad District and Medak in Medak District. The prayer of the petitioner reads:

"For the reasons stated in the accompanying affidavit, it is prayed that the Hon'ble Court may be pleased to issue a writ of mandamus or any other appropriate writ or order or direction declaring the Explanation to the definition of the "person" and as well as "Explanation 1 to the I Schedule to the Andhra Pradesh Tax on Professions, Trades, Callings and Employment Act, 1987 as amended in 1996 as unreasonable and unconstitutional and ultra vires the Article 276(2) of the Constitution of India and hence unconstitutional accordingly strike them down and further declare that the petitioner is liable to pay profession tax at the rate of Rs.2,500/-per annum under item 19 of the I Schedule irrespective of number of branches or offices it has in the State of Andhra Pradesh and pass such other order or orders as the Hon'ble Court may deem fit and proper in the circumstances of the case".

4. In WP No. 17683 of 1997, the petitioner is the Karnataka Bank Limited, a Banking Company registered under the provisions of the Companies Act, 1913, and its registered and head office is at Mangalore in Karnataka State. The petitioner company is the banking company engaged in banking activities and having a net-work of over 300 branches spread through-out India of which 17 branches are in the State of Andhra Pradesh. The petitioner company has obtained Certificate of Enrolment from the Deputy Commissioner of Commercial Taxes, Hyderabad and as the principal place of the business of the bank is in Hyderabad, the profession tax is being paid regularly by the bank in respect of the said branch. When the matter stood thus, according to the petitioner, the Deputy Commissioner of Commercial Taxes, Hyderabad, who is the Assessing Authority under the Act directed the Branch Manager of the Hyderabad Branch of the petitioner bank to see that all the branches of the bank in the State of Andhra Pradesh should get registered under Section 60 of the Act separately and that each branch should pay profession tax of Rs. 2,500/- per annum on the ground that each branch is treated as a "person" and separate assessee under the Act. It is also stated in the affidavit that the branches of the petitioner-bank at Guntur and Adoni in the State of Andhra Pradesh were also served with notices from the respective Deputy Commercial Tax Officers directing them to remit profession tax of Rs. 2,500/- per annum. Under those circumstances, the petitioner-Bank presented WP No.17683 of 1997 in this Court on 28-7-1997 for the following relief:

"For the reasons stated in the accompanying affidavit, the petitioner herein prays that the Hon'ble Court be pleased to issue a writ of mandamus or any other appropriate writ or order or direction declaring that the Andhra Pradesh Tax on Professions, Trades, Callings and Employment Act, 1987 as amended by the 60th Amendment of the Constitution of India amending Article 276(2) as unconstitutional strike it down or in the alternative declaring that Explanation II to Schedule I of Andhra Pradesh Tax on Professions, Trades, Callings and Employment Act, 1987 is unconstitutional and consequently the petitioner Bank is liable to pay tax only in respect of its Principal Office at Hyderabad within the State of Andhra Pradesh and pass such other order or orders as the Hon'ble Court may deem fit and proper in the circumstances of the case".

5. At this stage itself, it may be noticed that the prayer in WP No.17683 of 1997 is not properly framed. The prayer as framed gives an impression that the petitioner is also assailing the constitutional validity of the 60th Amendment of Constitution of India raising ceiling of tax in clause (2) of Article 276 from Rs.250/- to Rs. 2,500/- per annum w.e.f, 20-12-1988. However, Smt. K. Annapurna Reddy, learned Counsel for the petitioner told the Court that the petitioner did not intend to challenge the constitutional validity of the 60th Amendment of the Constitution of India amending Article 276(2) and restricted the challenge only to the constitutional validity of Explanation to the definition of "person" in clause (j) of Section 2 of the Act and the Explanation No. I to the First Schedule of the Act.

6. In WP No.28498 of 1998, the petitioner is the Andhra Pradesh Mahesh Co-operative Urban Bank Limited, Hyderabad, which is a co-operative society registered under the Andhra Pradesh Cooperative Societies Act, 1964 and it is engaged in banking. Its operations are mainly in the twin cities of Hyderabad and Secunderabad and it has got 23 branches at present and these branches are located at different places of the twin cities. The Profession Tax Officer, N.S. Road Circle, Hyderabad, the 2nd respondent herein, served a notice dated 17-9-1998 on the petitioner, requiring the petitioner to pay profession tax for the period 1987 to 1999 in respect of each of its branch at the rate prescribed under the Act. The 2nd respondent demanded the tax at the rate of Rs.250/- per annum in respect of each branch of the petitioner for the years 1987-88 to 1995-96 and at the rate of Rs.2,500/- per annum in respect of each branch for the years 1996-97, 1997-98, and 1998-99 totalling to Rs.2,00,750/-. Under those circumstances, the petitioner filed WP No.28498 of 1998 in this Court on 12-10-1998 for the following relief:

"For the reasons stated in the accompanying affidavit, it is therefore prayed that this Hon'ble Court may be pleased to issue a writ of mandamus or any other appropriate writ, direction or directions, declaring the provisions of the explanation to Section 2(j) of the A.P. Tax on Professions, Trades, Callings and Employments, Act, 1987 as ultra vires the powers of the 1st respondent and unconstitutional and to direct the respondents not to recover profession tax from the petitioner by treating each branch as a separate assessee and pass such other order or orders as the Hon'ble Court may deem fit and proper in the circumstances of the case".

