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Jaldacca Tea Plantations Private Vs. State of West Bengal and ors. - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT West Bengal
Decided On
Judge
AppellantJaldacca Tea Plantations Private
RespondentState of West Bengal and ors.
Excerpt:
1. the propriety of the requirement for deposit of 50 per cent. of assessed tax for preferring an appeal against an order of assessment under the bengal agricultural income-tax act, 1944 (hereinafter referred to as "the act" for the sake of convenience), is under challenge in this application under section 8 of the west bengal taxation tribunal act, 1987, which is in the nature of a writ petition under article 226 of the constitution of india.2. the case of the applicants is that the applicant no. 1, jaldacca tea plantations private limited, is a private limited company. it is the proprietor of jaldacca altadanga tea estate in the district of jalpaiguri. in that tea estate, applicant no. 1 grows and manufactures tea and sells it in the market. on or about march 5, 1992, applicant no. 1.....
Judgment:
1. The propriety of the requirement for deposit of 50 per cent. of assessed tax for preferring an appeal against an order of assessment under the Bengal Agricultural Income-tax Act, 1944 (hereinafter referred to as "the Act" for the sake of convenience), is under challenge in this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, which is in the nature of a writ petition under Article 226 of the Constitution of India.

2. The case of the applicants is that the applicant No. 1, Jaldacca Tea Plantations Private Limited, is a private limited company. It is the proprietor of Jaldacca Altadanga Tea Estate in the district of Jalpaiguri. In that tea estate, applicant No. 1 grows and manufactures tea and sells it in the market. On or about March 5, 1992, applicant No. 1 furnished a return before respondent No. 4, the Agricultural Income-tax Officer, Jalpaiguri Range, for Rs. 1,10,360 for the period ended December 31, 1984, relating to the agricultural income-tax of the tea estate for the year 1985-86, under Section 24(3) of the Act. Since there was no assessment under the Income-tax Act, 1961, applicant No. 1 could not file a certified copy of the order of assessment under the Income-tax Act, 1961, for the purpose of assessment to agricultural income-tax in respect of applicant No, 1 for the year 1985-86. The certified copy of the order of assessment under the Income-tax Act, 1961, was to be filed under Section 8(3) of the Act. For non-filing of such certified copy of the order of assessment under the Income-tax Act, respondent No. 4 made an assessment to agricultural income-tax to the best of his judgment under Section 25(5) of the Act at Rs. 1,72,524, after setting off losses for the years 1982-83 and 1983-84.

In that order of assessment dated March 26, 1992, respondent No. 4, the Agricultural Income-tax Officer, added a sum of Rs. 2,16,066 representing expenditure shown in the balance-sheet during the year 1985-86. The applicants received a demand notice dated March 26, 1992, in respect of Rs. 1,19,042 payable as agricultural income-tax. They received another demand notice dated March 26, 1992, for the same amount of Rs. 1,19,042 towards interest. The applicants have challenged this assessment under Section 24(5) of the Act as being without jurisdiction on the ground that there was no failure on the part of the applicants to furnish a return or any failure to produce a certified copy of the order of assessment under the Income-tax Act, 1961. It was alleged that the assessment for the year ending 1984, as made on March 26, 1992, was beyond the period of six years envisaged in Section 38 of the Act and was barred by law and statutory limitation. The applicants alleged that they preferred an appeal against the order of assessment.

On July 23, 1992, respondent No. 3, the Assistant Commissioner of Agricultural Income-tax, Jalpaiguri Circle (the appellate authority), sent a letter to Messrs. Jaldacca Altadanga Tea Estate (hereinafter called "the tea estate") for deposit of 50 per cent. of the tax appealed against for admission of the appeal and granted time till August 5, 1992, for deposit of 50 per cent. of the tax. On August 11, 1992, an advocate's letter was sent to respondent No. 3, demanding justice and expressing willingness to deposit 50 per cent, of the admitted amount of tax for the purpose of admission of the appeal, without prejudice to the rights and contentions of the tea estate. In reply to this letter, respondent No. 3 sent another letter dated November 27, 1992, to the tea estate, granting time again to the tea estate up to December 15, 1992, for production of evidence towards payment of 50 per cent. of the tax for admission of the appeal. As the tea estate did not thereafter deposit 50 per cent, of the tax by December 15, 1992, the appeal filed by the tea estate against the order of assessment dated March 26, 1992, was rejected by respondent No. 3 on December 1'7, 1992. The applicants have filed the present application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, for setting aside the order of assessment dated March 26, 1992, and the appellate order dated December 17, 1992, alleging and praying for a declaration that the provisions in the proviso to Section 34(1) of the Act, directing deposit of 50 per cent. of the tax assessed for admission of an appeal, is ultra vires Article 14 of the Constitution.

The case of the applicants is that this proviso to Section 34 of the Act violates Articles 14, 19, and 300A of the Constitution. It is alleged that the requirement of deposit of 50 per cent. of the tax assessed for admission of the appeal has a serious effect on the livelihood of taxpayers and is violative of the provisions of Article 21 of the Constitution. The applicants further allege that under similar circumstances and under the same State Government, the assessee is required to pay only the admitted amount of tax, interest or penalty for filing of appeal under the sales tax laws of the State and that the discrimination, by way of asking for deposit of 50 per cent. of the tax assessed for admission of an appeal under the Act, is harsh, oppressive, unjust and violative of Article 14 of the Constitution.

