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TMI Blog1951 (10) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... te of this Honourable Court. 4. Under Section 8 of the Act 1 will not be deemed to be entitled to practice the profession of law before the High Court unless I have been enrolled as an advocate thereof. The Madras Stamp Amendment Act of 1922, by Article 25 of Schedule I-A prescribes a fee of ₹ 625 for enrolment as an Advocate 5. I desire to bring to the consideration of this Honourable Court the question whether the right to practise any profession secured to me under Article 19(1)(g) of the Constitution, can be subjected to restrictions other than those prescribed in clause 6 of the same article, and whether that provision of the Madras Stamp Amendment Act of 1922, prescribing a fee of ₹ 625 could be sustained at all in view of the provisions of the Constitution of India, particularly Article 19(1)(g) read with Article 13(1). I submit, however, that whatever might have been the legality or propriety of the impugned provisions prior to the coming into, force of the Constitution, the same could not be maintained inasmuch as they seek to regulate enrolment not only by professional qualification or merit but also by consideration as to payment of fees. * * * * 7. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of this application. It runs thus: "Provided that such persons shall have paid in respect of enrolment the stamp duty, if any under the Indian, Stamp Act 1899, and a fee, ayable to the Bar Council, which shall be ten rupees in the case of the persons referred to in Clause (a) and in other cases such amount as may be prescribed." 4. Section 3 of the Indian Stamp Act II of 1899, enacts that the instruments mentioned in Schedule I shall be chargeable with duty of the amount indicated in that schedule as the proper duty therefor subject to exceptions with which we are not concerned. Item 30 of Schedule I is as follows: "Entry as an advocate, vakeel or attorney on the roll of any High Court (under the Indian Bar Councils Act, 1926) or in exercise of the powers conferred on such Court by Letters Patent or by the Legal Practitioners Act 1884 (a) in the case of an advocate or vakil--five hundred rupees (b) in the case of an attorney--two hundred and fifty rupees. Exemption: Entry of an Advocate, Vakeel or Attorney on the roll of any High Court when he has previously been enrolled in a High Court." By the Madras Stamp (Amendment) Act VI (6) of 1922, the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a which ran as follows: "That every person, firm, association or corporation, domestic or foreign, engaged in the business of selling, or malting any charge for advertising or for advertisements, whether printed or published, or to be printed or published, in any newspaper, magazine, periodical or publication whatever having a circulation of more than 20,000 copies per week, or displayed and exhibited, or to be displayed and exhibited by means of moving pictures, in the State of Louisiana, shall, in addition to all other taxes and licences levied and assessed in this State, pay a licence tax for the privilege of engaging in such business in this State of two per cent (2 per cent) of the gross receipts of such business," The Act required everyone subject to the tax to file a sworn report every three months showing the amount and the gross receipts from the business and the resulting tax must be paid when the report was filed. Failure to file the report or pay the tax constituted a misdemeanour punishable with fine or imprisonment or both. The validity of the Act was assailed as violating the Constitution in that it abridged the freedom of the Press in contravention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and curtailing the circulation of a selected group of newspapers." 8. I do not understand this case as an authority for the proposition advanced by learned counsel for the petitioner. It will be noticed that the tax was not imposed in advance. The payment of the tax was not a condition precedent to the publication of the Journal. Periodical reports had to be filed and along with them the tax was payable according to the receipts. As I understand it, the decision in that case really rested on the circumstance that there was an ulterior bad motive behind the enactment. It was a deliberate and calculated device to penalise a certain group of newspapers. As pointed out in 'Courtney M. Mabee v. White Plains Publishing Co', 327 U. S. 178: 90 Law Ed 607 in the 'Grosjean Case', (1936) 297 U. S. 233; 80 Law Ed 660. "The payment was singled out for special taxation and the tax was graduated in accordance with volume of circulation." In my opinion the 'Grosjean Case', (1936 297 U S 233: 80 Law Ed 660) is not in point here. I doubt if the Court which decided 'GHOSJEAN'S Case', would have held a non-discriminatory tax on advertisements as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a prior restraint on publication the flat licence tax falls short only of outright censorship or suppression." Mr. Justice Murphy in his dissenting opinion observed: "But whatever the amount, the taxes are in reality taxes upon the dissemination of religious ideas, a dissemination carried on by the distribution of religious literature for religious reasons alone and not for personal profit. As such they place a burden on freedom of speech, freedom of the press and the exercise of religion even if the question of amount is laid aside............The exercise without commercial motives, of freedom of speech, freedom