D.K. Seth, J.
1. This appeal arises out of a judgment and order dated 25th February, 2003 passed in Writ Petition No. 4406(W) of 2002 dismissing the writ petition on the ground of absence of jurisdiction of the High Court in view of Section 14 of the West Bengal Taxation Tribunal Act, 1987 (1987 Act).
2. Mr. Hirak Mitter, learned Counsel for the appellant-writ petitioner, raised two questions. First, that the writ petition could not be dismissed as not maintainable in view of Section 14 of the 1987 Act barring jurisdiction of the High Court. The second is that having regard to the facts and circumstances of the case, the petitioners, though posted at Calcutta, are not persons employed in West Bengal and thus are not subject to the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979 (WB Act). He had raised several limbs of this point, namely, that the salary of the appellants-petitioners posted at Calcutta are being paid by their employer at Chhattisgarh as such they are carrying on profession in Chhattisgarh and not in West Bengal. Even though they may be absent from Chhattisgarh still they are deemed to be employed in Chhattisgarh in view of Section 3 Sub-section (5) of the Madhya Pradesh Vritti Kar Adhiniyam, 1995 (MP Act), applicable in Chhattisgarh.
3. These are disputed by the learned Counsel for the State of West Bengal,Mrs. Seba Roy, led by Mr. Bidyut Kiran Mukherjee, Senior Advocate, on theground that the appellants being posted at Calcutta, they are carrying onprofession within the State of West Bengal. As such they are subject to the WBAct. It is immaterial whether their salary is paid by their employer atChhattisgarh. The other point urged by Mr. Mukherjee is that Section 14 of the 1987 Act creating a bar of jurisdiction of the High Court renders the writ petition not maintainable. This point of maintainability in view of Section 14 of the1987 Act found favour with the learned Single Judge dismissing the writ petitionas not maintainable.
4. We may refer to the brief facts in order to appreciate the situation. The WB Act came into force in 1979. Whereas the MP Act was enacted in 1995. The profession tax was deducted by the respondent No. 5, Bhilai Steel Plant (BSP) a unit of Steel Authority of India (SAIL), employer of the appellants posted at Calcutta under the MP Act from 1996. Whereas on 5th December, 2001 the authorities under the WB Act issued notices of assessment/show-cause in respect of a period 1979-80 to 1998-99 as well as in respect of the period 1989-90 to 1999-2000. The employer of the appellants applied for refund of the tax collected by the authorities under the MP Act amounting to Rs. 1,55,4137- deducted by it from the salaries of the appellants for the period 1995-96 to 2000-2001. The authorities under the MP Act on 16th January, 2002 made it clear that the payment of professional tax and deduction thereof from the salaries of the appellants would be made at Bhilai under the MP Act. The appellants filed objection before the authorities under the WB Act on 7th March, 2002. In the meantime, the authorities under the MP Act issued certificate of deduction and deposit of professional tax at the office of the authorities under the MP Act for the period 1st April, 1996 till 31st March, 2001. Whereas on 13th March, 2002 the authorities under the WB Act directed the employer of the appellants to deduct professional tax from its employees posted in West Bengal from 1st April, 1979 and deposit the same with the authorities under the WB Act informing them that in default penal action would be taken against it. In this situation while running between the authorities under the MP Act and the WB Act, the appellants had moved the writ petition which having been dismissed as aforesaid the present appeal has been resorted to.
5. We would prefer to take the first point first. Section 14 of the 1987 Act creates a bar of jurisdiction of the High Court in relation to the matters covered under the said Act. The vires of similar such provision having been challenged in L. Chandra Kumar's case, the Apex Court had held that this taking away of jurisdiction would not preclude the High Court from exercising its jurisdiction conferred upon it under Articles 226 and 227 of the Constitution of India. This jurisdiction conferred by the Constitution cannot be taken away through legislation. But, however, it had made the decision of the Tribunal subject to Articles 226 and 227 by a Division Bench. But these jurisdictions can be availed of only after being routed through the Tribunal. True, jurisdiction of the High Court is barred by reason of Section 14 of the 1987 Act in respect of matters covered under the WB Act, a specified State Act within the meaning of Section 2(k) of the 1987 Act.
