Case Note & Summary
The petitioners, civilian employees working in the Defence Department of the Union of India, filed writ petitions challenging the action of the State of Maharashtra and the Profession Tax Officer in denying them exemption from payment of profession tax under the Maharashtra State Tax on Professions, Traders, Callings and Employment Act, 1975 (Profession Tax Act). They relied on Section 27A(a) of the Act and a previous Division Bench judgment of the Bombay High Court in B.S. Raut and others vs. State of Maharashtra (1992 Mh.L.J. 360), which had held that the State Government could not levy profession tax on them. However, the State Government subsequently amended Section 27A(a), excluding the petitioners from the exempted class. The petitioners contended that this amendment was unconstitutional as it violated Article 14 of the Constitution, arguing that there was no rationale for classifying Armed Forces into two categories (military personnel and civilian employees) and that the classification lacked intelligible differentia and nexus with the object of the Act. The respondents relied on later Division Bench judgments in Pratiraksha Mazdoor Sangha, Jalgaon vs. State of Maharashtra (2001 (1) Mh.L.J. 407) and Indian Air Force Employees Union vs. State of Maharashtra (2003 (4) Mh.L.J. 609), which held that employees of similar establishments were not exempted after the amendment. The court, after considering the submissions, found that the classification between Armed Forces personnel and civilian employees was based on an intelligible differentia, as the nature of their employment and duties are distinct. The differentia had a rational nexus with the object of the Act, which is to levy profession tax on persons engaged in professions, trades, callings, or employments. Consequently, the court dismissed the petitions, upholding the constitutional validity of the amendment.
Headnote
A) Constitutional Law - Article 14 - Classification - Intelligible Differentia - The amendment to Section 27A(a) of the Maharashtra State Tax on Professions, Traders, Callings and Employment Act, 1975, which excluded civilian employees of the Defence Department from the exemption granted to members of the Armed Forces, was challenged as violative of Article 14. The court held that the classification between Armed Forces personnel and civilian employees is based on an intelligible differentia, as the nature of their employment and duties are distinct, and the differentia has a rational nexus with the object of the Act, which is to levy profession tax on persons engaged in professions, trades, callings, or employments. (Paras 1-5)
Issue of Consideration
Whether the amendment to Section 27A(a) of the Profession Tax Act, which excludes civilian employees of the Defence Department from exemption from profession tax, is constitutional and valid under Article 14 of the Constitution of India.
Final Decision
The court dismissed both writ petitions, upholding the constitutional validity of the amendment to Section 27A(a) of the Profession Tax Act and the denial of exemption to the petitioners.
Law Points
- Interpretation of Section 27A(a) of Maharashtra State Tax on Professions
- Traders
- Callings and Employment Act
- 1975
- Constitutional validity of amendment excluding certain defence employees from profession tax exemption
- Article 14 of Constitution of India
Case Details
2006 LawText (BOM) (07) 111
Writ Petition Nos. 1449 & 1950 of 1991
P.V. Kakade, B.P. Dharmadhikari
R.K. Deshpande, Suddhir Malode (for Petitioners); Mrs. S.S. Wandile, A.G.P. (for Respondent No. 1); R.S. Sundram (for Union of India & Employer Units/Organisations)
C.A.D. Civilian Workers' Union, Pulgaon and 5 others; All India Air Force Civilians Association, Nagpur and 2 others
The State of Maharashtra and 4 others
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petitions challenging denial of exemption from profession tax and constitutional validity of amendment to Section 27A(a) of the Profession Tax Act.
Remedy Sought
Petitioners sought declaration that they are exempt from profession tax under Section 27A(a) and that the amendment excluding them is unconstitutional.
Filing Reason
The State of Maharashtra denied exemption from profession tax to civilian employees of the Defence Department after an amendment to Section 27A(a) of the Profession Tax Act.
Previous Decisions
Earlier Division Bench judgment in B.S. Raut and others vs. State of Maharashtra (1992 Mh.L.J. 360) held that the State could not levy profession tax on the petitioners. Later judgments in Pratiraksha Mazdoor Sangha (2001) and Indian Air Force Employees Union (2003) held that after amendment, such employees were not exempt.
Issues
Whether the amendment to Section 27A(a) of the Profession Tax Act, excluding civilian employees of the Defence Department from exemption, is violative of Article 14 of the Constitution.
Whether the classification between Armed Forces personnel and civilian employees is based on an intelligible differentia and has a rational nexus with the object of the Act.
Submissions/Arguments
Petitioners argued that there is no rationale for classifying Armed Forces into two categories (military and civilian) and the classification lacks intelligible differentia and nexus with the object of the Act, thus violating Article 14.
Respondents argued that the amendment validly excludes civilian employees, relying on later Division Bench judgments that upheld the amendment.
Ratio Decidendi
The classification between Armed Forces personnel and civilian employees under Section 27A(a) of the Profession Tax Act is based on an intelligible differentia, as the nature of their employment and duties are distinct, and the differentia has a rational nexus with the object of the Act, which is to levy profession tax on persons engaged in professions, trades, callings, or employments. Therefore, the amendment does not violate Article 14 of the Constitution.
Judgment Excerpts
By both these Petitions, employees working in the Defence Department of Union of India have challenged action of respondent no. 1 State of Maharashtra and respondent No 2 Profession Tax Officer in denying them exemption from payment of profession tax...
Additional challenge raised by Petitioners in present Petitions is that if the amendment is held to exclude Petitioners from class entitled to exemption, the amendment deserves to be declared unconstitutional as it violates Article 14 of Constitution of India...
Procedural History
The petitioners initially filed earlier writ petitions which were decided in their favour by a Division Bench on 4/12/1990 (B.S. Raut case). Subsequently, the State amended Section 27A(a) of the Profession Tax Act. The petitioners then filed the present writ petitions in 1991 challenging the denial of exemption and the constitutional validity of the amendment. The petitions were heard and reserved on 28th June 2006, and judgment was pronounced on 7th July 2006.
Acts & Sections
- Maharashtra State Tax on Professions, Traders, Callings and Employment Act, 1975: Section 27A(a)
- Constitution of India: Article 14
