ORDER
Shivashankar Bhat, J.
1. Thepetitioners challenge the validity of Entry 20C of the Schedule to the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 ('the Act' for short) as amended by Karnataka Act 15 of 1989 and further seek a declaration that the imposition of the tax under the Act at the rate of Rs. 2,500/- per annum on the Nursing Home called, 'Dr. Sattur's Sushrushalaya Nursing Home' as invalid; consequently refund of the tax paid at the said rate is sought.
2. Section 3(1) of the Act provides for the levy and collection of a tax on professions, trades, callings and employments. As per Section 3(2), liability to pay the tax is fastened on every person who exercises any profession or calling or is engaged in any trade or holds any appointment (public or private), or is employed in any manner in the State, specified in the second column of the schedule. Thus, the liability to pay the tax is imposed, inter alia, on the person who exercises any calling or is engaged in any trade, specified in the second column of the schedule to the Act. Persons referred in serial Nos. 2,3 and 8 of the Schedule who have attained sixty five years of age are exempted from payment of tax, as per the 1st proviso to Section 3(2). Serial Nos. 2 and 3 of the Schedule refers to Legal Practitioners, Medical Practitioners, Technical Consultants, etc. and serial No. 8 refers to self-employed persons in the motion picture industries. The idea is to exempt persons who exercise any profession or calling requiring certain special knowledge or skill in the subject concerned and who attain the age of 65 years. Legislature in its wisdom has resolved not to impose the burden of tax on such persons (who are above 65 years of age), having regard to the peculiarities of the particular profession or calling. These professions of law, medicine, and self-employment in motion picture industry are classified distinctly and treated differently from other kinds of trade or employment.
3. Earlier, the maximum rate of profession tax permitted to be leviable by the State was Rs. 250/- per annum as per Article 276(2) of the Constitution. This was subsequently enhanced to Rs. 2,500/- per annum. Thereafter, State Legislature also amended the Act, varying the rates of tax in the schedule to the Act.
4. The rate of tax levied under Entry 20C was Rs.250/-, earlier. By the Amended Act 15 of 1989, Entry 20C was subdivided as 20C(a) and 20C(b) and the rate was increased to Rs.2,500/- per annum, in respect of Entry 20C(a). Earlier Entry 20C read as :
'Nursing homes, X-ray clinics, Pathological Testing Laboratories and Hospitals, other than those run by the State or Central Government.'
and the rate of tax was Rs. 250/-per annum. As per the amendment, Entry 20C(a) came to be read as :
'Nursing homes and Hospital other than those run by the State or Central Government.'
and the rate of tax against this is shown as Rs. 2500/- per annum. Entry 20C(b) as inserted, states,
'Pathological testing laboratories and X-Ray clinics'
and tax rate is Rs. 250/- per annum. The contentions of the petitioners are :--
I. All other entries in the second schedule refer to the persons who carry on a particular trade or exercise a profession, etc. But Entry 20C refers to the 'Nursing Home' as the one which has to pay the tax and 'Nursing Home' is an impersonal thing incapable of paying the tax. Under Section 3(2), liability to pay the tax is on the 'person' who exercises any profession or calling or is engaged in any trade, etc. specified in the second column of the schedule; therefore second column of the schedule contains only the persons liable to pay. If by no stretch of imagination the entry in the said second column could refer to a person, then the liability imposed by the charging section becomes unworkable; further, the particular entry in the second column of the schedule will be ultra vires Section 3 as it is beyond the scope of Section 3(2).
II. Entry 20C is liable to be declared as unconstitutional, as it offends Article 14 of the Constitution. This contention is elaborated thus :--
(i) The activity in a Nursing Home is in no way different from an activity of a medical practitioner. Dr. Sattur who runs the Nursing Home in question is a medical practitioner. As a medical practitioner, the tax payable by him is only Rs. 250/- per annum as per Entry 2(b). But the same activity carried on by him in a place calling it as a 'Nursing Home' invites a higher taxation under Entry 20C(a). The levy of tax, depending upon the place of carrying on one's profession is arbitrary.(ii) This apart, Dr. Sattur has already attained the age of 65 years; therefore as a medical practitioner he is not liable to pay the tax. But, by referring his activity as a 'Nursing Home', tax is levied, under Entry 20C; this, again is a statutory classification for which there is no real basis, (iii) Article 14 is also contravened, because, Nursing Homes are not classified rationally. Irrespective of their income, capacity, location, nature of the facilities available, and such other relevant factors which distinguishes one Nursing Home from another, all are treated similarly and same rates of tax is levied; thus lack of classification renders the impugned Entry void.