7. The respondents have filed counter affidavits opposing the writ petitions. To state briefly, the contention raised in the counter affidavits is that, the word "person" is not defined in Article 276(2) of the Constitution or in any other part of the Constitution whereas the word "person" is defined under Section 2(j) of the Act for the purpose of the Act. In that view of the matter, it is not permissible to import the meaning of the word person as understood in ordinary parlance or the meaning assigned to that word in clause (42) of Section 3 of the General Clauses Act, 1897. It is permissible for the State Legislature to define the term "person" artificially also for the purpose of taxation and such definition need not be in conformity with the meaning of the word "person" as understood in common law or in ordinary parlance. In that view of the matter, legal fiction introduced in the Explanation to the definition of "person" in Section 2(j) that every branch of a firm, company, corporation or other corporate body, any society, club or association should be deemed to be a person, cannot be condemned as unconstitutional.

8. Sri P. Srinivasa Reddy, learned Counsel for the petitioner appearing for the petitioners in the first two writ petitions would contend that the profession tax payable under the Act is a personal tax relatable to a person as such. Clause (2) of Article 276 of the Constitution of India provides that a total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two Thousand and five hundred rupees per annum, in the light of this constitutional embargo, as regards the maximum tax that may be imposed on a person, the Explanation No. I to the First Schedule of the Act providing for levy of profession tax with reference to each branch or place of business of a person is clearly violative of the mandate of Article 116(2) of the Constitution. The learned Counsel would submit that the word "person" in the context means a single legal entity and in the instant cases, the petitioners in the WP No. 1304 of 1998 being a company registered under the Companies Act, 1956 is one legal person for all practical and legal purposes. Similarly, the petitioner in WP No. 4364 of 2001, being a registered firm, it should alone be treated as a legal person for all practical and legal purposes. The learned Counsel would stress upon the phrase "any one person" occurring in Article 276(2) of the Constitution and would distinguish that phrase from the phrase "any person". The learned Counsel would maintain in view of the clear language used in the Article 276(2) of the Constitution, the Explanation No.1 to the First Schedule of the Act and also the Explanation to the definition of word "person" and treating every branch as a separate "person" is totally violative of Article 276(2) mandate. The learned Counsel would conclude by contending that under no circumstance, the tax payable by each of the petitioners can be more than Rs.2,500/- in aggregate because each of the petitioners alone can be treated as a legal person and not their branches. Therefore, each of the branches of the petitioner company and the firm cannot be treated as a separate "person" for the purpose of taxation and if it is so treated, it would hit by the ceiling incorporated in Article 276(2) of the Constitution of India.

9. Smt. Annapurna Reddy, learned Counsel for the petitioner in WP No. 17683 of 1997 while reiterating the same contentions put forth by Sri P. Srinivasa Reddy, would contend that the petitioner in WP No.17683 of 1997 is a banking company and in the Stale of Andhra Pradesh, it is having the principal place of business at Hyderabad and seventeen branches all over the State of Andhra Pradesh and the petitioner-Karnataka Bank as such is the only legal entity and therefore a "person" and its individual branch cannot be treated as a separate person for taxation purpose under the Act.

10. Sri Vedula Srinivas, learned Counsel for the petitioner in WP No. 28498 of 1998 would while supporting the contentions of the learned Counsel for the other petitioners contend that as per Article 276 of the Constitution, the total amount of tax that can be imposed by the Slate on each person cannot exceed Rs.250/ - before 60th Amendment to the Constitution of India and Rs.2500/- per annum after the 60th Amendment of the Constitution. It was submitted that the petitioner is a "person" and the tax that can be levied by the State Government can be only in respect of the petitioner as a legal entity, but not by treating each branch of the petitioner as a separate person for the purpose of taxation. The word "person" occurring in Article 276(2) includes not only natural person, but also juridical person. The State Legislature is therefore incompetent to enact a deeming provision so as to create a fiction that each branch of the petitioner is to be treated as a separate juridical person on par with the petitioner. Therefore, the learned Counsel would maintain, that the Explanation to Section 2(j) of the Act is violative of the provisions of Article 276 of the Constitution of India and also is violative of Article 14 of the Constitution of India.

