THE TAMIL NADU PANCHAYATS ACT, 1994

(Tamil Nadu Act 21 of 1994)

¹[CHAPTER IX-A

TAX ON PROFESSION, TRADE, CALLING AND EMPLOYMENT

                   198-A. Definitions.- For the purposes of this chapter,-

                   (a) “employee” means a person employed on salary and includes,-

                           (i) a Government servant receiving pay from the revenue of the Central Government or any State Government;

                           (ii) a person in the service of a body whether incorporated or not, which is owned or controlled by the Central Government or any State Government, where such body operates within the Panchayat Village eventhough its headquarters may be outside that Panchayat Village; and

                           (iii) a person engaged in any employment by an employer, not covered by sub-clauses (i) and (ii);

                   (b) “employer” in relation to an employee earning any salary on a regular basis under him means, the person or the officer who is responsible for disbursement of such salary and includes the head of the office or any establishment as well as the Manager or Agent of the employer;

                   (c) “half-year” shall be from the 1^st day of April to the 30^th day of September and from the 1^st day of October to the 31^st day of March of a year;

                   (d) “month” means a calendar month;

                   (e) “person” means any person who is engaged actively or otherwise in any profession, trade, calling or employment in the State of Tamil Nadu and includes a Hindu undivided family, firm, company, corporation or other corporate body, any society, club, body of persons or association, so engaged, but does not include any person employed on a casual basis;

                   (f) “tax” means the tax on profession, trade, calling and employment levied under this chapter.

                   198-B. Levy of profession tax.- (1) There shall be levied by the Village Panchayat a tax on profession, trade, calling and employment.

                   (2) Every company which transacts business and every person, who is engaged actively or otherwise in any profession, trade, calling or employment within the Panchayat Village  on the first day of the half year  for which return is filed,  shall pay half yearly tax at the rates specified in the Table below in such manner as may be prescribed:-

                   (3) The rate of tax payable under sub-section (2) shall be published by the Inspector in such manner as may be prescribed.

                   (4) Where a company or person proves that it or he has paid the sum due on account of the tax levied under this Chapter or any tax of the nature of a profession tax imposed under the Cantonments Act, 1924 (Central Act II of 1924) for the same half year to any Local Authority or Cantonment Authority in the State of Tamil Nadu, such company or person shall not be liable, by reason merely of change of place of business, exercise of profession, trade, calling or employment, or residence, to pay the tax to any other local authority or Cantonment Authority.

                   (5)   The tax leviable from a Firm, Association or Hindu Undivided Family may be levied on any adult member of the Firm, Association or Family.

                   (6) Where a person doing the same business in the same name in one or more places within the Panchayat Village , the income of such business in all places within the Panchayat Village shall be computed for the purpose of levy of tax and such person shall pay the tax in accordance with the provisions of this Chapter.

                   (7) Where any Company, a Corporate Body, Society, Firm, Body of persons or Association pays the tax under this Chapter, any director, partner or member, as the case may be, of such Company, Corporate Body, Society, Firm, Body of persons or Association shall not be liable to pay tax under this Chapter  for the income derived by such director, partner or member from such Company, Corporate Body, Society, Firm, Body of persons or Association:

                   Provided that such director, partner or member shall be liable to pay tax under this Chapter for the income derived from other sources.

                   (8) Every person who is liable to pay tax, other than a person earning salary or wage shall furnish to the Executive Authority a return in such form, for such period and within such date and in such manner as may be prescribed.

                   Provided that subject to the provisions of sub-section (10) and (11), such person may make a self assessment on the basis of average half yearly income of the previous financial year and the return filed by him shall be accepted without calling for the accounts and without any inspection.

                   (9) Every such return shall accompany with the proof of payment of the full amount of tax due according to the return and a return without such proof of payment shall not be deemed to have been duly filed.

                   (10) Notwithstanding anything contained in the proviso to sub-section (8), the Executive Authority may select ten percent of the total number of such assessment in such manner as may be prescribed for the purpose of detailed scrutiny regarding the correctness of the return submitted by a person in this connection and in such cases final assessment order shall be passed in accordance with the provisions of this Chapter.

                   (11) If no return is submitted by any person under sub-section (8) within the prescribed period or if the return submitted by him appears to the Executive Authority to be incomplete or incorrect, the Executive Authority shall, after making such enquiry as he may consider necessary, assess such person to the best of his judgement:

                   Provided that before taking action under this sub-section, the person shall be given a reasonable opportunity of proving the correctness or completeness of any return submitted by him.

                   (12) Every person who is liable to pay tax under this section, other than a person earning salary or wage-

                           (a) shall be issued with a pass book containing such details relating to such payment of tax as may be prescribed and if the pass book is lost or accidentally destroyed, the Executive Authority may, on an application made by the person accompanied by such fee as may be fixed by the Village Panchayat, issue to such person a duplicate of the pass book.

                           (b) shall be allotted a permanent account number and such person shall-

                                    (i) quote such number in all his returns to, or correspondence with, the Executive Authority;

                                    (ii) quote such number in all challans for the payment of any sum due under this Chapter.