of the Press, or freedom of worship are not proper sources of taxation for general revenue purposes." Mr. Justice Black who also dissented tersely put his point of view thus: "The opinion of the Court sanctions- a device which in our opinion suppresses or tends to suppress the free exercise of a religion practised by a minority group.........Certainly our democratic form of Government functioning under the historic Bill of Rights has a high responsibility to accommodate itself to the religious views of minorities however unpopular and unorthodox tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have here something quite different, for example, from a tax on the income of one who engages in religious activities or a tax on property used or employed in connection with those activities. It is one thing to impose a tax on the income or property of a preacher. It is quite another thing to exact a tax from him for the privilege of delivering a sermon. The tax imposed by the City of Jeanette is a fiat licence tax, the payment of which is a condition of the exercise of these constitutional privileges. The power to tax the exercise of a privilege is the power to control or suppress its enjoyment .........In all of these cases the issuance of the permit or licence is dependent on the payment of a licence tax. And the licence tax is fixed in amount and unrelated to the scope of the activities of petitioners or to . their realised revenues. It is not a nominal fee imposed as a regulatory measure to defray the expenses of policing the activities in question. It is in no way apportioned. It is a flat licence tax levied and collected as a condition to the pursuit of activities whose enjoyment is guaranteed by the first amendment." 11. Reed and Frankfurter JJ. delivered dissenting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h person's activities were confined to his residential town and he depended for his livelihood on contributions expected in return for the literature distributed. Mr. Justice Douglas who delivered the leading judgment observed 'inter alia' after referring to 'Jones v. Opelika'. (1942) 316 U S 584: 86 Law Ed. 1691 and 'Murdock v. Pennsylvania', (1943) 319 U S 105 ; 87 Law Ed. 1292, thus: "In those cases membars of Jehovah's witnesses had also been found guilty of 'peddling' or 'selling' literature within the meaning of the local ordinances. But since they were engaged in a 'religious' rather than a 'commercial' venture, we held that the constitutionality of the ordinances might not be measured by the standards governing the sales of wares and merchandise by hucksters and other merchants. "Freedom of press, freedom of speech, freedom of religion are in a preferred position." (Murdock v. Pennsylvania'). V7e emphasised that the 'inherent vice and evil' of the flat licence tax is that 'it restrains in advance those constitutional liberties' and 'invevitably tends to suppress their ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the practice of distributing pamphlets of a religious nature. Chief Justice Hughes who delivered the opinion of the Court said: "We think that the ordinance is invalid on its face. Whatever the motive induced its adoption, its character is such that it strikes at the very foundation of the freedom of the press by subjecting it to licence and censorship." In 'Valentine v. Chrestensen', (1942)' 316 U S 52: 86 Law Ed. 1262, the Supreme Court upheld the constitutionalists of a Municipal regulation prohibiting the distribution in city streets of handbills bearing on one side a protest against action taken by public officials and on the other advertising matter, where the affixing of the protest to the advertising circular was with the intent and for the purpose of evading the prohibition of a city ordinance forbidding distribution in the City's streets of commercial and business advertising matter. The learned Judges were clear that the Constitution imposes no restraint on Government as respects purely commercial advertising. 14. Mr. Venkatasumbramania Ayyar agrued with considerable force that the exercise of a fundamental right guaranteed by the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h under the Constitution was exclusively a matter for the State Legislature. As Chief Justice Taft remarked the tax in question was "a penalty to coerce people of a State to act as Congress wishes them to act in respect of a matter completely the business of the State Government under the Federal Constitution." In 'Panhandle Oil Co. v. State Of Mississippi On Relation of R.H. Knox', (1928) 277 U S 218: 72 Law Ed. 857, the State of Mississippi imposed a tax on a gasoline sold to the Federal Government for the use of its Coast Guard Fleet and its Veteran's hospital. The tax was held to be unconstitutional because it interfered with the rights of United States which had been empowered to operate the fleet and the hospital. "The States may not burden or interfere with the exertion of national power or make it a source of revenue or take the funds raised or tax the means used for the performance of Federal functions." (Per Butler J.) In 'Ingels v. Morf', (1937) 300 U S 290: 81 Law Ed. 653. a State exaction which burdened and interfered with interstate commerce was declared to be unconstitutional. The state of California passed a statute imposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the right to control and regulate the granting of licenses to practise law in the Courts of a State was one of the powers which are not transferred for its protection to the Federal Government. But