6. Section 14 of the 1987 Act excludes the jurisdiction of all Courts including the High Courts in respect of matters entertainable by the Tribunal. Exclusive jurisdiction has been conferred on the Tribunal to the exclusion of all other Courts except Supreme Court in relation to the adjudication or trial of disputes, complaints or offences with respect of levy, collection, assessment and enforcement of any tax under any specified State Act and any matter connected therewith or incidental thereto. The jurisdiction of the Tribunal is very wide in relation to the matters within its jurisdiction; but such jurisdiction is confined within the scope and ambit of the specified State Act defined in Section 2(k). The expression ''matters connected therewith or incidental thereto' is to be interpreted on the principles of ejusdem generis, namely, connected with or incidental to the matters, covered under the specified State Act. This connection or incidence cannot trench upon the domain of an Act other than the specified State Act. As soon the question of interpretation of the provisions of an Act outside the purview of the State Act becomes involved, the Tribunal created under the 1987 Act cannot assume jurisdiction in respect thereof. Even if we assume for argument's sake that it would be necessary to look into the MP Act for the purpose of ascertaining the impact of the WB Act, even then a decision by the Tribunal would not be binding on the authorities under the MP Act exposing the appellants to the mischief of double taxation by two different authorities. The dispute to the claim by two authorities created under two different Acts, one of which outside the specified State Act, cannot be resolved by the Tribunal established under the 1987 Act. A decision of the Tribunal in such matter would not bind the authorities under the MP Act. The decision of the Tribunal would not reach finality until the dispute is resolved. Therefore, Section 14 providing the exclusion clause would not confer jurisdiction on the Tribunal to adjudicate into matters involving conflicting claims made by any authority under any Act other than the specified State Acts. The Tribunal can enforce the liability under the WB Act, but it cannot prevent the authorities under the MP Act to impose liability on the appellants and resolve the conflict between the authorities under the two Acts.
7. In the present case, the tax is being deducted by the employer of the appellants under the MP Act applicable in the State of Chhattisgarh. The appellants claim that they are governed by the MP Act. In fact, the dispute is as to whether the MP Act will apply or the WB Act would apply. The question boils down to the consideration of comparative effectivity of the respective Act in respect of employees, i.e., the appellants, posted at Calcutta. Therefore, the determination of the question involved would necessitate consideration of both WB Act and MP Act. Whereas WB Act is confined within the matters related to the State Acts specified in the Schedule of the 1987 Act. The Schedule includes the WB Act, a State Act but it does not include the MP Act. Therefore, in our view, Section 14 of the 1987 Act would not be a bar in entertaining the writ petition, The jurisdiction of the Taxation Tribunal is confined within the State Acts mentioned in the Schedule and not beyond. In exercise of its jurisdiction, it cannot decide any matter falling under or relating to the MP Act. Therefore, the Taxation Tribunal could not assume jurisdiction with regard to the present question. Unless the jurisdiction of the Taxation Tribunal is attracted, the jurisdiction of the High Court cannot be ousted. Therefore, in our view, this High Court has jurisdiction to entertain writ petition in respect of matters outside the specified State Act, as defined in Section 2(k) of the 1987 Act, without being routed through the Tribunal.
8. Similarly, for the purpose of considering this question, it is necessary to consider the impact of the WB Act. Therefore, any provision prohibiting jurisdiction of the High Court by the MP Act would not be attracted to oust the jurisdiction of this High Court, if in course of determination the impact of the WB Act becomes relevant. In these circumstances, we answer the first question in favour of the appellants holding the writ petition maintainable.
9. We could have remanded the matter to the Court below for deciding the question afresh. But the matter being a pure question of law on admitted facts, we do not find it necessary to refer the matter back to the learned Single Judge for decision, particularly in view of the fact that both the learned Counsel had addressed this Court on merits in threadbare. Therefore, we propose to decide this question on merit,
10. Now we may take up the second point. Admittedly, the appellants are posted at Calcutta. The payment of their salary is made in Chhattisgarh, though it might be received by the appellants either at Chhattisgarh or at Calcutta. Admittedly, they are employed in BSP-SAIL operating at Chhattisgarh, having a liaison office at Calcutta and thereby operating in part in West Bengal.