11. Sri Bhaskar Reddy, learned Special Government Pleader for Taxes would maintain that the arguments advanced on behalf of the petitioners are totally misconceived inasmuch as the term "person" is not defined in the Constitution, whereas the said term as well as the term "assessee" are defined under the Act. In treating each of the branches of the petitioners in terms of the Explanation to the definition of "person" in Section 2(j) and Explanation No.1 to the First Schedule of the Act, the provisions of Article 276(2) of the Constitution are not violated as contended by learned Counsel for the petitioners. The learned Counsel would maintain that the definition of the word "person" defined in General Clauses Act has no application in interpreting the provisions of the Act for the term "person" is defined under the Act itself. The learned Special Government Pleader would maintain that it is always open to the Legislature to define a "person" or a "thing" artificially for the purpose of taxation and such definition need not be in conformity with the definitions as understood in ordinary parlance nor they should be in conformity with the jurisprudential meaning of those terms. The learned Counsel point out that incidence of tax in the Act is not on income proper, but status and profession-cum-income.

Article 276 reads:

Article 276. Taxes on professions, trades, callings and employments :-- (1) Notwithstanding anything in Article 246, no law of the Legislature of a State relating to taxes for the benefit of the State or of a municipality, district board, local board or other local authority therein in respect of professions, trades, callings or employments shall be invalid on the ground that it relates to a tax on income.

(2) The total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two thousand and five hundred rupees per annum;

(3) The power of the Legislature of a State to make laws as aforesaid with respect to taxes on professions, trades, callings and employments shall not be construed as limiting in any way the power of Parliament to make laws with respect to taxes on income accruing from or arising out of professions, trades, callings and employments".

Article 276 authorises a State or other local authority in a State to levy a tax on professions, trades, callings and employments for which the corresponding legislative Entry is 60 of List II. However, when such tax is imposed on a person, it would virtually amount to a tax on 'income', but income-tax (other than on agricultural income) is an exclusively Union subject, vide Entry 82, List I. Therefore, an express provision is required in this Article to empower the state to levy a tax on professions, trades, callings and employments declaring that such a tax will not be invalid on the ground that it is a tax relating to income, provided it is kept within the limit imposed by clause (2) of Article 276. Clause (3) of Article 276 makes a corresponding reservation in favour of Parliament to impose income-tax on incomes arising from professions, trades, callings and employments.

12. In terms of the authority granted under Article 276, the Andhra Pradesh State Legislature enacted the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987 (Act No.22 of 1987). Prior to enactment of the said Act, profession tax was being levied in the State of Andhra Pradesh as per the provisions of the Hyderabad Municipal Corporation Act (Act No.II of 1956), the Andhra Pradesh Municipalities Act, 1965( Act No.6 of 1965) and the Andhra Pradesh Gram Panchayats Act, 1964 (Act No.2 of 1964). The above local authorities were administering these Acts. With a view to rationalise the levy and collections of profession tax, the Andhra Pradesh State Legislature brought about a single comprehensive legislation by enacting the Act for the levy and collection of the profession tax. The administration of the Act is entrusted to the Commercial Tax Department. The local authorities, after the commencement of the Act, were prevented by virtue of Section 32 of the Act from levying any tax on professions, trades, callings and employments. Certain provisions of the enactments through which profession tax was being levied prior to commencement of the Act were amended to the extent specified in the Second Schedule of the Act as provided under Section 33 of the Act. To compensate the loss occurred to the local authorities consequent upon the enactment of the Act, provision is made under Section 35 of the Act for an annual grant of an amount based on the highest collection of tax, penalties and interest in any year during the three years immediately preceding the commencement of the Act. As stated above, Article 276 of the Constitution of India provides that no law of a State Legislature relating to taxes for the benefit of the State or of a municipality, district board, local board or other local authority in respect of profession, trades, callings or employments shall be invalid on the ground that it relates to a tax on income. However, the maximum amount payable under such a tax shall not exceed Rs.2,500/-per annum. In 1987 when the Act was enacted the maximum amount was Rs.250/-per annum, it has since been enhanced to Rs.2,500/- by Amendment Act 29 of 1996 with effect from 1-8-1996. The constitutional validity of the Act was upheld by this Court in K. Shantappa v. The Government of Andhra Pradesh, (1989) 8 APSTJ 26.

13. The object of the Act is to levy tax on the professions, trades, callings and employments. Tax is levied on the person engaged in any profession, trade, calling or employment. Section 2(b) of the Act defines the word "assessee" as under:

"2. Definitions :--(b) "assessee" means a person or employer by whom tax is payable under this Act;

Section 2(b) of the Act defines the word "person" as under:

(j) "person" means any person who is engaged in any profession, trade, calling or employment in the State of Andhra Pradesh 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 who earns wages on a casual basis.

Explanation :--Every branch of a firm, company, corporation or other corporate body, any society, club or association shall be deemed to be a person".