we are not really concerned with this aspect of the case. Mr. Venkatasubramania Aiyar contended that this decision should no longer be deemed to be good law having regard to the change in the attitude of the Supreme Court in construing the fourteenth amendment. There is great force in the contention, because there can be no doubt that it was the construction put forward in Mr. Justice Field's dissenting opinion that subsequently prevailed, Mr. Justice Sutherland speaking for the Court in a later case, 'James C. Colgate v. Erwin M. Harvey (1935) 296 U S 404:80 Law Ed 299 said that the right of a citizen of the United States to engage in business or to transact any lawful business is a privilege attributable to his national citizenship. But so far as I have been able to see there has been no disapproval of this decision either in subsequent decisions of the Supreme Court or even in recognised text books on American Constitutional law. How the principle underlying this decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the position that here wag a tax which the State was empowered to levy and once it is found that the State was competent and within its powers in imposing the tax, there could be no question of any infringement of fundamental rights, though incidentally the enjoyment of such fundamental rights may be more or less affected. He refused to accept the distinction drawn by petitioner's counsel between taxation prior to and as condition of the exercise of the right and subsequent taxation on the exercise of the right. He analysed the cases relied on by the petitioner's learned counsel to show that this distinction was not considered material in any of the decisions relied on. 'Grosjean Case', (1936) 297 U S 233:80 Law Ed 660 really dealt with a tax on advertisements and would not have been held to have been invalid as such but for the fact that the Court knew that the dominant purpose of the ordinance was not the realisation of revenue but the suppression of certain newspapers. The Court found in that case that it was not an ordinary ease of tax but had a long history of hostile misuse of state power behind it. The cases dealing with Jehovah's witnesses which rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular trade and under what conditions. Even under our constitution, the State can impose conditions and prescribe professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, (see Article 19(6)). 22. It was therefore contended by the learned Advocate General that the State could make a law making it incumbent on a person who desired to practise in particular Courts of the land to be enrolled as advocates of that Court. If so much is conceded, then the next step is to recognise that it is the entry of enrolment that is the subject of the stamp levy. 23-24. Much was not said at the Bar as to what exactly is comprised in the right to practise a profession guaranteed under Article 19(1)(g). Taking the profession of law, what does this right, consist in? Is the effect of Article 19(1) to confer on every person who may be otherwise qualified the right to practise in any Court in the land? I see nothing in Article 19(1)(g) to justify the conclusion that this Court or any other High Court or Supreme Court cannot lay down rules for the admission of advocates who alone will be permitted to represent the suitors before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estroy the practice of the profession of law and that it was prompted by improper motives. 26. I do not think it necessary in this case to answer the very large and important question as to how far there could be taxation which would virtually destroy any of the fundamental rights. Is the power of taxation subject to the exercise of fundamental rights or is the exercise of fundamental rights subject to the power of taxation? The petitioner's learned counsel said that they were mutually restrictive of each other. I think it is sufficient for the purpose of this case to say that even assuming a tax otherwise lawfully levied can be held to be an unreasonable restriction on the exercise of any of the freedoms guaranteed by Article 19, it cannot be said in this case that the imposition of the stamp duty is not a reasonable restriction and not in the interests of the general public. 27. It must be admitted that the State has got power to augment its revenues by the imposition of taxes. Taxes must in great or less degree affect the full enjoyment of rights like the right of property. Let me give an instance. Article 19(1)(f) confers on a citizen a right inter alia to dispose of prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44: 21 Law Ed 442 is to this extent not bad law even to this day. It is not only a citizen who is entitled to be enrolled as an advocate of this Court. Even a foreigner, if he fulfils the prescribed qualifications and requirements, can be enrolled as such. The exclusive right to represent suitors in Court which an advocate possesses is really in the nature of a privilege, though the fact that it is a privilege does not imply that on the conferment of the privilege, there can be discrimination. Article 14 is a sufficient safeguard against any unequal treatment. The charge of a fee by way of levy of stamp duty for such privilege cannot be invalid as unconstitutional. 