# Appeal di8missed. 51•1• of Bombay THE PIONEER MOTORS (PRIVATE) LTD v. Raghubar Dayol ]. THE MUNICIPAL COUNCIL, NAGERCOIL

- **Citation:** [1961] 3 S.C.R. 609
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Case number:** Civil Appeals Nos. 499 to 502 of 1958
- **Bench:** J. L. Kapur, M. HrnAYATULLAH, J. C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/appeal-di8missed-51-1-of-bombay-the-pioneer-motors-private-ltd-v-raghubar-dayol-2055
- **Pages:** 10

## Headnote

Profession Tax-Provision for time before levy, if mandatoryReasonableness-Commissioner'> powers, if can carry out executive
powers of the Municipality-" Profession", definition of-Travancore District Municipalities Act, rn6 (Act XX ill of the Malayalam
year III6), ss. I6, 78, 9I.
The imposition of "profession tax" by the respondent
Municipal Council under the Travancore District Municipalities
Act (Act XXIII of the Malayalam year n16) was challenged on
the grounds, inter alia (1) that the requisite notification was not
published by the Municipal Council but by its commissioner,
(2) that the period of thirty days which was given for filing
objections to the imposition was insufficient in Jaw which required
a period of "not Jess than a month ", and (3) that this was a
mandatory provision under the proviso to s. 78 of the Act.
Held, tr.at under s. r6 the Commissioner being the executive
authority of the Municipal Council was authorised to give effect
to the resolutions of the Council and to perform all its executive
duties.
The words "not being less than one month" in the proviso
to s. 78 implied the necessity for one clear' month's notice excluding the first and last day of the month, but the use of the words
" reasonable period " before the word~ " not being less than one
mont.h " showed that the time given must be reasonable. In
view of the facts of the case the period allowed must be regarded
as reasonable and to have complied with the provision which is
directory in its later part.
Commissioner. of Income-tax v. Ekbal and Co. [1945] 13
I.T.R. 154 and Thompson v. Stimpson, [196o] 3 All E.R. 500,
distinguished.
·
Municipal Council, Cud<lapah v. The Madras and Soutlurn
Mahratta Railway Ltd. (1929) I.L.R. 52 Mad. 779, The Borough
Municipality of Amalner v. The Pratap Spinning, Weaving and
Manufacturing Co. Ltd., Amalner, I.L.R. [1952] Born. 918 and Kalu
Karim v. Municipality of Broull (1927) I.L.R. 51 Bom. 764,
referred to.
I96I
610
SUPREME COURT REPORTS
[1961]
I96I
The definition of "profession" as given in s. 81 includes
business.
J:Jioneer Motors
(Private) Ltd.
\",
CrvrL
APPELLATE
JuRI8DICTION:
Civil Appeals
Nos. 499 to 502 of 1958.
Munidpal c~uncil.
AppPals from the ju(lgment and decree dated July
.Vagmoil
13, 1956, of the forml'r Travancore-Cochin High Court
in A. S. Nos. 94, !l5, 96 and 156 of 1952.
G. S. Pathak and G. C. Mathur, for the appelhmts
(in C. A8. Nos. +!l!l to 501of58).
P. George and M. R. Krishna Pil/,ai, for the appellrtnts (in C. A.No. 502 of 58).
T. N. Subramania Iyer, R. Gaiwpathy Iyer and
G. Gopalakrishnan, for the respondent.
1961. .January 27. The Judgment of the Court was
_delivered by
Kapur J.
KAPUR, J.-These four appeals are brought against
the judgments and decrees of the erstwhile High Court
of Travancore-Cochin. The appellants were the plaintiffs in the respective suits out of which these appeals
have arisen and the respondent was the defendant in
all the suits. As rtll t.he suits involve a common question of law, it will be convenient to dispose of them by
one judgment.
The facts of the cases are these. On September 9,
1943, the N agercoil Municipal Council the respondent,
passed a resolution under A. 78 of the Travancore District Municipalities Act (Act XX III of the Malayalam
year 1116), hereinafter called the Act.