3. The respondents deny all the material allegations made by the applicants by filing an affidavit-in-opposition. The case of the respondents is that as the applicants did not produce the order of assessment of the income-tax authority for the assessment year 1985-86, the Agricultural Income-tax Officer completed the assessment to the best of his judgment on the basis of Section 25(5) of the Act. The assessment is not barred by limitation for being completed within the stipulated period of six years computed from the assessment year 1985-86. As regards the grievance of the applicants regarding their liability to pay interest, the respondents contend that as the applicants failed to pay advance tax, they were liable to pay interest under the provisions of Section 26E(1) of the Act. According to the respondents, the requirement of payment of 50 per cent. of the assessed tax before filing of an appeal against an order of assessment under the Act is neither harsh, arbitrary nor violative of any of the articles of the Constitution. It is alleged that the proviso to Section 34(1) about the requirement of deposit of 50 per cent. of the assessed tax before filing an appeal is a "machinery provision" for enforcing collection of revenue legally payable by the assessee and that the State Legislature is entitled to devise ways and means of enforcing collection of revenue, after considering all attending circumstances. The respondents further allege that in many other similar tax statutes, the State Legislature had made identical provisions for filing of appeals and that the provisions in the proviso to Section 34(1) of the Act cannot be held to be arbitrary, coercive and ultra vires the Constitution.

4. The applicants have filed an affidavit-in-reply, going to show that the representatives of the applicants stated at the time of hearing before respondent No. 4 that the assessment under the Income-tax Act, 1961, was under process for the assessment year 1985-86. It is alleged that on hearing such statements, respondent No. 4 caused enquiry both in the office of the Central Income-tax Office at Jalpaiguri and at Calcutta and that respondent No. 4 failed to collect the copy of the order of assessment under the Income-tax Act. On alleging these facts, the applicants contend that there was no failure on the part of the assessee to produce the certified copy of the assessment order under the Income-tax Act and, hence the assessment under Section 25(5) of the Act was without jurisdiction.

5. For disposing of the application under Section 8 of the West Bengal Taxation Tribunal Act, it is not necessary to discuss as to whether the assessment under Section 25(5) on March 26, 1992, is without jurisdiction or not or whether the assessment is barred by limitation under the provisions of Section 38 of the Act or as to whether there ought to have been levy of interest under the provisions of Section 26E of the Act. These matters are to be decided by the appellate authority in case the appeal filed before respondent No. 3 is admitted. The sole question to be determined in this application is whether the requirement of deposit of 50 per cent. of the assessed tax as pre-requisite for admission of appeal against the order of assessment dated March 26, 1992, is ultra vires any of the articles of the Constitution. If the proviso to Section 34(1) of the Act is ultra vires Articles 14, 19 and 300A or 21 of the Constitution, the appellate order dated December 17, 1992, is to be set aside ; otherwise, the application before this Tribunal is to be rejected.

6. Before examining the constitutional validity of the provisions relating to appeal against the order of assessment under the Act, it will be useful to recite these provisions. Section 34 of the Act, before amendment by the Bengal Agricultural Income-tax (Amendment) Act, 1975 (West Bengal Act VI of 1975), did not contain any provision for deposit of 50 per cent. of the assessed tax for admission of an appeal against an order of assessment under the Act. Section 34, prior to its amendment in 1975, stood as follows : "Section 34. (1) Any assessee objecting to the amount of agricultural income assessed under Section 25 or Section 31 or the amount of loss computed under Section 26 or the amount of agricultural income-tax determined under Section 25 or Section 31 or denying his liability to be assessed under this Act or objecting to a refusal of an Agricultural Income-tax Officer to make a fresh assessment under Section 31 or objecting to any order under Section 30 or Section 32 made by an Agricultural Income-tax Officer or objecting to any order imposing any penalty by an Agricultural Income-tax Officer under Sub-section (1) of Section 45 or objecting to a refusal of an Agricultural Income-tax Officer to allow a claim to a refund under Section 47, 48 or 51 or the amount of the refund allowed by the Agricultural Income-tax Officer under any of those Sections, may appeal to the Assistant Commissioner against the assessment or against such refusal or order : Provided that no appeal shall lie against an order under Sub-section (1) of Section 45 unless the agricultural income-tax has been paid.

. , ." 7. By the Bengal Agricultural Income-tax (Amendment) Act, 1975, several sections of the Act including Section 34 of the Act were amended, There are two provisos to Section-34(1) of the Act, after the amendment in 1975. We are concerned in this application with the first proviso to Section 34(1) of the Act. This first proviso is reproduced below : "Provided that no appeal shall lie against an assessment made under Section 25 unless an amount equal to fifty per cent, of the tax assessed under this Act has been deposited by. the appellant." "Provided further that no appeal shall lie against an order under Sub-section (1) of Section 45 unless the agricultural income-tax has been paid." 9. The Statement of Objects and Reasons annexed to the Bill relating to West Bengal Act VI of 1975, was as follows : "The Bill seeks to amend the Schedule to the Agricultural Income-tax Act for restructuring the slabs for agricultural income and the rates thereon. It provides that while agricultural income alone would be taxed the agricultural as also the non-agricultural income of an assessee would be taken into account for fixation of the rates of such tax. It contains provisions for self-assessment and certain other provisions." 10. Mr. G.R. Saha, the learned advocate for the applicants, has assailed the provisions regarding deposit of 50 per cent. of the tax assessed for entertainment of an appeal against an order of assessment under the Act on several grounds. His first contention is that the aforesaid Statement of Objects and Reasons for passing the Bengal Act VI of 1975 does not show the necessity for passing such a stringent provision for deposit of 50 per cent. of the tax assessed for entertainment of an appeal. It is contended that as the circumstances necessitating the deposit of 50 per cent. of the tax assessed are not mentioned in the Statement of Objects and Reasons for passing the Act, these provisions for deposit of 50 per cent. of the tax assessed should not continue. This contention cannot be accepted. Reference to the Statement of Objects and Reasons is permissible for understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the statute, and the evil which the statute sought to remedy. The Statement of Objects and Reasons seeks to explain what reasons induced the mover to introduce the Bill in the House and what objects he sought to achieve. These objects and reasons may or may not correspond to the objective which the majority of members had in view when they passed the Bill into law. The Bill may have undergone radical changes during its passage through the House.