Re : Contention I: Sri Kotavale, learned counsel for the petitioners, took us through the various entries in the second schedule. Invariably, the second column refers to living persons or artificial persons such as 'legal practitioners, 'race horse owners', 'self-employed persons', 'employers of establishments', 'owners of oil-pumps', 'firms', 'companies', 'co-operative societies', etc. But when it conies to Entry 20B, for the first time, the subject of activity alone is referred in the 2nd column, as 'photo laboratories, film processing laboratories and photo studios'. Again, according to Sri Kotavale, under Entry 20C, reference is to 'Nursing Homes, etc.' Similarly under Entry 20D, reference is made to 'Beauty Parlours, Dry Cleaners and Interior Decorators'. Entry 21 is the residuary entry which reads : 'Persons other than those mentioned in any of the preceding entries, who are engaged in professions, trades, callings or employments as the State Government may from time to time by notification specify'. The learned Counsel argued that having regard to the language of Section 3(2) and the several entries in the schedule, the second column should contain only the 'person' who is liable to pay the tax with reference to his trade, calling, profession, etc. This contention is sought to be strengthened by reading the definition of the word 'person' in Section 2(h), which reads :
' 'person' means any person who is engaged in any profession, trade, calling or employment in the State of Karnataka 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.'
5. It is true that 'Nursing Home' is an inanimate thing; it is not even an artificial or legal person like a company; it is not deemed to be a 'person' statutorily also. But, on that ground alone, would this Entry 20C become ultra vires S. 3(2)?
6. It is now, a well known cannon of construction, that unhappily worded statutory provisions, as well, are to be properly understood and applied by the Courts. A statute should be read as a whole to ascertain its true meaning and content. The principle is brought out by the learned author, G.P. Singh in his 'Principles of Statutory Construction' (2nd edition) at page 17 :
'It is a rule now firmly established that the intention of the legislature must be found by reading the statute as a whole. The rule is referred to as an 'elementary rule' by VISCOUNT SIMONDS; a 'compelling rule' by LORD SOMER VELL OF HARROW; and a 'settled rule' by B. K. MUKHERJEE, J. 'I agree', said LORD HALSBURY, 'that you must look at the whole instrument inasmuch as there may be inaccuracy and inconsistency; you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it.' And said LORD DAVEY : 'Every clause of a statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter'. It is spoken of construction 'ex visceribus aetus'. 'It is the most natural an genuine exposition of a statute', laid down LORD COKE 'to construe one part of a statute by another part of the same statute, for that best expression the meaning of the makers'. To ascertain the meaning of a clause in a statute the court must look at the whole statute, at what precedes and at what succeeds and not merely at the clause itself, and, 'the method of construing statutes that I prefer', said LORD GREENE, M. R. 'is to read the statute as a whole and ask oneself the question : 'In this state in this context, relating to this subject-matter, what is the true meaning of that word?' As stated by SINHA, C.J. : 'The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs.'
7. Several English and Indian decisions are cited in support of the above principle, and it is unnecessary to repeat them, again here.
8. If for any reason, language is found to be defective, the courts ought not to feel helpless in effectuating the legislative intention. The relevant principle got momentum with its enunciation by Lord Denning in Seaford Court Estate Ltd.'s case (1949) 2 All ER 155. In Girdharilal and Sons v. Balbir Nath Mathur, : [1986]1SCR383 , the Supreme Court has quoted the principle in the very words of English Judges :
'In Seaford Court Estates Ltd. v. Asher, (1949) 2 All ER 155, Lord Denning, who referred to Plowden's Reports already mentioned by us, said :
'Whenever a statute comes up for consideration, it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity... A Judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a construction of the social conditions which gave rise to it and of the mischief which it was passed to remedy and then he must supplement the written word, so as to give force and life to the intention of the legislature. Put into homely metaphor, it is this : A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the contexture of it they would have straightened it out? He must then do what they would have done. A judge should not alter the material of which the Aet is woven; but he can and should iron out the creases.'