11. On these facts the question is to be determined. In order to decide this question, we would need to refer to the different provisions of the WB Act and MP Act respectively. We, therefore, propose to quote the relevant provisions of the two Acts :
MP Act
WB Act
2(c).'Employee'means a person employed on salary or wage and includes --
2(b).'Employee' means a person employed on salary or wage, and includes--
(i) a Government Servantreceiving pay from the revenues of Central Government or any State Governmentor the Railway Fund;
(i) a Government Servantreceiving pay from the revenues of Central Government or any State Governmentor the Railway Fund;
(ii) a person in theservice of a body whether incorporated or not, which is owned or controlledby the Central Government or any State Government, where the body operates inany part of the State, even though its headquarters may be outside the State;
(ii) a person in theservice of a body, whether incorporated or not, which is owned or controlledby the Central Government or any State Government, whether the body operatesin any part of the State, even though its headquarters may be outside theState;
(iii) a person engagedin any employment of an employer not covered by items (i) and (ii) above;
(iii) a person engagedin any employment of an employer, not covered by items (i) and (ii) above;
2(d).'Employer' in relation to an employee earning any salary or wageson regular basis under him means the person or the officer who is responsiblefor disbursement of such salary or wages and includes the head of the officeor an establishment as well as manager or agent of the employer;
2(c).'Employer' in relation to an employee earning any salary or wageson regular basis under him, means the person or the officer who isresponsible for disbursement of such salary or wages, and includes the headof the office or an establishment as well as the manager or agent of theemployer;
2(f). 'Person'means any person who is engaged in any profession, trade, calling oremployment in the State of Madhya Pradesh and includes a Hindu undividedfamily, firm, company, corporation or other corporate body, any society, clubor association so engaged but does not include any person who earns wages oncasual basis.
2(f). 'Person'means any person who is engaged in any profession, trade, calling oremployment in the West Bengal, and includes a Hindu undivided family, firm,company, corporation or other corporatebody, any society, club or associationso engaged but does not include any person who earns wages on a casual basis.
Explanation.-- The expression'person' who earns wages on casual basis shall mean a person whoearns wages on being employed for a period not exceeding 180 days in a year.
Section 3. Levy andCollection of Tax. -- (1) Subject to the provisions of Article 276 of theConstitution of India, and this Act there shall be levied and collected taxon professions, trades, callings and employments.
Section 3. Levy andCharge of Tax. -- (1) Subject to the provisions of Article 276 of theConstitution of India, there shall be levied and collected a tax onprofessions, trades, callings and employment, in accordance with theprovisions of this Act
(2) Every person whocarries on a trade either himself or by an agent or representative or whofollows a profession or calling other than agriculture or who is inemployment either wholly or in part in Madhya Pradesh. and who falls underone or the other classes specified in column. (2)
(2) Every person engagedin any profession, trade, calling or employment and falling under one or theother of the classes mentioned in the second column of the Schedule shall beliable to pay to the State Government tax at the rate mentioned against the
of the Schedule shall,on the basis specified in the Schedule in respect thereto be liable to paytax at the rate mentioned against the class of such person in column (3) ofthe said Schedule:
class of such persons inthe third column of the said Schedule:
Provided that notwithstandinganything contained in the Schedule, where a person is covered by more thanone entry of the Schedule, tax under this Act shall be payable by such personat the highest rate of tax specified in respect of such entries.
Provided that entry (23)in the Schedule shall apply only to such classes of persons as may bespecified by the State Government by notification from time to time.
(3) *** **** ***
(4) *** **** ***
(5) Any person who is inemployment in Madhya Pradesh shall be deemed to be in employment even thoughhe may be absent therefrom on leave or otherwise.
Section 4, Employer'sliability to deduce and pay tax on behalf of employees. -- The tax payableunder this Act by any person earning a salary or wages shall be deductedmonthly in the prescribed manner by his employer from the salary or wagespayable to such person
Section 4. Employer'sliability to deduce and pay tax on behalf of employees. -- The tax payableunder this Act by any person earning a salary or wage shall be deducted byhis employer from the salary or wage payable to such person, before such
before such salary orwages is paid to him and such employer shall, irrespective of whether suchdeduction has been made or not, when the salary or wage is paid to suchperson, be liable to pay tax on behalf of all such persons:
salary or wage is paidto him, and such employer shall, irrespective of whether such deduction hasbeen made or not when the salary or wage is paid to such person, be liable topay tax on behalf of all such persons:
Provided that if theemployer is an officer of the Central Government or a State Government, suchemployer shall discharge the said liability in such manner, as may beprescribed.