There is no guarantee that the reasons which led to the introduction of the Bill remained the same throughout till the Bill emerged from the House as an Act of the Legislature. The Statement of Objects and Reasons does not form part of the Bill and is not voted upon by the Members. In the circumstances, the absence of mention of any circumstance, necessitating the incorporation of the provision regarding deposit of 50 per cent. of the tax assessed before entertaining an appeal against an order of assessment under the Act cannot be a ground for nullifying the first proviso to Section 34(1) of the Act for deposit of 50 per cent. of the tax assessed.

11. Mr. Saha, the learned advocate for the applicants, has next assailed the first proviso to Section 34(1) of the Act on the ground that it is violative of Article 14 of the Constitution. In this connection, reference has been made to the cases of A.B. Shanthi v.Asst. Director of Inspection [1992] 197 ITR 330 (Mad), Monarajan Chakraborty v. State of Tripura [1991] 81 STC 291 (Gauhati) and Kunnathat Thathunni Moopil Nair v. State, of Kerala, AIR 1961 SC 552.

It is now well-settled that the right of appeal is a statutory right.

The right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal, being a statutory right, can be circumscribed by the conditions in the grant.

It is not the law that the adjudication by itself following the rules of natural justice would be violative of any right -- constitutional or statutory--without any right of appeal, as such. If a statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant. (Vijay Prakash D. Mehta v. Collector of Customs (Preventive), [1989] 175 ITR 540 (SC) ; AIR 1988 SC 2010), In the case of Anant Mills Co. Ltd. v. State of Gujarat, AIR 1975 SC 1234, the Supreme Court had occasion to consider the vires of Section 406(2)(e) of the Bombay Provincial Municipal Corporations Act, 1949, as amended in its application to Gujarat by Gujarat Acts No. 8 of 1968 and 5 of 1970 regarding entertainment of an appeal by & person who had not deposited the amount of tax due from him and who had not been able to show to the appellate judge that the deposit of the amount would cause him undue hardship, arising out of his own omission and default. In paragraph. 40 of that report the following observations were made by the Supreme Court (at page 1249) : "We fail to understand as to why the Legislature while granting the right of appeal cannot impose conditions for the exercise of such right. In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It is permissible, for example, to prescribe a condition in criminal cases that unless a convicted person is released on bail, he must surrender to custody before his appeal against the sentence of imprisonment would be entertained. Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute book in Section 30 of the Indian Income-tax Act, 1922. The proviso to that section provided that '. .

. . no appeal shall lie against an order under Sub-section (1) of Section 46 unless the tax had been paid'. Such conditions merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. . . ."Navin Chandra Chhotelal v.Central Board of Excise, and Customs, AIR 1971 SC 2280, relating to Section 129(1) of the Customs Act, 1962, under which it was obligatory on the appellant to deposit duty or penalty pending appeal or to comply with the order passed under the proviso to that Section 129(1) of the Customs Act. It was held in that case that on the failure of the appellant to comply with either requirement, the appellate authority was competent to dismiss the appeal, though dismissal of such appeal was not expressly provided for in Section 129 of the Customs Act. In the case of Vijay Prakash D. Mehta v. Collector of Customs (Preventive) [1989] 175 ITR 540 ; AIR 1988 SC 2010, it was held, while construing the provisions of Section 129A and Section 129E of the Customs Act, 1962, that the right of appeal can be conditional, as mentioned in those sections. These cases as well as the case of Nand Lal v. State of Haryana, AIR 1980 SC 2097, were considered by the Supreme Court in a recent case of Shyam Kishore v. Municipal Corporation of Delhi, AIR 1992. SC 2279, wherein the Supreme Court reiterated the view in the case of Nand Lal v. State, of Haryana, AIR 1980 SC 2097, that the right of appeal was a creature of statute and that there was no reason why the Legislature while granting the right could not impose conditions for the exercise of such right so long as the conditions were not so onerous as to amount to unreasonable restrictions rendering the right almost illusory, In these cases, the Supreme Court had no occasion to consider what the position would be if the conditions placed on the right of appeal were unduly onerous so as to render the right of appeal almost illusory. This question was not considered in the case of Shyam Kishore, AIR 1992 SC 2279, as the provisions of Section 170(b) of the Delhi Municipal Corporation Act, 1957, which were discussed in that case, were held to be intra vires by the Supreme Court on the ground that under the provisions of that section, an appeal could be admitted or entertained but could not be heard or disposed of without pre-deposit of disputed tax under that Act. The question is whether in the present case the requirement of deposit of 50 per cent. of the tax assessed can be stated to be unduly onerous so as to render the right of appeal totally illusory.