In Rugby Joint Water Hoard v. Foottit (1972) 1 All ER 1057 Lord Simon of Claisdale said :
The task of the Courts is to ascertain what was the intention of Parliament, actual or to be imputed, in relation to the facts as found by the Court..... But on scrutiny of a statutory provision, it will generally appear that a given situation was within the direct contemplation of the draftsman as the situation calling for statutory reguation; this may be called the primary situation. As to this, Parliament will certainly have manifested an intention -- The Primary Statutory Intention. But situations other than the primary situation may present themselves for judicial decisions secondary situations. As regards these secondary situations, it may seem likely in some eases that the draftsman had them in contemplation; in others not. Where it seems likely that a secondary situation was not within the draftsman's contemplation, it will be necessary for the Court to impute an intention to Parliament in the way I have described, that is, to determine what would have been the statutory intention if the secondary situation had been within Parliamentary contemplation (a secondary intention).'
9. The legislative intention is quite clear,in the instant case. The subject of the tax is theprofession, trade, calling, employment, etc. Atrade or a profession, as such cannot pay thetax. Therefore the tax is payable by the personwho is engaged in the particular profession ortrade, etc. A harmonious reading of Section 3(1), 3(2) and the Schedule brings out thereal content of the Saw and the persons liableto pay the tax under the Act. Assuming thatEntry 20C (a) is not worded specifically tocover the person who is engaged in running aNursing Home, the lacuna if any in thewording of the Entry can be filled up byreading it reasonably with reference to theentire scheme and object of the Act.
10. We don't find, in fact any such defect in the language of Entry 20C(a), so as to make it unworkable or to remove it from the setting of the Schedule to the Act. Entry 20C (a) reads :
'Nursing Home and Hospital other than those run by the State or Central Government.'
This conveys the meaning quite clearly that the tax is payable by the person who runs the Nursing Home or the Hospital, except the Nursing Home and Hospital run by the State or Central Government. Entry 20C(a) has to be understood as saying :
'Person who runs Nursing Home and Hospital other than those run by the State or Central Government.'
11. In view of this meaning attributable to Entry 20C(a), the contention of the petitioner is liable to be rejected.
Re : Contention II: A Nursing Home cannot be compared to the normal and ordinary activity of a medical practitioner. A general practitioner examines the patient, prescribes the treatment and sometimes, may treat the patient, 10 some extent in his clinic. But there is no organised establishment with various facilities to have the 'in patients' in the clinic. No beds are provided; no nurses to look after the patients. A Nursing Home is an organised establishment with various facilities to treat the patients. Normally, the Nursing Homes provide the services of more than one doctor and specialists are being invited to treat the patients, personal and nursing care are provided for persons (such as those who are aged or chronically ill). Capital investment required for a Nursing Home is far higher than is required for a medical practitioner's clinic. While the medical practitioner is a self employed person, requiring medical qualifications, a person who sets up and runs a Nursing Home may be only an investor in the business without any academic qualification, who employs doctors, nurses and others in the Nursing Home. Running of a Nursing Home is more in the nature of an organised business, and it is common to find, even incorporated companies who have taken up establishing the Nursing Homes or Hospitals.There is no comparison at all between Entry 2 and Entry 20C(a) and hence question of discrimination between the two does not arise.
12. The unit of taxation is the particular trade, profession, calling, etc. and therefore, by treating a particular trade, profession or calling as a single unit, without further classifying it into different categories, cannot be per, sc discriminatory. In the sphere of taxation, legislature has a wide discretion to choose the subject of taxation; microscopic clarification of the subject depending upon the capacity is not absolutely necessary. The alleged discrimination should be established as patently arbitrary, and hostile to the very subject of taxation, before, it can be struck down. Even a small Nursing Home would require a couple of beds, one or two nurses and a few employees and a person who could organise such a Nursing Home and paying rent for the place (or investing on the premises), should be capable of paying at least Rs. 2,500/- per annum as tax for the trade or business in which such a person has invested quite a good amount. Petitioners have not shown that this Nursing Home is incapable of setting apart, on an average, a sum of Rs. 7/- per day towards this impugned tax.