Explanation No.I to the First Schedule of the Act reads:

"Explanation No.1 :--Notwithstanding anything contained in the schedule, every branch of any self-employed assessee enumerated in items 2 to 21 of the schedule shall be deemed to be a separate assessee for the purpose of levy of profession tax specified in the schedule".

As per the definition, the word "person" includes any person who is engaged in any profession, trade, calling or employment in the State of Andhra Pradesh 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 who earns wages on a casual basis. By force of Explanation to the definition, every branch of a firm, company, corporation or other corporate body, any society, club or association is also treated to be a separate person for the purpose of taxation.

14. The only question that arises for decision is that whether the Explanation to the definition of the term "person" defined under Section 2(j) of the Act and Explanation No. 1 to the First Schedule of the Act are unconstitutional being violative of Article 276(2) of the Constitution. Before dealing with this question, it is appropriate to notice the salient features, parameters and scope of judicial review where the vires of a statute is assailed.

15. In India, the doctrine of "power to tax" is embodied in Article 265 of the Constitution. The Legislature is omnipotent in the exercise of the taxing prerogative, however, subject to the provisions of the Constitution. The right to impose taxes and to determine the circumstances under which they will be done is always a privilege of the concerned Legislature. Article 265 mandates that no tax shall be levied or collected except by authority of law. The power to tax is an incident of sovereignty. Apart from the limitation by the division of the taxing power between the Union and the State Legislature by the relevant entries in the Legislative Lists, the taxing power of either Legislature is subjected to certain limitations imposed by the Constitution. For example, the taxing power of a Legislature must not contravene Article 13 as held in Kunnathat Thathunni Moopil Nair v. State of Kerala, ; it must not deny equal protection of the laws as guaranteed under Article 14 as held in State of Kerala v. Kutty Naha, Haji K.Haji K, ; and it must not be

discriminatory or arbitrary as held in Ayurveda Pharmacy v. State of Tamil Nadu (supra), Regional Transport Officer-cum-Taxing Authority, Rourkela v. Steel Authority of India, 1955 Supp (4) SCC 165; it must not constitute an unreasonable restriction upon the right of business guaranteed under Article 19(l)(g) as held in Chandrakanth Krishnarao Pradhan v. Jasjit Singh, . Apart from these

constitutional limitations on the law making power of the concerned legislature, the other limitations on the taxing power of the Legislature can be culled out from the provisions of Articles 27, 285, 286, 287 and 289.

16. A power conferred on the Legislature to levy tax must be widely construed. It must include the power to impose a tax and select the articles or commodities for the exercise of such power; it must likewise include the power to fix the rate and prescribe the machinery for the recovery of tax including provisions necessary to prevent evasion of tax. The Legislature can also appoint authorities for collecting taxes and may prescribe the procedure for determining the amount of taxes payable by any person. All these provisions are subsidiary to the main power to levy a tax. Nevertheless, all this is subject to the constitutional limitations. Therefore, it becomes necessary that even tax statutes have to satisfy the test of reasonableness prescribed by Article 19(6) and the fundamental right of equality before law guaranteed by Article 14 of the Constitution. In tax matters, the State is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably, as held by the Supreme Court in Balaji v. ITO, , B. Basavalingappa v. State of Karnataka, 1985 (59) STC 1,6 (Kar). The entries in the Legislature Lists of the Constitution were not powers but were only fields of legislation and therefore the widest importance and significance should be given to the language used by the Legislature in various entries. In interpreting the fiscal statutes, we must also remember the provisions in a fiscal statute are not to be so construed as to furnish a chance of escape and a means of evasion as held by the Full Bench of the Karnataka High Court in C. Arunachalam v. CIT, (FB). A Full Bench of this Court in Shri Lakshmi Venkateswara Trading Co. v. State of A.P., 1974 (33) STC 192 (AP-FB) has opined that the power to tax includes the power to pick and choose objects and persons for the purpose of taxation and to grant exemptions. In the matter of taxation laws, as held by Apex Court in M/s. Steelworth Ltd. v. State of Assam, 1962 Supp.(2) SCR 589, Gopal Narain v. State of UP., , Ganga Sugar Corpn. Ltd. v. State of UP., , Mafatlal Industries Ltd v. Union of India, , Khyerbari Tea Co. Ltd. v. State of Assam,

, State of Kerala v. Aravind Ramakant Modawadakar,

, the Courts permit a greater latitude to the

discretion of the Legislature in the matter of classification. State has wide discretion in respect of classification of objects, persons and things for the purposes of taxation. The Legislature can devise classes for the purpose of taxing or not taxing, exempting or not exempting, granting incentives and prescribing rates of tax, benefits or concessions as held by the Apex Court in State of U.P. v. Kamla Palace, AIR 2000 SC 617. Thus, as to what article should be taxed is a question of policy and there cannot be any complaint merely because Legislature has decided to tax certain articles and no others. The freedom of the Legislature is conceded not only in the choice of the articles to be taxed but also as regards the manner and rate of taxation i.e., to prescribe different rates for different categories of goods, persons and transactions, as held by the Supreme Court in Twyford Tea Co. Ltd v. State of Kerala, . It is also well settled that the Court would be slow to interfere with the legislative discretion in the matter of choice of persons, transactions or objects or different rates, even if no reasons are disclosed for such choice, unless it is shown to be capricious or whimsical, in the circumstances of the case.