Provided that if theemployer is an officer of Government, the State Government may, notwithstandinganything contained in this Act, prescribed by rules the manner in which theemployer shall discharge the said liability:
(2) When any personearning a salary or wages --
Provided further thatwhere any person earning a salary or wage --
(a) is also covered byone or more entries other than entry 1 of the Schedule and the rate of tax inany such other entry is more than the rate of tax under entry 1 of the saidSchedule.
(a) is also covered byone or more entries other than entry 1 in the Schedule and the rate of taxunder such entry or any of such entries is higher than that in entry 1, or
(b) is simultaneously inemployment of more than one employer;
(b)is simultaneouslyengaged in the employment of more than one employer;
and such personfurnishes to his employer a certificate in the prescribed form declaring thathe has been registered under sub-section (2) of section 8 and shall pay thetax himself, then the employer or employers of such person shall not deductthe tax from the salary or wages payable to such person and such employer oremployers, as the case may be, shall not be liable to pay tax on behalf ofsuch person.:
and such personfurnishes to his employer or employers a certificate in the prescribed formdeclaring inter alia, that heshall obtain a certificate of enrolment under subsection (2) of section 5 andpay the tax himself, then the employer or employers of such person shall notdeduct the tax from the salary or wage payable to such person and suchemployer or employers, as the case may be, shall not be liable to pay tax onbehalf of such person.
Provided that suchperson may opt to have the amount of tax deducted by the employer oremployers from his salary or wages and thereupon the amount so deducted shallstand adjusted towards the tax payable by such person for the year.
(VideRules 10and 13 and form 11B/11C and IV).
12. Having regard to the scheme of the two Acts as discussed above, it appears that both the Acts have defined 'employee', 'employer' and 'person' almost in identical manner. The 'levy and collection of tax' and the 'employer's liability to deduct and pay tax on behalf of employees' are almost in identical lines.
Under both the Acts, the liabilities fastened on the employee create a liability on the employer to deduct and pay the tax on behalf of the employees- Both under Section 2(c) of the MP Act and Section 2(b) of the WB Act, 'employee' means a person employed on salary or wages and includes (i) a Government servant receiving pay from the revenues of the Central Government or any State Government or the Railway Fund; (ii) a person in the service of a body incorporated or not, controlled by Central or State Government operating in any part of the State even though its headquarter may be outside the State. Thus, this definition does not restrict the employment of the employee only with the State Government concerned, namely, of Chhattisgarh under the MP Act and West Bengal under the WB Act. It includes a Government servant receiving pay from the revenues of any State Government or employed in a body incorporated or not controlled by Central or State Government operating in any part of the State even though the headquarter may be outside. The definition of 'employee' proceeds to define employee to mean a person employed. The 'person' is defined to mean under Section 2(f) (in both the Acts), any person engaged in any employment in the State of Madhya Pradesh (in the present context the State of Chhattisgarh wherever referred to) or West Bengal respectively. Thus, the primary consideration for fastening liability to pay profession tax is on a person engaged in any employment including Government servant in the State of Madhya Pradesh or in the State of West Bengal respectively, irrespective of the fact whether he is serving the Government of or a body corporate or not in either of these two States or of any other State. When the liability is primarily on the person employed/Government servant, it is the definition of 'employee' and 'person', which would be the deciding factor.
13. The levy and collection of tax under the MP Act is provided in Section 3 of the MP Act. Sub-section (2) fasten the liability on every person who is in employment either wholly or in part in Madhya Pradesh and falls under any one or the other classes specified in column-2 of the Schedule. Sub-section (5) of Section 3 clarifies the situation that the absence of the employee on leave or otherwise from Madhya Pradesh would not relieve the liability of the employee. Whereas Section 3 of the WB Act does not provide for any such provision. However, we are not concerned with this provision in relation to West Bengal since the employees are, in fact, employed in West Bengal and are not absent therefrom. The MP Act confines the liability on persons employed wholly or in part in Madhya Pradesh, even though he might be absent from Madhya Pradesh on account of leave or otherwise. Mr. Mitter had attempted to point out that this Sub-section (5) of Section 3 of the MP Act fastens the liability on the employees posted at Calcutta. Inasmuch as, though they are absent from Madhya Pradesh yet they shall be deemed to be in employment in Madhya Pradesh. But this proposition seems to be fallacious. The absence has been qualified as on account of leave. The expression 'or otherwise' used in Sub-section (5) of Section 3 has to be interpreted as ejusdem generis. This expression 'otherwise' would mean something analogous or ancillary to leave. This absence cannot connote absence on account of any reason other than leave or such reason analogous or ancillary to leave. It would not include a person posted outside the State on account of his transfer or on deputation. Posting of a person outside State otherwise than on account of leave or matters ancillary thereto would not be deemed to be an employment in Madhya Pradesh. Absence on account of transfer or deputation or posting outside State cannot be brought within the purview of Sub-section (5) of Section 3. On account of such posting outside State, the employee cannot be said to be in employment in Madhya Pradesh, even though the Head Office is within the State either wholly or in part.