13. The case of A.B. Shanthi v. Assistant Director of Inspection [1992] 197 ITR 330 (Mad) related to the question as to whether Section 269SS of the Income-tax Act, 1961, under which a borrower was to be under an obligation to take a loan by an account payee cheque or account payee bank draft for an amount of Rs. 10,000 or more was violative of Article 14, being punishable under Section 276 DD of the Income-tax Act. The single Bench decision of the Madras High Court in that case was that Section 269SS of the Income-tax Act was violative of Article 14 as no obligation was cast on the lender of the money, which was an integral part of a loan transaction, and this discrimination by way of leaving the lender out of the purview of Section 269SS would amount to a classification which was not a rational one. It was held in that case that the classification was not based on an intelligible differentia which distinguished those that were grouped together from others, viz., the lenders. Mr. S.N. Bose, the learned advocate, for the respondents, has stated that this decision is probably under appeal to the Supreme Court. Be that as it may, this decision in the case of A.B. Shanthi [1992] 197 ITR 330 (Mad) is not at all applicable to the facts of the present case. It is no doubt true that the principle of reasonableness pervades Article 14 like a brooding omnipresence. The requirement of deposit of 50 per cent. of tax assessed cannot, however, be stated to be unreasonable making the right of appeal totally illusory, though this is onerous. The decision of the Supreme Court in the case of Raja Jagannath Baksh Singh v. State of U. P. [19G2] 46 ITR 169 ; AIR 1962 SC 1563, is to be the effect that the validity of a taxing statute cannot be challenged merely on the ground that it imposes an unreasonably high burden. A challenge to a taxing statute as colourable legislation cannot succeed merely by showing that the tax levied is unreasonably high or excessive. Such a conclusion can be reached where in passing the Act, the Legislature has merely adopted a device and a cloak to confiscate the property of the citizen taxed. In fact, this confiscatory nature was dealt with by the Division Bench in the case of Monoranjan Chakraborty v. State of Tripura [1991] 81. STC 291 (Gauhati). The case of Monoranjan Chakraborty [1991] 81 STC 291 (Gauhati), related to some amendments to the Tripura Sales Tax Act, 1976. Under those amendments to Sections 20 and 21 of that Act in 1984, deposit of 50 per cent. of tax or penalty was made incumbent for entertaining an appeal against an order of assessment or imposition of penalty, though previously there was scope for exercise of judicial discretion to admit an appeal without any such deposit or to ask the dealer to deposit such portion of tax or penalty as the appellant authority thought fit so far as the revision was concerned, the pre-condition of payment of 50 per cent. of amount tax or penalty was introduced for admission of an application for revision, though there was previously no such pre-condition for payment of any tax or penalty for admission of an application for revision. In considering the constitutionality of these amendments, their Lordships of the Gauhati High Court made a reference to the Supreme Court judgment in the case of Kunnathat Thathunni Moopil Nair v. State of Kerala, AIR 1961 SC 552, and were of the opinion that these amendments for preferring appeal and revision were ultra vires Article 14 of the Constitution and were clearly confiscatory in character and effect. The view of this Tribunal regarding the confiscatory nature of tax is different. In an unreported decision in the case of Reja Tarapada Solvent Extraction Co. Put. Ltd. v. State, of West Bengal (Case No. RN38(T) of 1990, disposed of on September 11, 1991), it was held by this Tribunal, on analysing the facts in the case of Kunnathat Thathunni Moopil Nair, AIR 1961 SC 552, that a tax to be confiscatory must be expropriatory. In the case of Kunnathat Thathunni Moopil Nair, AIR 1961 SC 552, the petitioner was making an income of Rs. 3,100 per year out of some forests for which he had to pay, under the Travancore Cochin Land Tax Act, 1955, as amended in 1957, a tax which would have amounted to Rs. 50,000 a year and had to pay a levy of Rs. 4,000 on the surveyed portion of the said forest.

The liability for taxation in respect of the forest land amounted to Rs. 54,000 whereas the annual income was only Rs. 3,100 without making any deduction for expenses of management. It was in the context of these facts, that it was observed by the Supreme Court in the case of Kunnathat Thathunni Moopil Nair, AIR 1961 SC 552, that the Travancore-Cochin Land Tax Act, apart from being discriminatory and imposing unreasonable restrictions on the holding of property, was clearly confiscatory in character and effect, The provision for deposit of 50 per cent. of assessed tax for entertainment of an appeal under the Act is not expropriatory. Persons who feel aggrieved against orders of assessment of agricultural income-tax and prefer appeals form one class and they have been equally treated. Taxation is now increasingly regarded as a potent fiscal tool of state policy to strike the required balance -- required in the context of the felt needs of the time --between a citizen's claim to enjoyment of his property on the one hand and the need for an equitable distribution of the burdens of the community to sustain social services and purposes. Persons who pay agricultural income-tax are better off than those who do not pay agricultural income-tax, though owning agricultural lands. The second category of persons owning agricultural lands and not paying agricultural income-tax are better off than those who do not practically own any agricultural land. If, in this context, the Legislature feels that deposit of 50 per cent. of the assessed tax will be necessary for entertainment of the appeal against an assessment of agricultural income-tax, such provision for deposit of 50 per cent. of agricultural income-tax for entertainment of an appeal cannot be stated to be violative of Article 14 of the Constitution. It is no doubt true that before the amendment in 1975, there was no provision in Section 34 of the Act for deposit of any tax or a portion thereof for entertaining any appeal against an assessment to agricultural income-tax under Section 25 of the Act. The restriction in the unamended Section 34 of the Act, in the matter of preferring an appeal, was only with regard to an order under Section 45(1) of that Act. Though the amendment in Section 34 imposed the necessity of deposit of 50 per cent. of the assessed tax for entertaining an appeal against an order of assessment, the amendment cannot be struck down on the ground of previous legislative practice. In a recent case of Sri Srinivasa theatre v.Government of Tamil Nadu, AIR 1992 SC 999, the Supreme Court has held that the theory of legislative practice cannot be brought in to invalidate a legislation. In fact, the decision of the Bombay High Court in the case of Elora Construction Co. v. Municipal Corporation of Greater Bombay, AIR 1980 Bom 162, and of the Calcutta High Court in the case of Chatter Singh Baid v. Corporation of Calcutta, AIR 1984 Cal 283, go to show that the first proviso to Section 34(1) of the Act, directing non-entertainment of any appeal against an assessment made under Section 25 without deposit of 50 per cent. of the tax assessed by the appellant, is not at all violative of Article 14 of the Constitution.