J3y this
resolution, it was resolved to levy a profession tax at
the rates specified in the schedule. ;This was notified
in the Government Gazette of September 26, 1943,
under the name of the Commissioner of the respondent
Council. In this notification, it was stated :-
" Any inhabitant of the local municipal town
objecting to the proposal may submit his objection
in writing to this office within 30 days of date of
publication of this notification in the Government
Gazette."
This notification was also published in a local newspaper called the Abhimani. It does not appear,
nor is there any assertion or allegation that any
3 S.C.R.
SUPREME COURT REPORTS
611
objection was raised to thi

## Text

3 S.C.R.
SUPREME COURT REPORTS
609
of the word "factory " and that the appellant has
'96'
been rightly convicted of the offence of working the
A~-;,.
factory without obtaining a licence. We therefore H. BA:w~n~:wol•
dismiss the appeal.
v.
Appeal di8missed.
51•1• of Bombay
THE PIONEER MOTORS (PRIVATE) LTD.
v.
Raghubar Dayol ].
THE MUNICIPAL COUNCIL, NAGERCOIL.
(and connected appeals)
(J. L. KAPUR, M. HrnAYATULLAH and J. C. SHAH, JJ.)
Profession Tax-Provision for time before levy, if mandatoryReasonableness-Commissioner'> powers, if can carry out executive
powers of the Municipality-" Profession", definition of-Travancore District Municipalities Act, rn6 (Act XX ill of the Malayalam
year III6), ss. I6, 78, 9I.
The imposition of "profession tax" by the respondent
Municipal Council under the Travancore District Municipalities
Act (Act XXIII of the Malayalam year n16) was challenged on
the grounds, inter alia (1) that the requisite notification was not
published by the Municipal Council but by its commissioner,
(2) that the period of thirty days which was given for filing
objections to the imposition was insufficient in Jaw which required
a period of "not Jess than a month ", and (3) that this was a
mandatory provision under the proviso to s. 78 of the Act.
Held, tr.at under s. r6 the Commissioner being the executive
authority of the Municipal Council was authorised to give effect
to the resolutions of the Council and to perform all its executive
duties.
The words "not being less than one month" in the proviso
to s. 78 implied the necessity for one clear' month's notice excluding the first and last day of the month, but the use of the words
" reasonable period " before the word~ " not being less than one
mont.h " showed that the time given must be reasonable. In
view of the facts of the case the period allowed must be regarded
as reasonable and to have complied with the provision which is
directory in its later part.
Commissioner. of Income-tax v. Ekbal and Co. [1945] 13
I.T.R. 154 and Thompson v. Stimpson, [196o] 3 All E.R. 500,
distinguished.
·
Municipal Council, Cud<lapah v. The Madras and Soutlurn
Mahratta Railway Ltd. (1929) I.L.R. 52 Mad. 779, The Borough
Municipality of Amalner v. The Pratap Spinning, Weaving and
Manufacturing Co. Ltd., Amalner, I.L.R. [1952] Born. 918 and Kalu
Karim v. Municipality of Broull (1927) I.L.R. 51 Bom. 764,
referred to.
I96I
610
SUPREME COURT REPORTS
[1961]
I96I
The definition of "profession" as given in s. 81 includes
business.
J:Jioneer Motors
(Private) Ltd.
\",
CrvrL
APPELLATE
JuRI8DICTION:
Civil Appeals
Nos. 499 to 502 of 1958.
Munidpal c~uncil.
AppPals from the ju(lgment and decree dated July
.Vagmoil
13, 1956, of the forml'r Travancore-Cochin High Court
in A. S. Nos. 94, !l5, 96 and 156 of 1952.
G. S. Pathak and G. C. Mathur, for the appelhmts
(in C. A8. Nos. +!l!l to 501of58).
P. George and M. R. Krishna Pil/,ai, for the appellrtnts (in C. A.No. 502 of 58).
T. N. Subramania Iyer, R. Gaiwpathy Iyer and
G. Gopalakrishnan, for the respondent.
1961. .January 27. The Judgment of the Court was
_delivered by
Kapur J.
KAPUR, J.-These four appeals are brought against
the judgments and decrees of the erstwhile High Court
of Travancore-Cochin. The appellants were the plaintiffs in the respective suits out of which these appeals
have arisen and the respondent was the defendant in
all the suits. As rtll t.he suits involve a common question of law, it will be convenient to dispose of them by
one judgment.