31. Even if the right to act and plead is deemed to be a right comprised in the right to practise the profession guaranteed under Article 19(1)(g), there is nothing in the Constitution to exempt such right wholly from the taxing power of the State, (I use the word "State" in its larger definition under Article 12. Article 265 which says "no tax shall be levied or collected except by authority of Jaw" does not provide for any exemptions. Arts. 268, 269 and 276 and a number of entries in the three list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rolls of advocates of this Court. The Indian Stamp Act (II of 1899) Article 30 of Schedule I prescribes a stamp duty of ₹ 500 for enrolment and under the Madras Act III (3) of 1922, Article 25(a), it has been fixed at ₹ 625. 36. The petitioner contends that as a citizen he has a fundamental right to carry on business as an advocate, that the stamp duty imposed a condition on the exercise of that right and that it is, therefore, illegal. He accordingly prays that the provision in the Stamp Act be declared void and that he be enrolled as an advocate without reference thereto. 36a. The contentions of Mr. K.V. Venkatasubramania Iyer, the learned advocate, who argued in support of the petition may be summed up thus: (37) Under the Constitution the fundamental rights conferred by Part III, are supreme, that neither Parliament nor the legislatures of the States have the power to enact any law taking away or abridging those rights; that the Stamp Act is a measure of taxation; that the power to tax being the power to destroy, it cannot be exercised over fundamental rights and that the levy of stamp duty is, therefore, illegal. It was also further urged that any previous res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State has a right to control trade in the interests of the public and for that purpose impose suitable restrictions on the conduct of the business. The licence is a symbol of State regulation and the licence fee is intended to cover expenses which the State has to incur in maintaining an establishment for the purpose of regulating the trade. It is conceded by the learned advocate for the petitioner that licensing of trades including the profession of law is valid and a reasonable fee can be charged for the issue of a licence. But as no contention has been urged that the stamp duty in question is in the nature of licence fee his aspect of the matter requires no further consideration. Then there is the income-tax and that is levied in accordance with the provisions of the Income-tax Act on incomes actually earned. The learned advocate for the petitioner concedes that such a tax would be lawful and does not infringe the fundamental rights because what is guaranteed under Part III is freedom of trade and not freedom from taxation of profits made in that trade. The profession tax differs from the licence fee in that it is a fiscal measure intended to bring revenue and not merely to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ognise the existence of such powers. Article 269(1) provides that certain duties and taxes shall be levied and collected by the Government of India and assigned to the States in the manner provided and one of such taxes is "taxes other than stamp duties on transactions in stock-exchanges and future markets". (Section 269(1)(e) ), Article 276 is very important for this purpose. Article 276(1) enacts that no law of the Legislature of a State in respect of professions, trades, callings or employments shall be invalid on the ground that it relates to a tax on income. Article 276(3) provides that the power of the State Legislature to impose profession tax shall not be construed aa in any way limiting the power of the Parliament to impose taxes on incomes. Here is a plain distinction made between profession tax and tax on income earned in the profession and provision is made for imposition of both classes of taxes. Then turning to the 7th schedule we find in the Union List No. 1 item No. 90. "Taxes other than stamp duties on transactions in stock-exchanges and future markets"; and in the State List No. 2 entry No. 60. "Taxes on professions, trades, callings and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an implied power to charter banks and that under the Constitution the Congressional powers were supreme. The question then arose as to whether consistently with these conclusions the power in the States to tax the bank could be recognised. Negativing such a power Marshall C. J. observed as follows: "That the power to tax involves the power to destroy; that .the power to destroy may defeat and render useless the power to create; and that there is a plain repugnance in conferring on one Government a power to control the constitutional measures of another, which other with respect to those very measures is declared to be supreme over that which exerts the control are propositions not to be denied." It is doubtful if these observations made in deciding questions of jurisdiction between two independent sovereign bodies would have any application in construing the powers conferred by the Constitution on one and the same body. But apart from this, later decisions of the American Courts have explained these observations as limited to cases where there is no legislative competence over the subject-matter of taxation. Thus in 'Knowlton v. Moore', (1900) 178 U S 41: 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it the grant of power to tax conferred upon Congress by the Constitution." In this connection the following observations occurring in 'Murdock v. Pennsylvania', (1943) 319 U S 105: 87 Law Ed. 1292, are relevant. In criticising the view of the majority that the sale of the religious literature was an exercise of religion and that was, therefore, protected under Amendment No. 