                   (13) The rate of tax specified under sub-section (2) shall be revised by the Village Panchayat once in every five years and such revision of tax shall be increased not less than twenty five percent and not more than thirty five percent of the tax levied immediately before the date of revision.

                   198-C. Employers liability to deduct and pay tax on behalf of the Employees.- The tax payable by any person earning a salary or wage shall be deducted by his employer from the salary payable to such person, before such salary or wage is paid to him such manner as may be prescribed, and such employer shall, irrespective of whether such deduction has been made or not when the salary or wage is paid to such person, be liable to pay tax on behalf of such person:

                   Provided that if the employer is an officer of the State or Central Government, the Government may, notwithstanding anything contained in this Chapter, prescribed the manner in which such employer shall discharge the said liability.

                   198-D. Filing of returns by Employer.- (1) Every employer liable to pay tax under this chapter shall file a return to the Executive Authority in such form, for such period and by such date as may be prescribed, showing therein the salaries paid by him to the employees and the amount of tax deducted by him in respect of such employees.

                   (2) Every such return shall accompany with the proof of payment of the full amount of tax due according to the return and a return without such proof of payment shall not be deemed to have been duly filed.

                   198-E. Assessment of the Employer.- (1) The Executive Authority, if satisfied, that any return filed by any employer under sub-section (1) of Section 198-D is correct and complete, shall accept the return.

                   (2) Where an employer has failed to file any return under sub-section (1) of Section 198-D within the time or if the return filed by him appears to the Executive Authority to be incorrect or incomplete, the Executive Authority shall, after making such enquiry as he considers necessary, determine the tax due and assess the employer to the best of his judgment and issue a notice of demand for the tax so assessed:

                   Provided that before assessing the tax due, the Executive Authority shall give the employer a reasonable opportunity of being heard.

                   198-F. Penalty and interest.- (1) In addition to the tax assessed under sub-section (11) of Section 198-B or sub-section (2) of Section 198-E, the Executive Authority shall direct the person or employer to pay by way of penalty a sum-

                   Which shall be, in the case of submission of incorrect or incomplete return, one hundred percent of the difference of the tax assessed and the tax paid as per return:

                   Provided that no penalty under this sub-section shall be imposed after the period of three years from the date of the order of the assessment under this chapter and unless the person affected has had a reasonable opportunity of showing cause against imposition.

                   (2) On any amount remaining unpaid after the dates specified for its payment, the person or employer shall pay, in addition to the amount due, interest at such rate not exceeding one percent per mensem of such amount for the entire period of default, as may be prescribed.

                   198-G. Appeal.- (1) Any person or employer aggrieved by any order or decision of the Executive Authority in relation to the payment of tax (including penalty, fee and interest) may, within such time as may be prescribed, appeal to the authority prescribed under Section 174.

                   (2) The decision of the authority referred to in sub-section (1) shall be final and shall not be questioned in any Court of law:

                   Provided that no such decision shall be made except after giving the person affected a reasonable opportunity of being heard.                            

                   198-H. Exemptions.- Nothing contained in this Chapter shall apply to-

                           (a) the members of the Armed Forces of the Union serving in any part of this State, to whom the provisions of the Army Act, 1950 (Central Act XLVI of 1950), the Air Force Act, 1950 (Central Act XLV of 1950), or the Navy Act, 1957 (Central Act LXII of 1957), applies;

                           (b) the members of the Central Reserve Police Force to whom the Central Reserve Police Force Act, 1949 (Central Act XLVI of 1949) applies and serving in any part of this State;

                           (c) physically disabled persons with total disability in one or both the hands or legs, spastics, totally dumb or deaf persons or totally blind persons:

                           Provided that such physical disability shall be duly certified by a Registered Medical Practitioner in the service of the Government not below the rank of Civil Surgeon.

                   198-I. Repeal and Savings.- (1) The Tamil Nadu Tax on Professions, Trades, Callings and Employments Act, 1992 (Tamil Nadu Act 24 of 1992) (hereinafter in this Section referred to as the 1992 Act) in its application to the Village Panchayat, is hereby repealed.

                   (2) The repeal of the 1992 Act under sub-section (1) shall not affect,-

                           (i) the previous operation of the said Act or anything done or duly suffered thereunder; or

                           (ii) any right, privileges, obligations or liabilities acquired, accrued or incurred under the said Act; or

                           (iii) any penalty, forfeiture or punishment incurred in respect of any offence committed.

                   (3) Notwithstanding the repeal of the 1992 Act, the rates of tax on professions, trades, callings and employments specified in the Schedule to the said Act shall continue to apply for the period commencing on the 1^st day of April 1992 and ending with the 30^th day of September 1998 for the levy and collection of such tax for the said period, where the tax due under that Act has not been paid for the said period.

                   (4) The provision of this chapter, other than the rates of tax specified in sub-section (2) of Section 138-B and the provisions relating to penalty and interest, shall mutatis mutandis apply to the levy and collection of tax for the period mentioned in sub-section (3).

                   (5) The arrears of tax under the 1992 Act shall be paid in six equal half yearly instalments in such manner and within such period as may be prescribed].