The facts of the cases are these. On September 9,
1943, the N agercoil Municipal Council the respondent,
passed a resolution under A. 78 of the Travancore District Municipalities Act (Act XX III of the Malayalam
year 1116), hereinafter called the Act.
J3y this
resolution, it was resolved to levy a profession tax at
the rates specified in the schedule. ;This was notified
in the Government Gazette of September 26, 1943,
under the name of the Commissioner of the respondent
Council. In this notification, it was stated :-
" Any inhabitant of the local municipal town
objecting to the proposal may submit his objection
in writing to this office within 30 days of date of
publication of this notification in the Government
Gazette."
This notification was also published in a local newspaper called the Abhimani. It does not appear,
nor is there any assertion or allegation that any
3 S.C.R.
SUPREME COURT REPORTS
611
objection was raised to this tax by th" appellants or
1961
any one else. On January 12, 1944, a reso::. tion under Pioneer M 010,s
s. 79 of the Act was passed, by which the profession
(Prioale) Ltd.
tax became payable from the beginning of the second
v.
half of the Malayalam year lll9. A trust, KottarMunieipal Cou•ci
Chetty Ninar Desikavinayaga Swamy filed a snit on
February 10, 1946, challenging the legality of this tax.
C.A. 502 of 1958 has arisen out of that suit. Amongst
other allegations, which are common to the other
suits, which will be mentioned presently, the trust
pleaded that it was not carrying on a profession
within the meaning of the word used in the Act and
that it was only a religious trust and had no profession. That suit was tried by the Munsif and was
decreed.
An appeal was taken against that decree to
the District Judge.
Three private limited companies carrying on business brqught three suits challenging the legality of
the imposition of the tax out of which the other three
appeals, i.e., Civil Appeals Nos. 499 to 501, have
arisen. In these suits, it was alleged that the publication of the resolution was not in accordance with the
provisions of s. 78 of the Act in so far as (1) it was not
published by the respondent Municipal Council, but by
the Commissioner; (2) the newspaper in which the
advertisement was published was not selected by the
Council ; (3) time given in the notification was fixed
not by the Conncil, but by the Commissioner; and (4)
the period prescribed in the notification, that is,
"within 30 days", was not fixed by the Council and
was not in accordance with the Act. The respondent
Municipal Council denied these allegations and several
issues were raised and the suits were decreed. The
appeal which had been taken in the suit by the Trust
was also decided in favour of that plaintiff. The result
was that all the suits and the appeal were decided
against the respondent Municipal Council. It took four
appeals to the High Court. The decrees were reversed
and the suits of the various plaintiffs were dismissed.
Against those judgments and decrees, these four
appe,alil have been brought by the plaintiffs, in the
various suits, who are now the appellants.
Nagercoil
Kapur].
612
SUPREME COURT REPORTS
[1961]
I96I
In Civil Appeals Nos. 499 to 501, Counsel for the
Pione"" Mot°"' appellants has raised two points (l) that the publica.-
(Peivate Lid.)
tion was not by the Council and (2) that the time given
v.
in the notification, i.e., "within 30 days " was not in
Municipal Council, accordance with the law and as these were conditions
Nagercoil
precedent to the legality of the resolution under s. 79
Kapur].
the resolution was ultra. vires and therefore the imposition of the tax was illegal. It is, therefore, necessary
to examine the various provisions of the Act upon
which the whole argument has proceeded.
Chapter VI of the Act deals with Taxation and
Finance. In s. 77 are enumerated the various taxes
which can be levied by Municipal Councils. Section 78
gives the procedure for the levying of the tax and
when quoted it is as follows:-
'.' S. 78. Resolution of Oouncil determining to levy tax
or tolla.-Auy resolution of a municipal council determining to levy a tax or toll shall specify the rate at
which any such tax or toll shall be levied and the
date from which it 13ha.ll be levied :
Provided that before passing a resolution imposing
a. tax or toll for the first time or increasing the rate
of an f;lXisting tax or toll, the council shall publish a.
notice in Our Government Gazette and at lea.st in
one Malaya.lam o~ Ta.mil newspaper having circulation in the municipality of itB intention, fix a.
reasonable period not being less than one month for
submission of objections, and consider the objections,
if any, received within the period specified."