14. The liability of the employer to deduct and pay tax under the MP Act on behalf of the employee would arise only when the person satisfies the test of the definition of 'employee' read with the definition of 'person' in Sections 2(c) and 2(f) of the MP Act and not otherwise. Unless the employee is employed wholly or part in Madhya Pradesh, he would not be liable to pay tax and the employer would not be liable to deduct and pay tax on behalf of the employee under the MP Act. On the other hand, on account of their posting at Calcutta, they are employed in West Bengal as defined in Sections 2(b) and 2(f) of the WB Act. Inasmuch as they are employees within the meaning of Section 2(b)(ii) of the WB Act being persons engaged in employment in West Bengal. Therefore, the provisions of the WB Act would be applicable in their case. By reason of Section 4, the employer Bhilai Steel Plant, a Unit of SAIL is liable to deduct and pay tax under the WB Act to the authorities entitled to receive tax under the WB Act.
15. The payment of salary by the employer in Chhattisgarh is not the determining factor; it is the place of employment, which is the determining factor. Similarly, the receipt of salary by the employee in Chhattisgarh would not be relevant when the employee is engaged in employment in the State of West Bengal. It is the engagement in employment in the particular State is the determining factor irrespective of the place where the salary is paid or received or the headquarter is situated.
16. In the present case, the employees of the appellant are employees within the meaning of Section 2(b)(ii) of the WB Act and Section 2(c)(ii) of the MP Act employed in the State of West Bengal where the employer is also operating within the meaning of the respective definition. As such the appellants would be liable to pay profession tax in West Bengal under the WB Act and their employer is liable to deduct and pay tax under the WB Act to the authorities under the WB Act.
17. In these circumstances, the authorities under the WB Act is entitled to levy or charge and collect tax under the WB Act from the appellants posted in West Bengal during the period of such employment in West Bengal. The State of Chhattisgarh shall transmit the said amount collected for such period on account of the appellants to the authorities under the WB Act. In case the amount deducted is in excess of the amount chargeable under the WB Act, in that event, the excess amount would be adjusted against the tax arrear or future payable by the appellants concerned. In case the amount deducted fall short of the amount payable under the WB Act, in that event, the same shall be dealt with in accordance with law. However, neither any penalty shall be imposed upon, nor penal action shall be taken against the appellants or their employer for any default or otherwise, nor any interest shall be charged on the arrears for any period prior to January, 2004. The amount deducted at the rate applicable under the MP Act in its entirety shall be deposited with or transmitted to the authorities under the WB Act within the month of January, 2004. The employer/respondent No. 5 shall deduct tax at the rate applicable in West Bengal and transmit the same to the State of West Bengal, for the month of December, 2003 onwards be deducted by the employer and be transmitted to or deposited with the authorities under the WB Act. The appellants/employees shall also be at liberty to opt for enrolment under Section 4 of the WB Act. However, we are not inclined to enter into the merits of the demand made by the authorities under the WB Act. The appellants shall be at liberty to dispute the demand on any ground available in law if they are so advised and in case it is so needed, it will be open to the appellants to get the dispute resolved through the machinery provided under the WB Act including WB Taxation Tribunal under the 1987 Act, as the case may be. All points on merit are kept open.
18. In the result, the appeal succeeds and is allowed as above. The judgment and order dated 25th February, 2003 passed in Writ Petition No. 4406 (W) of 2002 appealed against is hereby set aside. The writ petition, thus, succeeds to the extent indicated above and is disposed of in terms of the above order.
19. There will, however, be no order as to costs.
20. Urgent xerox certified copy, if applied for, be supplied to the parties within seven days from the date of application.
R.N. Sinha, J.
21. I agree.