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Issues:
1. Assessment of profession tax under the Punjab Professions, Trades, Callings and Employments Taxation Act, 1956. 2. Interpretation of the term "trade" within the State of Punjab. 3. Determination of activities constituting "carrying on trade" within a specific jurisdiction. Analysis: The Supreme Court judgment pertained to the assessment of profession tax under the Punjab Professions, Trades, Callings and Employments Taxation Act, 1956. The respondent, a joint stock company with its principal place of business in Bombay and a branch office in New Delhi, was assessed by the assessing authority in Karnal for the years 1960-61 and 1961-62. The High Court of Punjab had quashed the assessment orders and notices of demand, ruling that the respondent did not conduct trade within the State of Punjab and thus was not liable for taxation under the Act. The State of Punjab appealed this decision to the Supreme Court. The key issue revolved around the interpretation of the term "trade" within the State of Punjab as per Section 3 of Act 7 of 1956. The Act stipulates that every person engaged in trade, profession, calling, or employment within Punjab is liable to pay tax. The respondent, without a branch office in Punjab or appointed agents, supplied goods to the Government of Punjab and "semi-government bodies" in the state through its Delhi branch. The goods were dispatched from Delhi, and the price was collected within Punjab. The assessing authority contended that the respondent could be considered as selling goods within Punjab due to the delivery terms. However, the High Court disagreed, emphasizing that the mere presentation of receipts in the respondent's name did not establish trade activity within Punjab. The Supreme Court delved into the concept of "trade," noting its primary and secondary meanings involving the exchange of goods for profit-driven activities. It highlighted that the determination of whether trade is conducted at a specific place requires a comprehensive analysis of all relevant circumstances, without a definitive test. In this case, the Court found that the respondent's activities in Punjab, including supplying goods and receiving payments, were ancillary and did not amount to carrying on trade within the state. Reference was made to various cases interpreting similar trade-related terms under different statutes. Ultimately, the Supreme Court dismissed the appeal, upholding the High Court's decision. The respondent did not participate in the hearing, leading to no order on costs. The judgment clarified the nuanced understanding of "carrying on trade" within a specific jurisdiction, emphasizing the need for a holistic assessment of trade activities to determine tax liability under the relevant statute.
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