13. A similar contention against treating all 'companies' alike under Entry 19 came up before Rajendra Babu. J. in Banashankary Leasing Co. Ltd. v. Stale of Karnataka (1989) 3 Kant LJ 562. After considering several decisions of the Supreme Court, the learned Judge, while rejecting the challenge to Entry 19, observed at page 564 :
'But in case of companies and firms a distinction has been maintained on the basis they are composed of more than one individual and enjoy a superior status in the business world, thus having greater capacity to pay tax than an individual. It is too well settled today to need any elaboration, as has been held in S. Kodar's case : [1975]1SCR121 and in Hoechest Pharmaceuticals case : [1985]154ITR64(SC) that a person who is economically superior can pay higher rate of tax and such classification has been held to be good.'
As to the argument based on lack of classification, It was held :
'Refusal to classify is one thing and it bears on constitutionality; but as to whether there is need to make further classification to work out perfect justice is left to State. It is too well established that in modern State particularly when exercising powers of taxation the State has to deal with complex factors relating to the objects to be taxed, the quantum to be levied, the social and economic policies that such taxation is designed to achieve and so on and so forth and therefore the Court has given wide latitude to the legislature in the matter or levy of taxes and their classification therefor. What is attacked here is the flat rate of tax levied on companies at Rs. 2,500/- per annu. It is not as if that flat rate of taxation is unknown to taxation law and such taxation has been upheld depending upon the extent of levy. In the present case, the maximum tax that is levied is at Rs. 2,500/-. Considering that a company has to carry on its activities being entitled to several privileges an annual tax at the rate of Rs. 2,500/- cannot be said to be excessive at all. To make classification on the basis of several factors referred to in the course of the arguments of the learned counsel for the petitioners may have been an excellent way to bring companies to tax, which may be a perfect way of doing justice, but merely in the absence of that it cannot be said that the legislative Act is invalid. In Murthy Match Works case : 1978(2)ELT429(SC) referred to earlier, there was a classification already in existence between those who are carrying on the activities by using power and those who are not, the classification was withdrawn. The Supreme Court observed while withdrawing the classification that if there is a broad classification that is enough and there need not be any micro classification.'
This decision is affirmed by the Bench vide ILR 1991 Kant 2238.
14. In Twyford Tea Co. Ltd. v. State of Kerala, : [1970]3SCR383 , a flat rate of taxation on plantations, irrespective of their income was upheld. At page 1138, the Supreme Court pointed out that the 'burden of proving discrimination is always heavy and heavier still when a taxing statute is under attack'. (Underlining is ours). An American decision was quoted, as laying down the, principle :
'In taxation even more than in other fields. Legislatures possess the greatest freedom in classification. The burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it.'
Again, the Supreme Court observed :
' ' 'A statute providing for the assessmentof one type of intangible at its actual valuewhile other intangibles are assessed at theirface value does not deny equal protectioneven when both are subject to the same rate oftax'. The decisions of the Supreme Court inthis field have permitted a State Legislature toexercise 'an extremely wide discretion' inclassifying propety for tax purposes 'so longas it refrained from clear and hostile discrimination against particular persons or classes.''(Emphasis (herein ' ') added). Theburden is on a person complaining of discrimination. The burden is proving not possible'inequality' but hostile 'unequal' treatment.This is more so when uniform taxes are levied.It is not proved to us how the differentplantations can be said to be 'hostility orunequally' treated. A uniform wheel tax oncars does not take into account the value ofthe car, the mileage it runs, or in the case oftaxis, the profits it makes and the miles pelgallon it delivers. An Ambassador taxi and aFiat taxi give different out-turns in terms ofmoney and mileage. Cinemas pay the sameshow fee. We do not take a doctrinaire view ofequality. The Legislature has obviouslythought of equalising the tax through amethod which is inherent in the tax scheme.Nothing has been said to show that there isinequality much less 'hostile treatment'. Allthat is said is that the State must demonstrateequality. That is not the approach. At this ratenothing can ever be proved to be equal toanother.'
15. The attack on Entry 20C(a), here, is in the sphere of theory only. De facto discrimination is not established the tax burden is not so much as to annihilate the business of the petitioner and thus, the alleged discrimination cannot be termed as 'hostile'.
16. No further question arises for consideration.
17. Writ petition is accordingly dismissed. Rule discharged. No costs.
18. Petition dismissed.