14. Taxation is not an intrusion into the right to private property (Keshavji Ravji and Co. v. CIT [1990] 183 ITR 1 ; AIR 1991 SC 1806) and hence the first proviso to Section 34(1) of the Act for deposit of 50 per cent. of the tax for entertainment of an appeal is not violative of Article 300A of the Constitution. Article 21 is not attracted in a case of trade or business, either big or small. The right to carry on. any trade or business and the concept of life and personal liberty within Article 21 are too remote to be connected together (Sodan Singh v. New Delhi Municipal Committee, AIR 1989 SC 1988). As such, the first proviso to Section 34(1) of the Act for deposit of 50 per cent. of the assessed tax is not violative of Article 21 of the Constitution, No argument has been advanced by Mr. Saha, the learned advocate for the applicants to show that the provision for deposit of 50 percent, of the assessed tax is violative of Article 19(1)(g) of the Constitution.

15. The next contention of Mr. Saha, the learned advocate, for the applicants, is that under similar circumstances and under the same State Government an assessee to sales tax is required to pay only the admitted amount of tax, interest or penalty for filing of an appeal under the sales tax laws of the State. The contention is that the discrimination made by the Legislature by enacting the first proviso to Section 34(1) of the Act by asking for deposit of 50 per cent. of the tax assessed for admission of an appeal under the Act is Harsh, oppressive, unjust and violative of Article 14 of the Constitution.

Reference has been made by Mr. Saha, in this connection, to the provisions in the proviso to Section 20(1) of the Bengal Finance (Sales Tax) Act, 1941, and the proviso to Section 12(1) of the West Bengal Sales Tax Act, 1954, Reference has also been made by Mr. Saha, the learned advocate for the applicants, to the provisions in Section 246 of the Income-tax Act, 1961, relating to appealable orders and Section 249(4)(a) of that Act. Merely because the provisions of a Central Act relating to appeals differ from the provisions of a State Act on the same subject, it cannot be stated that they are discriminatory (Khazan Chand v. State of Jammu and Kashmir [1984] 56 STC 214 (SC)). Moreover, I have already referred to paragraph 40 from the judgment in the case of Anant Mills Co. Ltd AIR 1975 SC 1234, going to show that the proviso to Section 30 of the Indian Income-tax Act, 1922, enjoined that no appeal should lie against an order under Section 46(1) of that Act of 1922 unless the tax Had been paid. The provision for deposit of the admitted tax or the tax in full or a portion of the tax or 50 per cent, of the assessed tax for entertainment of any appeal merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in enforcement of the order appealed against in case it is ultimately dismissed. It is open to the Legislature to impose an accompanying liability upon a party upon whom a legal right to prefer appeal is conferred and to prescribe conditions for the exercise of that right. In the sales tax laws of this State, already referred to, the deposit of the admitted tax has been made precondition for entertainment of an appeal against an order of assessment of tax. In some statutes such as Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972, and the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1972, scope has been made for exercise of judicial discretion in the matter of deposit of tax for entertainment of an appeal. The proviso to Section 27(1) of the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972, enjoins deposit of an amount equal to 50 per cent, of the tax assessed or such lesser amount as the appellate officer may, after considering all the circumstances of the case, fix for entertainment of an appeal against any order passed under that Act. Rule 19(3) of the West Bengal State Tax on Professions, Trades, Callings and Employments Rules, 1979, enjoins deposit of the amount of tax or penalty or interest for preferring an" appeal against any such order for payment of such tax, penalty or interest. The proviso to -Rule 19(3) of the Rules gives a discretion to the appellate authority to entertain an appeal on payment of a lesser amount of tax or penalty or interest, when such officer is satisfied that payment of the assessed amount of tax or penalty is likely to cause undue hardship. In this State there are some other Acts in which no such discretion has been vested with the appellate authority, for entertainment of appeal. Under Rule 12(3)(a) of the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Rules, 1972, a memorandum of appeal is to bear an endorsement by the appellant that 50 per cent, of the tax assessed under Section 5 of the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972, has been paid. The proviso to Section 22(1) of the West Bengal Urban Land Taxation Act, 1976, contains a bar to the entertainment of any appeal unless at least 50 per cent, of the amount of tax, charge or penalty covered by a notice of demand has been deposited by the aggrieved owner. It is for the Legislature to decide how and in what manner it will raise revenue. The Legislature may decide that for preferring appeals against assessments under some Acts, the admitted tax should be deposited. It may decide that for entertaining such appeal no amount of assessed tax need be deposited.