14, Reed, J. observed as follows: "Nor do we understand that the Court now maintains that the Federal Constitution frees press or religion of any tax except such occupational taxes as those here levied. Income-taxes, ad valorem taxes even occupational taxes are presumably valid save only a licence tax on sales of religious books......" and again "It has never been thought before that freedom from taxation was a perquisite attaching to the privileges of the First amendment." Frankfurter, J. observed: "Nor can a tax be invalidated merely because it falls upon activities which constitute an exercise of a constitutional right. The First Amendment, of course, protects the right to publish a newspaper or a magazine or a book. But the crucial question is how much protection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, freedom In the exercise of religion, freedom of speech & freedom of the Press, enumerated in amendment No. 1 which have latterly been interpreted as comprised in the due process clause in the 14th amendment. But there is vast difference between those three freedoms and the other freedoms relating to property or trade; Under the English law, a person may not be prevented from speaking or writing what he will on the ground that if permitted to speak or write he might commit a tort or an offence. The remedy is only to proceed against him for any breach of the law 'which he might commit in his speech or writing. The law is thus stated by' Black-stone in his Commentaries: "The liberty of the Press is indeed essential to the nature of a free State; but this consists in laying no previous restraints upon publications and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public; to forbid this is to destroy the freedom of the press; but if he published what is improper, mischievous or illegal he must take the consequence of his own temerity." (4 B1. Com. 151, 152). 46. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts in 'Jones v. Opelika', (1942) 316 U S 584: 86 Law Ed. 1691, were precisely the same. In both these decisions there was a sharp difference of opinion among the Judges and all of them acted on the view that if the activities of Jehovah's witnesses were commercial in character the levy of the tax being an occupation tax would be valid. It was not suggested that as an occupation tax it would infringe the fundamental right to trade under the 14th amendment. The point on which the Judges differed was whether the activities were commercial or religions. The Judges who held that the tax was unconstitutional proceeded on the view that there was no commercial activity but merely exercise of religions and in that view they applied the principle that previous restraint was illegal. This is what Douglas, J. who delivered the majority judgment in 'Murdock v. Pennsylvania', (1943) 319 U S 105: 87 Law Ed. 1292, observed: "As we have said, the problem of drawing the line between a purely commercial activity and a religious one will at times be difficult. On this record it plainly cannot be said that petitioners were engaged in commercial rather than a religious venture. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter. Has the Legislature power to impose tax on the fundamental rights without any limit whatsoever? The law undoubtedly is that the sovereign power of taxation is absolute, that it could be exercised up to any limit, that the determination of that limit is for the legislature and that it knows of no limitations except what are prescribed by the Constitution. The laws fixing taxes cannot be questioned in the Courts on the ground that the tax is heavy & oppressive and this principle has been applied to Stamp Act as well. 52. In 'Patton v. Brady', (1902) 184 U S 608: 46 Law Ed. 713, the contention that the tax was excessive was rejected and it was remarked; "that it is no part of the function of a Court to enquire into the reasonableness of the exercise, either as respects the amount or property on which it is imposed." 'Treat v. White', (1901) 181 U S 264: 45 Law Ed. 853, is another stamp duty case in which it was held that it was not within the province of the Court to examine the propriety of the tax. The following passage from Cooley on Constitutional law may be quoted in this context: "The power to tax is an incident of sovereignty and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ah's witnesses Reed, J. who delivered the opinion of the majority observed as follows: "Consequently there is not before us the question of the power to levy fees objectionable in their effect because of their size upon the constitutionally protected rights of free speech, press or exercise of religion." In 'Murdock v. Pennsylvania', (1943)' 319 US 105: 87 Law Ed. 1292, Frankfurter, J. who was for holding that the tax was valid observed as follows: "No claim is made that the effect of these , taxes either separately or cumulatively has been or is likely to be to restrict the petitioners' religious propaganda activities in any degree. Counsel expressly disclaim any such contention." and again "No complaint is made against the size of the taxes. If an appropriate claim indicating that the taxes were oppressive in their effect upon the petitioners' activities had been made the issues here would be very different. No such claim has been made and it would be gratuitous to consider its merits." The decision in 'Grosjean v. American Press CO.', (1936) 297 U S 233: 80 Law Ed. 660, would seem to be based on the same pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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