(Italics a.re ours).
After the various steps given in s. 78 have been ta.ken,
a. Municipal Council has then to adopt the taxes
proposed by means of a resolution under s. 79, which
provides:-
" S. 79. Notifiwti<>n of new taxes 'And tolls.-When
a municipal council shall have"determined subject
to the provisions of Section 78 to levy any tax or
toll for the first time or at a new rate the executive
authority shall forthwith publish a notification in
Our Government Gazette . and by beat of drum
specifying the rate at which the date from which,
3 S.C.R.
SUPREME COURT REPORTS
613
and the period of levy, if any, for which such tax
or toll shall be levied."
The functions of the executive authoritv, that is, of Pioneer Mol<>I'•
the Commissioner of the Council are contained ins. 16
(Priva«J Ltd.
v.
of the Act, which is as follows :-
Municipal Coum:;1,
" S. 16. Functians of the Executive A uthority.-The
Nagereoil
executive authority of the municipal council shall-
(a) carry into effect the resolutions of the council;
(b) furnish to the council such periodical reports
regarding the progress made in carrying out the
resolutions of that body in the collection of taxes as
. the council may direct; and
(c) perform all the duties and exercise all the
powers specifically imposed or conferred on the
executive authority by this Act, and subject, whenever it is hereinafter expressly so provided, to the
sanction of the council, and subject to all other
restrictions, limitations and conditions hereinafter
imposed, exercise the executive power for the purpose of carrying out the provisions of this Act and
be directly responsible for the due fulfilment of the
purposes of this Act."
Section 16, which contains the power of the executive
authority, does not support the contention of the
appellants, because it provides that the executive
authority has to give effect to the resolutions of the
council and has to perform a.II duties specifically
imposed on the executive authority by the Act and
can also exercise executive power for the carrying out
of the provisions of the Act and can act without sanction, unless the Act otherwise requires. Therefore,
when the Commissioner of the respondent council got
published a. notification of the resolution under s. 78
of the Act to impose a tax, be was acting within his
powers and the fixing of the time in which objection
had to be ma.de was provided under the Act and was
not exercise of authority by the executive which it did
not possess.
The only serious question which a.rises for decision
is whether the period of" within thirty days " given
in the notification was compliance with the provisions
of the Act or not. Jf it was not then is the period of
Kapur J.
614
SUPRFME COURT REPORTS
[1961]
time mentioned a mandatory requirement, a breach of
which makes the tax illegal?
Pioneer Motors
(Privat•J Ltd.
Counsel for the appellants in the first three appeals
v.
argued, and that argument was adopted by counsel
'lfunicipal Council, for the appellant in the fourth appeal, that the words
Nagmoil
used in the first proviso to s. 78 required that a clear
Kapur].
period of one month had to be given for im·iting
objections and as " within thirty days" was nut a
clear period of one month, the provisions of the
section had not been complied with. In support of
his contention that the provision as to time was a
mandatory requirement, he particularly stressed three
words and phrases used in that proviso: (1) "before
passing a resolution"; (2) "shall publish"; and
(3) "fix a reasonable p~riod not being less than one
month for submission of objections." The argument
was that where these words are used, the effect was
that the requirements. were mandatory and not merely
directory. It was submitted that the words" before"
and "shall" provided that what was mentioned in
the proviso were conditions precedent for giving
power to the Municipal Council to pass a resolution
under s. 79 and when those two words were read along
with "not being less than one month", it was a clear
indication of the mandatory nature of the requirements of th!i section. Quite a number of cases were
relied upon by Counsel and besides this it was also
emphasised that sa. 78 and 79 concerned taxing
matters and as the liability of the tax-payers a.rises
after the tax is legally imposed, strict compliance
with the provisions was necessary. It is not necessary
to discuss all the cases on which reliance was placed.