17. It is well settled law that a law made by the Parliament or Legislature can be struck down by Courts only on two grounds and those two grounds are, viz., (1) lack of legislative competence, and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision. It is also well settled law that no enactment can be struck down by just saying that it is arbitrary or unreasonable. The Supreme Court in State of A.P. v. McDowell & Co., has observed;

".........No Court in the United Kingdom can strike down an Act made by Parliament on any ground. As against this, the United States of America has a Federal Constitution where the powers of the Congress and the State Legislatures to make laws is limited in two ways, viz., the division of legislative powers between the States and the Federal Government and the fundamental rights (Bill of Rights) incorporated in the Constitution. In India, the position is similar to the United States of America. The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the Legislature can be struck down by Courts on two grounds and two grounds alone, viz., (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision. There is no third ground. We do not wish to enter into a discussion of the concepts of procedural unreasonableness and substantive unreasonableness- concepts inspired by the decisions of United States Supreme Court. Even in USA, these concepts and in particular the concept of substantive due process have proved to be of unending controversy, the latest thinking tending towards a severe curtailment of this ground (substantive due process). The main criticism against the ground of substantive due process being that it seeks to set up the Courts as arbiters of the wisdom of the Legislature in enacting the particular piece of legislation. It is enough for us to say that by whatever name it is characterised, the ground of invalidation must fall within the four comers of the two grounds mentioned above. In other words, say, if an enactment is challenged as violative of Article 14, it can be struck down only if it is found that it is violative of the equality clause/equal protection clause enshrined therein. Similarly, if an enactment is challenged as violative of any of the fundamental rights guaranteed by clauses (a) to (g) of Article 19(1), it can be struck down only if it is found not saved by any of the clauses (2) to (6) of Article 19 and so on. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating an Act. An enactment cannot be struck down on the ground that Court thinks it unjustified. Parliament and the Legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The Court cannot sit in judgment over their wisdom. In this connection it should be remembered that even in the case of administrative action, the scope of judicial review is limited to three grounds viz., (i) unreasonableness, which can more appropriately be called irrationality, (ii) illegality and (iii) procedural impropriety (Council of Civil Service Unions v. Minister of Civil Service, 1985 AC 374 = (1984) 3 All ER 935 - (1984) 3 WLR 1174 which decision has been accepted by this Court as well). The applicability of doctrine of proportionality even in administrative law sphere is yet a debatable issue. (See the opinions of Lords Lowry and Ackner in R. v. Secy, of State for Home Deptt. Ex P Brind, 1991 AC 696 - (1991) 1 All ER 720). It would be rather odd if an enactment were to be struck down by applying the said principle when its applicability even in administrative law sphere is not fully and finally settled. It is one thing to say that a restriction imposed upon a fundamental right can be struck down if it is disproportionate, excessive or unreasonable and quite another thing to say that the Court can strike down enactment if it thinks it unreasonable, unnecessary or unwarranted".

In S. Bharat Kumar and others v. Government of Andhra Pradesh, (DB), a Division Bench of this Court speaking through one of us (S.R. Nayak, J.) has observed in para 27 as follows:

"27. It is trite law that mandamus is the proper relief to be asked for where the petitioner seeks a declaration that an 'Act' or "Ordinance' is unconstitutional and a consequential direction restraining the State and its officers or the concerned statutory authorities, as the case may be, from interfering or giving effect to the provisions of such unconstitutional law. It is also trite law that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of constitutional principles and limits, whether it is a pre-Constitution or post-Constitution law. This position is well settled by the judgments of the Apex Court in Chiranjit Lal v. Union of India, (1950) SCR 869. In Madhu Limaye v. Sub-Divisional Magistrate, and in Cf.

