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TMI Blog1989 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners are : that, reading the entry under the Constitution at entry 60 of List II of the Seventh Schedule to the Constitution and the charging section as well as entry 19, the incidence of tax is upon profession, trade or calling ; that when the tax base is profession, trade or calling, classification made by singling out a company without reference to the profession, trade or calling carried on by it is per se bad and has totally no relevance to the purposes and objects of the Act; that, even amongst companies, there is no classification based upon the standing, the number of employees engaged and capital investment made and the like as has been done in the cases of certain other categories of assessees falling under the Act, such as, la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of the State. Sub-section (2) provides for levy of tax on every person who exercises any profession, calling or trade specified in the second column of the Schedule at the rate mentioned in the corresponding entry thereof. In State of Tamil Nadu v. M. K. Kandaswami [1975] 36 STC 191, the Supreme Court has stated that the scheme of a taxing statute involves three inter-related but distinct concepts which may be described as "taxable person", "taxable event" or "subject of taxation" and a charging provision, in order to be effective, must contain these ingredients. No tax is complete nor can a charge arise under a fiscal statute unless the subject, the object and the quantum of tax are prescribed or indicated in the provision. In doi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lature, I do not think it can be faulted at all. But what is attacked is this : although the classification of company as such may be good when it carries on a profession, there cannot be any difference between any individual or a natural person or a legal person like a company because the basis of tax is only the profession. A careful reading of the charging section would reveal that tax is levied on profession, trade or calling undoubtedly but it also takes into consideration the person who carries on the profession. Indeed, the scheme of the Act itself will indicate such classification, having been maintained in respect of individuals and it takes note of the standing of the person concerned in the profession, the number of persons emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is room for further classification. Refusal to classify is one thing and it bears on constitutionality ; but as to whether there is a need to make further classification to work out perfect justice is left to the State. It is too well-established that, in the 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 a wide latitude to the Legislature in the matter of levy of taxes and the classification therefor. What is attacked here is the flat rate of tax levied on companies at Rs. 2,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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