The words "not being less than one month" do
imply that clear one month's notice was necessary to
be given, that is, both the first day and the la.st day
of the month had to be excluded. To put it in the
language used by Maxwell on Interpretation CJf
Statutes, 10th Edition, p. 351 :-
" ... when ...... 'not less than ' so many days a.re
to intervene, both the terminal days a.re excluded
from the computation,"
I
I

3 S.C.R.
SUPREME COURT.REPOR'fS
615
That does not seem to have been done in the present
1961
case. But in order to decide whether this portion of Pioneer Motors
the proviso is a mandatory provision, it is convenient
(PrivalC) Ltd.
to see the object for which it has been enacted. Under
v.
s. 78, the procedure is laid down for the levying of a Municipal Council,
new tax, which has to be done by a resolution. But
Nagercoil
in the proviso, it is stated that before such a resolution can be passed, a notice to that effect has to be
published in the official
gazette and also in one
Malayalam or Tamil newspaper having circulation
within the municipality. Then comes the period for
inviting objections. The object of notifying in the
Gazette and Local Newspaper is both to give notice to
the public and particulary to the persons who are likely
to be taxed and to invite their objections. For this
purpose, the proviso requires a reasonable. period of
not less .than one month to be given. The object of the
provision is to give reasonable time and opportunity
and it is given as a guidance that reasonable time
would be a month. The use of the words "reasonable period " before the words " not being less than
one month " is significant. If sufficient time has been
given for the invitation of the objections which only
just falls short of the pe~iod mentioned in the proviso,
then it would serve the object of the legislature. The
provision in regard to time in the context must be
hPld to be directory and not mandatory.
The cases under the Income-tax Act like the O<Ym-
. missioner of Income-tax v. Ekbol. and Oo. (')where the
notice under s. 22(2) of the Income-tax Act (which
requires the furnishing of a return within such period
not being less than thirty days) of 30 days only was
held to be bad, because it was not a notice of thirty
cle"'r days, were so decided because that notice is the
basis of the jurisdiction to tax and a. legal notice is an
obligation impo~ed in order to tax an individual and
it is a mandatory provision. Similarly, cases under
Bent Act will also not apply.
In Thompson v.
Stimpson (') the law required that not less than four
\I) [1945) I) l.T.R. 154.
70
(2) [1¢0) 3 All E.R. ~oo.
Kapur].
616
SUPREME COURT REPORTS
. [1961]
1961
weeks ' notice shall be given for vacation of premises
Pioneer Motors on a. weekly tenancy and only one week's time was
(Private) Ltd.
given. It was held there that it was a bad notice.
v.
It was further held that four weeks' notice wa.s a con.
Municipal C~uncil, dition precedent a.nd the words had been used which
Nagmo>I
ha.d been interpreted in the past· as providing for four
Kapur].
clear weeks a.nd also it wa.s construed a.s four clear
weeks, so that there might be certainty in the matter.
In other cases, that were relied upon a.nd which
related to taxing statutes, the Municipal Council,
Gudd,apah v. The Madraa and
Southern Mahratta
Railway Ltd.(•), The Borough Municipal,ity of Amalner
v. The Pratap Spinning, Weaving and Manufacturing
Go. Ltd., Amalner(•) a.nd Kalu Karim v. Municipality
of Broach (S) ; it wa.s held that taxing statutes have to
be strictly construed and requirements which are
precedent to the imposition of the tax have to be
complied with before ta.x can be legally imposed. In
every case the words ha. ve to be construed in the •
context taking into consideration the. language used
and the object to be achieved. As we have said a.hove,
the use of the words " not being less than one month "
implies the giving of a clear month excluding both the
first and the la.st day of the month. There is no dispute as to the meaning of that expression alone which
has been so construed and the observations of Lord
Parker in Thompsdn v. FJtimpsO'TI (') will apply. But
the question t\lat arises in the present case is : what
is the exact significance of these words when used in
the context of the other words used in the proviso.
The power of the municipality to levy the tax does
not depend upon a period prescribed for notice for
objections. The power to tax is derived from the
Statute ; the provisions relating to the length of notice
inviting objections and publication are merely procedural. The object of the notification is to inform
the future rate payers and to inviie objections .from
them. The proviso itself uses words " reasonable
time". Reading" reasonable time" and "not being
less than one month" together, it is clear that the
(I) (1929) I.L.R. 52 Mad. 779.
(2) I.L.R. [1952) Bom. 9I8,
(3) (I927) I.L.R. 5r Bom. 764.
(t) [196o] 3 All E.R, 500.