Rao Bahadur v. State of U.P., (1953) SCR 1188, the Supreme Court held that the burden of proving all the facts which are requisite for the constitutional invalidity is upon the person who challenges the same. However, it is not to state that by reason of the presumption in considering the validity of the impugned law, the Court will be restricted to the pleadings only. The Court would be free to satisfy itself whether under any provision of the Constitution the impugned law can be sustained having due regard to the circumstances in which such law was enacted, as opined by the Supreme Court in Burarkar Coal Co, v. Union of India, , Hamdard Dawakhana v. Union of India,

. For the same reason, the Court should, if

possible, make such a progressive and/or narrow construction of the impugned statute as would sustain its constitutional validity, as opined by the Supreme Court in Sunil v. Delhi Admit, AIR 1978 SC 1675. uK Supreme Court in Naresh v. State of Maharashtra, , has opined that the Court should not cover

grounds or make observations, on points not directly involved in the proceeding, thereby meaning that unless a point arises for consideration and decision out of the pleadings of the parties, the Court shall not express its opinion on such point. It is well settled by the judgments of the Supreme Court in Diamond Sugar Mills v. State of U.P., AIR 1962 SC 652, Navinchandra v. Commr. of IT, in Peerless v. RBI, , that

when the vires of an enactment is challenged, and there is any difficulty in ascertaining the limits of a Legislature's power, the difficulty must be resolved, so far as possible, in favour of the legislative body, putting the most liberal construction upon the relevant legislative entry so that it may have the widest amplitude, and looking at the substance of the legislation.

The Court has further held in para (40) as follows:

".......It is true that it will become the duty of the Constitutional Courts under our Constitution to declare a law enacted by the Parliament or the State Legislature as unconstitutional when the Parliament or the State Legislature has assumed to enact a law which is void, either from want of constitutional power to enact it, or because the constitutional forms or conditions have not been observed, or where the law infringes the fundamental rights enshrined and guaranteed in Part-III of the Constitution or any other substantive constitutional provisions. It is needless to state that Legislature and Judiciary are co-ordinate organs of the State, of equal dignity and status under the constitutional scheme. It is permissible for the Constitutional Courts to declare legislative enactments unconstitutional and void in some cases, but not because the judicial power is superior in degree or dignity to the legislative. The Court while declaring a law as invalid or unconstitutional is only enforcing the legislative will and the limits imposed by the Constitution on the law-making bodies. No Court can declare a statute unconstitutional and void, solely on the ground of unjust and harsh provisions, or because it is supposed to violate some natural, social, political or economic rights of the citizen, unless it can be shown that such injustice is, in fact, prohibited or such rights guaranteed or protected by the Constitution. Strictly speaking, the Courts are not guardians of all kinds of rights of the people of the State, unless those rights are secured and protected by some constitutional provision which comes within the judicial cognizance. In 'A Treatise on the Constitutional Limitations' by Thomas M. Cooley, it is stated that the Court cannot run a race of opinions upon points of right, reason, and expediency with the law-making power, and that any legislative act which does not encroach upon the power apportioned to the other organs of the State, being prima facie valid, must be enforced, unless restrictions upon the legislative power can be pointed out in the Constitution itself, and the case shown to come within them. In the same Treatise, it is also stated that the Courts are not at liberty to declare statutes void because of their apparent injustice and impolicy, neither can they do so because they appear to the minds of the Judges to violate fundamental rights of Republican Government, unless it shall be found that those rights are placed beyond legislative encroachment by the Constitution nor are the Courts at liberty to declare an enactment unconstitutional, because in their opinion it is opposed to a spirit supposed to pervade the Constitution, but not expressed in words or discernible from the context. It is not permissible to limit the legislative power of the Legislatures by judicial interposition, except so far as the expressed words a written Constitution gives that authority to the Court. In 'A Treatise on the Constitutional Limitations' by Thomas M. Cooley, it is aptly stated that the law-making power of the State recognises no restraints, and is bound by none except such as or imposed by the Constitution itself placing reliance on the opinion handed down in Sill v. Village of Coming, 15 NY 303. The above noted well recognised principles and propositions fully answer many of the aspects of the second contention urged before us by the learned Counsel for the petitioners."

It is relevant to notice that in the field of taxation, the Courts have permitted the Legislature to exercise an extremely wide discretion in classifying items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes as could be seen from the decisions in East India Tobacco Company v. State of A.P., , P.M. Ashwathanarayan Shetty v. State of

Karnataka, 1988 Supp (3) SCR 155, Federation of Hotel and Restaurant Association of India v. Union of India, , Kerala Hotel and Restaurant Association v. State of Kerala, . The Supreme Court in Gannon Drunkenly & Co. v. State of Rajasthan, , has observed:

"A question has been raised whether it is permissible for the State Legislature to levy tax on deemed sates falling within the ambit of Article 366(29A)(b) by prescribing a uniform rate of tax for all goods involved in the execution of a works contract even though different rates of tax for all goods involved in the execution of a works contract even though different rates of tax are prescribed for sale of such goods. The learned Counsel for the contractors have urged that it would not be permissible to impose two different rates of tax in respect of sale of the same article, one rate when the article is sold separately and a different rate when there is deemed sale in connection with the execution of a works contract. On behalf of the States, it has been submitted that it is permissible for the State to impose a particular rate of tax on all goods involved in the execution of a works contract which may be different from the rates of tax applicable to those goods when sold separately. In the field of taxation the decisions of this Court have permitted the Legislature to exercise an extremely wide discretion in classifying items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes".