It may decide that for entertaining such an appeal, at least 50 per cent, of the assessed tax should be deposited. It may decide that the assessed tax should be deposited and that discretion should be given to the appellate authority to waive this rigour in case of hardship. Such varying provisions for entertainment of appeals against orders of assessments under various State laws cannot be stated to be discriminatory or violative of Article 14 of the Constitution. The appellants in each of the Acts form one class and they have been equally treated.

16. All the contentions of Mr. Saha, the learned advocate for the appellants, challenging the vires of the proviso to Section 34(1) of the Act, relating to deposit of 50 per cent. of the assessed tax for entertainment of the appeal, thus, fail. Instead of straightaway dismissing the application, I am inclined to give the applicants another opportunity to deposit 50 per cent, of the assessed tax for entertainment of the appeal rejected by respondent No. 3 on December 17, 1992. As already stated, respondent No. 3 twice gave opportunity to the applicants to deposit 50 per cent, of the assessed tax by writing at first on" March 27, 1992, and, thereafter, on November 27, 1992. The appeal was rejected not on merits, but on the ground of non-deposit of 50 per cent of the assessed tax by December 15, 1992. In the circumstances, I think that, in the interest of justice, the applicants should be given one more opportunity to deposit 50 per cent, of the assessed tax for entertainment of the appeal filed by them before respondent No. 3 on July 23, 1992. If the applicants avail of this opportunity the appeal will be heard on the merits. In case the applicants do not avail of this opportunity, the order of respondent No. 3 dated December 17, 1992, will stand.

The application is allowed for the limited purpose of giving the applicants one more opportunity to proceed with the appeal filed by them on July 23, 1992, before respondent No. 3 against the order of assessment to agricultural income-tax made by respondent No. 4, Agricultural Income-tax Officer, Jalpaiguri Range, for the year 1985-86 on March 26, 1992. The applicants may deposit within two months from this date 50 per cent, of the assessed tax on the basis of the assessment made by respondent No. 4 on March 26, 1992, before respondent No. 3, Assistant Commissioner of Agricultural Income-tax, Jalpaiguri Circle. If the applicants deposit 50 per cent, of the assessed tax before respondent No. 3 within two months from this date, the order dated December 17, 1992, passed by respondent No. 3 rejecting the appeal against the aforesaid order of assessment should be recalled by respondent No. 3 and respondent No. 3 will thereafter proceed with the appeal and will dispose of it in accordance with law after giving an opportunity to the applicants of being heard. In case the applicants do not make deposit of 50 per cent. of the assessed tax, within two months from this date, before respondent No. 3, the order of rejection of the appeal, as passed by respondent No. 3 on December 17, 1992, will stand.

18. The application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, is rejected in all other respects.

21. While I am in agreement with the rest of the views and finding's, of the Chairman and Judicial Member, Shri S.N. Mukherjee, I am unable to agree that the first proviso to Section 34(1) of the Bengal Agricultural Income-tax Act, 1944 ("the Act", for short), is not violative of Article 14 of the Constitution, for reasons as discussed below. Since the facts of the case as also the rival contentions of the parties have already been set out in fair detail, there is no need for me to repeat the same and I, therefore, propose to only refer to them as and when necessary.

22. The challenge in this application is to the first proviso to Section 34(1) of the Act. It is the case of the applicants that the first proviso to Section 34(1), which stipulates that no appeal shall lie against an assessment made under Section 25 unless an amount equal to 50 per cent, of the tax assessed under the Act has been deposited by the appellant, is arbitrary, unreasonable, harsh, oppressive and unjust and, as such, violative of Article 14 of the Constitution. Mr. G. R.Saha, the learned advocate, appearing for the applicants, has, inter alia, relied on a judgment of the Gauhati High Court in the case of Monoranjan Chakraborty v. State of Tripura [1991] 81 STC 291. Mr. S.N.Bose, appearing for the respondents, has contended that the above first proviso to Section 34(1) is a machinery provision for enforcing collection of revenue legally payable by the assessee and that it cannot be held to be arbitrary or coercive or ultra vires the Constitution and he has relied on a judgment of the Supreme Court in the case of Shyam Kishore v. Municipal Corporal ion of Delhi, AIR 1992 SC 2279 to support his case. For a proper appreciation of the true purport and ratio of these two judgments, it is worthwhile to have a look at these judgments in some detail.

23. The Supreme Court judgment, cited by Mr. S.N. Bose relates to a case where Section 170(b) of the Delhi Municipal Corporation Act, 1957, was under challenge as being violative of Article 14. Under Section 170(b) of that Act, it was provided that an appeal against the levy or assessment of any tax under that Act could not be heard or determined by the appellate authority unless the amount, if any, in dispute in the appeal had been deposited by the appellant in the office of the Corporation. Arguments had been advanced before the court on behalf of the Corporation that the validity of similar provisions had been upheld earlier in several cases and that, even though an appeal in such cases may have to be thrown out if the amount of tax is not deposited, the assessee is not without redress inasmuch as recourse could be had to proceedings under Article 226 of the Constitution of India before the High Court and, in-appropriate cases, where a case of hardship is made out, the High Court had the undisputed power to grant relief. The prevailing position of case-law on the subject has been succinctly summed up in paragraphs 35 and 36 of the judgment in Shyam Kishore. v.Municipal Corporation of Delhi, AIR 1992 SC 2279, 2291, which are reproduced below ; "35. The decisions of the Bombay and the Calcutta High Courts earlier referred to (Elora's case, AIR 1980 Bom 162 and Chatter Singh's case, AIR 1984 Cal 283) have upheld the validity of a rigid provision banning the entertainment of an appeal altogether where the taxes are not paid. However, the Supreme Court decisions in Anant Mills' case, AIR 1975 SC 1234, Vijay Prakash D. Mehta's case [1989] 175 ITR 540 ; AIR 1988 SC 2010 and Balra (sic) had occasion to consider only the vires of a milder provision" which permitted the appellate authority to waive or relax the condition of deposit.