/
--"'-
3 S.C.R.
SUPREME COURT REPORTS
617
z96r
time given must be reasonable and the legislature has
only added a guide so that periods shorter than a
Pioneet M olo,s
month may not be fixed.
In the present case the
(Private) Ltd . •
whole ofthe period except one day has been fixed and
v. ·
in view of the other ;facts' .it must be regarded as Municipal Counoil,
reasonable and to have complied with the provision
Natmoil
which is directory in its later part.
Counsel for the appellants in C. A. 499/501/58
wanted to raise a further objection to the legality of
the tax levied and that ground was ~hat the. appellants were not carrying on a profession as they were
only engaged in motor business and trade. This
question was never raised at any previous stage and
was not ta.ken in the statement of the appellants' case.
Therefore, it cannot be allowed to be raised. Besides
it is without any substance in view of the definition
of profession as given in s .. 91 of the Act, which
includes business. In our opinion, the High Court
was right in so holding and the thre11 appeals Nos. 499
to 501 of 1958 are dismissed with costs, one hearing fee.
·
.
.
.
. Coming now to Civil AppeaLNo; 502 ofl958, in the
plaint it was alleged that the. trμst 'Vt>&.. iJo. religious
trust and was follo'Ving no profession and therefore
it did not fall within the definHion of the 'iyol:d ".pro,
fession" as used in,s. 91 oft.he· Act.· The defendant
joined issue and the matter was put in issue in the
following form :
·
'
"Is the taxation by defendant of plaintiff illegal
and in contravention of the provisions of the
District Municipalities Act?"
Although no specific finding was given as regards the
operation of s. 91, the suit was decreed and the
question whether the trust followed a profession or
not seems to have got lost at the subsequent stages of
the proceedings, that is, in appeal in the court of the
District Judge and in the High Court. It is this point
which was urged by counsel for the trust ; his plea
was that his case was not covered by s. 91, as being a
religious trust it had no profession and was carrying
on none. That is a matter which, in our opinion,
should have been decided, and as neither the Dist.riot
Kapur].
618
SUPREME COURT REPORTS
[1961]
'96'
Judge nor the High Court has given a finding on that
Pioneer Motors point, it is necessary to remit the case to the High
(PYivate) Ltd.
Oourt with the direction that the appeal be reheard
v.
and that particular question be decided on the
. · Municipal Council, materials on the record. Nothing that has been said
Nagerco•l
in this judgment must be taken to be an expression of
Kapur J.
opinion on the merits of this plea taken by the appellant Trust.
January 27.
Appeal No. 502 of 1958, is therefore, allowed and
the case remitted to the High Court for decision. The
costs in this Court and in the High Court will abide
the decision of the appeal in the High Court.
Appeals nos. 499 to 501 dismissed.
Appeal no. 502 allowed. Case remitted.
V ALLABHDAS AND OTHE.RS
v.
MUNICIPAL COMMITTEE, AKO LA.
(J. L. KAPUR, M. HIDAYATULLAH and J. c. SHAH, JJ.)
Octroi Tax-Legality of imposition-:" System of Assessment",
meaning of-C. P. & Berar Municipal Act, r922 (C. P. & Berar II
of I922), S. 67(2).
The Municipal Committee, Akola_, passed a resolution to
impose an octroi ta:: and forwarded it along with the draft rules
of-assessment and collection to the State Government. The State
Government published a notification in the Gazette which contained the articles to be taxed, the rate or rates at whicq they
were to be taxed and a brief statement of objects and reasons for
the imposition of the tax. This was followed by draft rules as to
how taxation was to be done. Thereafter the Municipal Committee affixed on its notice board and also published in the local
newspapers the said proposed _rules but the draft rules in regard
to the "system of assessment" were not published along with
other particulars. It was alleged by the appellants that the
Municipality by not publishing the draft rules of tile "system of
assessment", failed to comply in full with the mandatory requirements of s. 67(2) of the Act rendering the imposition of tax
illegal.
Held, that the words" system of assessment" did not necessarily mean the whole procedure of taxation, i.e. imposition,
collection and procedure in regard to collection and refund. The
notice and not the draft rules relating to assessment and collection were required under the Rules to be affixed on the notice