In the premise of the above well settled principles governing judicial review of the constitutionality of the statute, now we proceed to consider the contention raised in these writ petitions. The expression "tax in respect of professions, trades, callings or employments" occurring in clause (1) of Article 276 is very wide. A tax may be imposed on professions and employments, including service, even though the employee is already paying income-tax as held by the Supreme Court in Mr. Kamta Prasad Agarwal v. Executive Officer, Ballabagarh AIR 1974 SC 685 = (1974) 4 SCC 440 or the taxable income is computed according to the provisions of the Income Tax Act as held in Ram Bachan Lal v. State of Bihar, . The tax may be imposed on trades or callings, e.g., persons carrying on the trade of husking, milling or grinding of grains as held in District Council v. Kishorilal Laxminarayan, AIR 1949 Nag. 190, or on the subject-matter of trade, e.g., each bale of ginned cotton as held in Secretary, Municipal Committee v. The New East India Press Co. Ltd., AIR 1948 Nag. 215, Municipality of Chopda v. Motilai Manekchand, or on the income arising from trade or profession as held in District Council v. Kishorilal Laxminarayan (supra). The basis of a tax under Article 276 and therefore under the provisions of Act is either the occupation or the income derived from it. It is so held by the Kerala High Court in Abraham, T.K. v. State of T.C., . Sri P. Srinivasa Reddy, learned Counsel would draw our attention to paras 18, 20 and 24 of the judgment of the Supreme Court in Bharat Kala Bhandar Ltd. (Private) Hirabai v. Municipal Committee, Dhamangaon, , to highlight the nature of profession tax. The

learned Counsel would also cite the judgment of the Apex Court in Ballabhadas Mathurdas Lakhani and others v. Municipal Committee, Malkapur, , to contend that under no circumstance, the tax liability as regard - profession tax under the Act would exceed more than Rs.2,500/-per annum and per person.

18. There cannot be any quarrel with the principle that the State Legislature is incompetent to impose profession tax under the Act at a rate more than Rs.2500/- per person, per annum by virtue of the ceiling contained in Article 276(2) of the Constitution. If the fiction introduced in the Explanation to the definition of the word "person" and the Explanation No. 1 to the First Schedule of the Act is held to be unconstitutional as contended by the learned Counsel for the petitioners, then only the mandate of Article 276(2) would be violated and it would become necessary for the Court to declare by writ of mandamus that the Explanation to the definition of the word "person" and the Explanation No. 1 to the First Schedule of the Act as unconstitutional. Therefore, the primary question for our consideration is whether the Andhra Pradesh State Legislature has the legislative competence to introduce the fiction in the Explanation to the definition of the word "person" and also Explanation No. 1 to the First Schedule of the Act or whether by introducing such fiction, it has exceeded its legislative power and thereby transgressed the constitutional limitation.

19. In answering the above question, to repeat again, the Court should always remember that the State has wide discretion in respect of classification of objects, persons and things for the purpose of taxation. It must also be remembered that the Legislature can devise classes for the purpose of taxing or not taxing, exempting or not exempting, granting incentives and prescribing rates of tax, benefits and concessions. Essentially, the question as to what article is to be taxed is always a question of legislative policy and there cannot be any complaint merely because Legislature has decided to tax certain things and articles only in certain manner and no others. It is equally important to notice that the freedom of the Legislature is always conceded by the Courts not only in the choice of the things or articles to be taxed, but also as regards the manner and rate of taxation. There is no merit in the contention that the Legislature lacks legislative competence to enact fiction that every branch of a firm, company, corporation or other corporate body, any society, club or association shall be deemed to be a person and therefore the Explanation to the definition of the term "person" violates the mandate of Article 276(2) of the Constitution. The Legislatures often resort to incorporate fictions in the statutes for the purpose of legislation including legislations in the field of taxation. As pointed out supra, the Supreme Court in the case of Gannon Drunkenly & Co, v. State of Rajasthan (supra) upheld the deeming clause and rejected the argument that it would not be permissible to impose two different rates of tax in respect of sale of the same article, one rate when the article is sold separately and a different rate when there is deemed sale in connection with the execution of a works contract.

20. In Maddukuri Venkatarao v. State, (FB), it was contended before the Full Bench of this Court that the definitions of "family unit" and "person" in Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, are beyond legislative competence of the State Legislature and contravenes the definition of "person' in Section 342 of the General Clauses Act read with the provisions of the 2nd proviso to clause (1) of Article 31-A of the Constitution. The Division Bench rejected that contention and upheld the constitutional validity of the above definitions. The Full Bench in para (136) observed:

"136. But there is no merit in any of the submissions of the learned Counsel. So far as the concept of the individual is concerned, the Act which relates to agrarian reform, deals with the individual's rights whether he is a member of the family unit or not. For the purpose of imposing the ceiling, the Legislature thought fit to adopt different devices for fixing the ceiling limit with regard to the lands held by the various persons as defined in the Act. It is competent for the Legislature to define a person in the Act and create an artificial unit. The definition of a 'person' in General Clauses Act, would not restrict the powers of the State Legislature to define 'a person' and adopt a meaning different from or in excess of the ordinary acceptation of the word or as defined in the General Clauses Act".