As explained in Nand Lal v. State of Haryana [1980] 3 SCR 1181 at page 1207 ; AIR 1980 SC 2097 at page 2109, these decisions settle the principles 'that the right of appeal is a creature of statute and there is no reason why the Legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory', (emphasis added).

The court in those cases had no occasion to consider what the position would be if the conditions placed on the right of appeal were unduly onerous or such as to render, the right of appeal totally illusory.

36. The question whether the imposition of a condition which makes a right of appeal is illusory can be valid may need careful consideration in an appropriate case. In Wire Netting Stores v. Regional Provident Fund Commissioner, [1981] Lab IC 1015, a decision of the Delhi High Court (to which one of us was a party), the lack of a provision conferring an effective right of appeal against determination of damages under the Employees' Provident Fund Act was held violative of the provisions of the Constitution. That decision is the subject-matter of an appeal which is still pending in this court. It is fortunately not necessary, for the purposes of the present case, to enter into that area in view of the construction which we propose to place on Section 170(b). We shall now turn to that question." 24. If may be seen from the above that the Supreme Court had no occasion to consider a case and decide what the position would be if the conditions placed on a right of appeal were unduly onerous or such as to render the right of appeal totally illusory. Section 170(b) of the Delhi Act was held to be intra vires the Constitution on the broader interpretation of the same given by the court to say that the section provided that an appeal can be admitted or entertained but only cannot be heard or disposed of ' without pre-deposit of the disputed tax and that such an interpretation will provide some much needed relief from the harshness of the provision. Further, on the contention on behalf of the Corporation to read the provision rigidly and seek to soften that rigour by reference to the availability of a recourse to the High Courts by way of a petition under Articles 226 and 227, it was held that it should be discouraged when there is an alternative remedy or a more satisfactory solution is available on the terms of the statute itself.

25. From the foregoing, it would appear that, though the right of appeal is only a creature of the statute and can be subject to conditions as may be stipulated, it would be open for examination whether the conditions so stipulated for filing an appeal are so onerous as to negate the right of appeal and make it illusory.

26. The other decision, reported in [1991] 81 STC 291 and cited by Mr.

G. R. Saha, the learned advocate for the petitioners, relates to a Division Bench judgment of the Gauhati High Court in the case of Monoranjan Chakraborty v. State of Tripura. The question before their Lordships was a challenge to the vires of the provisos to Sections 20 and 21(2) of the Tripura Sales Tax Act, 1976, as amended by the Tripura Sales Tax (Third Amendment) Act, 1984, by which the deposit of 50 per cent. of the tax or penalty levied was made mandatory before an appeal or revision petition could be filed. It was held that the nature of the right of appeal is no more res integra and that it is well-settled by a catena of decisions that it is not an inherent right and that it is a creature of statute and is, therefore, subject to conditions and restrictions imposed by it, Even so, the court took up for determination the question whether, in a case where no right of appeal is given against the levy of any tax or penalty without any effective remedy to approach the higher authorities against such levy of tax or imposition of penalty or is made subject to such stringent, unreasonable and impracticable restrictions and conditions so as to render it nugatory or illusory, the law can be held to be arbitrary and violative of the fundamental right's guaranteed under Articles 14 and 19(1)(g) of the Constitution. In that context, their Lordships of the Gauhati High Court have delineated the scope and ambit of Article 14 of the Constitution as expounded by various decisions of the Supreme Court. In E.P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555 ; [1974] 4 SCC 3, it was held by the Supreme Court (at page 583 of AIR 1974 SC) : "Equality is a dynamic concept with many aspects and dimensions and it cannot be 'eribbed, cabined and confined' within traditional and doctrinaire limits. From a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies ; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Article 14."Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628 ; [1979] 3 SCC 489, Bhagwati J.(as His Lordship then was) observed : "A legislation which does not contain any provision which is directly discriminatory may yet offend against the guarantee of equal protection if it confers upon the executive or administrative authority an unguided or uncontrolled discretionary power in the matter of application of law." This interpretation of Article 14 was also followed in the case of Maneha Gandhi v. Union of India, AIR 1978 SC 597 ; [1978] 1 SCC 248. In the case of Maneha Gandhi, it was observed (at page 624 of AIR 1978 SC) : "Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence". In the case of Ajay Hasia v. Khalid Mujib Sehravardi [1981] 1 SCC 722 ; AIR 1981 SC 487, it was observed (at page 499 of AIR 1981 SC) : "The doctrine of classification which is evolved by the courts is not paraphrase of Article 14 nor is it the objective and end of that article. It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and, therefore, constituting denial of equality. Wherever, therefore, there is arbitrariness in State action whether it be of the Legislature or of the executive or of an 'authority' under Article 12, Article 14 immediately springs into action and strikes down such State action. In fact, the concept of reasonableness and non-arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution." 28. Having thus concluded that the guarantee against arbitrariness and discrimination contained in Article 14 is not restricted to executive action unsupported by law but is also available against arbitrary laws, it was held that a law which is not reasonable, fair and just may also be held to be violative of Article 14. In such view of the matter, their Lordships of the Gauhati High Court proceeded to examine the vires of the impugned provisions of the Tripura Sales Tax Act vis-a-vis Article 14, with particular emphasis on whether there was any effective right of appeal, revision or any other remedy to a dealer aggrieved by an arbitrary or illegal order levying tax or penalty passed under the Act. In doing so, the possible consequences and effect of the absence of such remedy were gone into in relation to the scheme of the Tripura Sales Tax Act, the nature of the power vested in the authorities, as also the effect and consequence of the orders passed under the Act on the person concerned. Having regard to the fact that it is not the phraseology of the statute that governs situations but it is the effect of the law that is decisive. Their Lordships considered the decisions of the Supreme Court in Kunnathat Thathunni Moopil Nair v. State of Kerala, AIRBabubhai and Co. v. State of Gujarat, AIR 1985 SC 613 ; [1985] 2 SCC 732, where, at page 736, the Supreme Court observed : "It is not possible to formulate an effective test to determine in which case absence of corrective machinery by way of appeal or revision to a superior authority to rectify an adverse order passed by an authority or body on whom the power is conferred may indicate that the power so conferred is unreasonable or arbitrary. ..

