Law:

Section:

Entry 20 [as it stood before 1-4-1989], read with entry 2 and Explanation I of the Schedule to the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976- Double taxation - Whether a partner carrying on profession through partnership firm was liable to tax in addition to tax on firm - Held, no FACTS The appellant was a partner of a firm which carried on the business of tax consultancy. The firm was enrolled as assessee under the Karnataka Tax on Professions, Trades, Callings and Employments Act. The respondent served him with a notice proposing penalty for his non-registration under the Act. The appellant's contentions that he was not liable for such registration in his personal capacity and that a separate demand on an individual partner would result in double taxation, which was not contemplated under the Act, were negatived. He was held liable in two capacities, one as an individual under entry 2(c) and the other as a firm under entry 20 of the Schedule to the Act and was directed to get himself registered within a specified time. On writ, the single Judge took the view that the appellant could be subjected to tax in both capacities. On appeal: HELD The scheme of the Act is that when a profession is carried on by an individual person in his individual capacity, entry 2 is attracted and when he carries on a profession through a firm entry 20 is attracted. But for any reason if a person is held to be carrying on a profession falling under more than one entry he cannot be taxed under both entries but only under one entry which entails the highest rate of tax as provided in the Explanation, while entry 21 covers residuary class of persons. It was not the case of the revenue that the appellant was carrying on his profession apart from the profession in the firm. Therefore, he could be taxed either under entry 2 or under entry 20 of the Schedule. But when he was not carrying on his profession as an individual but only as a member of the firm then entry 20 was attracted. If he was carrying on his profession as a partner of a firm and that was to be taxed, there was no separate provision attracting tax under the Act, as it stood then. Whatever may…

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