In Inder Singh v. State of Punjab, , it was contended that under Hindu Law every coparcener in a Hindu undivided family acquires a right in the property of such coparcenary on birth and is entitled to a right of joint possession and enjoyment of its entire property, that Section 32-KK. deprived such a coparcener of his right of property in that that it took away the rights of the descendants of the land owner to claim for themselves the permissible area and vest them in the head of the family alone so that there was not only an infringement of the right to hold property but also discretion in favour of the head of the family infringing thereby Article 14. It was also contended that the said Section infringed the provisions of Articles 31 and 15(1) of the Constitution. Section 32-KK, the validity of which was challenged in that case, reads:

"Notwithstanding anything contained in this Act or in any other law for the time being in force.

(a) where, immediately before the commencement of this Act, a landowner and his descendants constitute a Hindu undivided family, the land owned by such family shall, for the purposes of this Act, be deemed to be the land of that landowner and no descendant shall as member of such family, be entitled to claim that in respect of his share of such land he is a land owner in his own right".

The Supreme Court upheld the validity of tlie said Section though it created a fiction whereby the land owned by the Hindu undivided family was deemed to be the land of the landowner. The Supreme Court observed that the fiction was enacted for a limited purpose of the Act, that the result of the fiction was that no descendant as a member of such family would be entitled to claim that in respect of his share, he was landowner in his own right, and that the section would adversely affect the rights of the descendants of a landowner. The Supreme Court further held that Section 32-KK treats such a family as one unit equating the landowner and his descendants with an individual landowner depriving by such equation the descendant of the right to hold a ceiling area for himself. Although the Supreme Court came to the conclusion that such a provision prima facie infringed Article 19(1)(f) and Article 31 and therefore would be hit by Article 13, it held that the provisions of Section 32-KK were protected by Article 31-A of the Constitution. In Jagannath v. Authorised Officer, Land Reforms, Madurai, , the Supreme Court rejected a contention that the

lands of two persons could not be clubbed for fixing the ceiling area. It is relevant to note that the Supreme Court in Hariprasad v. A.D. Divekar, AIR 1957 SC 121, held that it is permissible for the Legislature to introduce a fiction for the purpose of legislation and such artificial definition might include a meaning different from or in excess of the ordinary acceptation of the word which was the subject of definition. In view of the aforesaid rulings, the Court cannot accept the contention of the learned Counsel for the petitioners that the State Legislature lacks competence to define a "person" so as to include even a branch of a firm, company, corporation or other corporate body, any society, club or association. In taking this view, we are also fortified by the judgment of the Calcutta High Court in Dayamaya Devi v. State of West Bengal, 1974 78 Cal. WN 639 and also the judgment of the Karnataka High Court in Bhaskar v. State of Karnataka, . We are therefore unable to agree with the submission of the learned Counsel for the petitioners that the Explanation to the word "person" as defined under Section 2(j) of the Act and Explanation No. 1 to the First Schedule of the Act offend the provisions of clause (2) of Article 276 of the Constitution.

21. We also do not find any merit in the contention of Sri Vedula Srinivas that the Andhra Pradesh State Legislature in enacting the Explanation to definition of the word "person" and also Explanation No. 1 to the First Schedule of the Act acted arbitrarily and irrationally violating Article 14 postulates of the Constitution, and therefore, they are liable to be struck down as unconstitutional. Firstly, it is well settled law that no statute enacted by a competent Legislature can be struck down by just saying that it is arbitrary or unreasonable. Legislative competence is essentially a question of power and a law made by Parliament or State Legislature can be struck down by Constitutional Courts only on two grounds, viz., lack of legislative competence and violation of any of the fundamental rights guaranteed in Part HI of the Constitution or any other constitutional provision or limitation. The consequence of the incorporation of the fiction in Explanation to definition of the word "person" and also Explanation No. 1 to the First Schedule of the Act is not to tax a person at a rate higher than Rs.2,500/- per annum, per person, but to treat even a branch of a firm, company, corporation or other corporate body, any society, club or association as a separate person, and therefore, a separate "assessee" within the meaning of Section 2(b) of the Act and the Andhra Pradesh State Legislature has undoubtedly the legislative power to adopt such a devise of taxation and in adopting such devise, the Andhra Pradesh State Legislature has not violated the mandate of Article 276(2) of the Constitution.

22. In the result and for the foregoing reasons, we dismiss, the writ petitions with no order as to costs.