."After considering whether the absence of appeal is likely to make the whole procedure oppressive and arbitrary and render the statutory provisions confiscatory in character and effect, their Lordships of the Gauhati High Court concluded : "Absence of appeal, in the instant case, in our opinion, has made the whole procedure of levy of tax and imposition of penalty highly oppressive and arbitrary. Such law, therefore, has to be held to be harsh, unjust and violative of Article 14. We, therefore, hold that the first and the second provisos to Sub-section (1) of Section 20 and the proviso to Subsection (2) of Section 21 of the Tripura Sales Tax Act, 1976, are ultra vires Article 14 of the Constitution and strike down the same". ([1991] 81 STC 306).

29. A combined reading of the Supreme Court judgment in the case of Shyam Kishore v. Municipal Corporation of Delhi, AIR 1992 SC 2279, and the Gauhati High Court judgment in the case of Monaranjan Chakraborty v. State of Tripura [1991] 81 STC 291 as discussed above at length lends credence to the view that the right of appeal in a fiscal statute, though conferred by the statute and subject to such conditions as may be prescribed by the statute, would be subject to judicial review under Article 14 of the Constitution to decide whether the conditions so imposed for filing an appeal are fair, just and reasonable or; in the alternative, such as to render the right of appeal illusory or nugatory. If it be the latter, such provision regarding the right of appeal can be struck down as being violative of Article 14 of the Constitution. The further position that emerges is that recourse to the High Courts by way of a petition under Articles 226 arid 227 cannot be, considered to be a satisfactory solution or an effective substitute for a right of appeal provided by the statute itself subject to reasonable conditions. It is in this context that the vires of the first proviso to Sub-section (1) of Section 34 of the Act has to be judged. It is, therefore, necessary to examine the salient provisions of the Act with reference to its application to the facts of the case and the resultant effect thereof.

30. Section 3 is the charging section. Section 8 relates to the computation of tax on mixed incomes where income is partially agricultural income under the Act and partially income chargeable under the head of income "Business" or "Profits and gains of business or profession" under the enactments relating to the Indian income-tax, as in the present case where the income of the applicant is derived from the growth, manufacture and sale of tea. Section 8(1A) details the manner of such computation in the case of tea where the portion of such mixed income attributable to land in West Bengal has been determined for the purposes of assessment under the enactments relating to Indian income-tax. Section 8(1B), dealing with cases where the computation of the income derived from tea has not been computed for the purposes of assessment of income-tax under the enactments relating to Indian income-tax is relevant in this case. Section 8(1B) reads as follows : .

" (1B). Where the computation of the income derived from tea has not been computed for the purposes of assessment of income-tax under the enactments relating to Indian income-tax, or where such computation has been completed but the assessment under the enactments relating to Indian income-tax has been annulled or set aside under those enactments and no order of assessment under Section 25 has been made within six years from the end of the year in which this agricultural income was first assessable, the Agricultural Income-tax Officer shall, notwithstanding anything to the contrary contained in this Act, assess the agricultural income derived from tea in such manner and within such period as may be prescribed and shall determine the sum payable by the assessee on the basis of such assessment ;..." 31. The Agricultural Income-tax Officer has, therefore, to assess the agricultural income derived from tea and determine the sum payable by the assessee on the basis of such assessment, even in a case where no order of assessment has been made under the Indian Income-tax Act.

Section 21 prescribes various authorities for the purpose of agricultural income-tax. The West Bengal Agricultural Income-tax Officers, mentioned in Section 21(c) have been empowered to exercise the powers conferred and perform the duties imposed on; them by the Act and by such rules as may be prescribed in respect of such areas as the State Government may by notification determine under Section 21(5).

Chapter V of the Act deals with the machinery provisions of assessment.

Section 24 deals with the return of agricultural income to be filed by an assessee and Section 24A relates to self-assessment. Section 25 deals with assessment by the Agricultural Income-tax Officer.

Sub-sections (1), (3) and (3A) not being relevant to the facts of the case, are passed over. Section 25(5), which is relevant to the instant case, is reproduced below : " (5). If any person fails to make the return required by any notice given under Sub-section (2) of Section 24 and has not made a return or a revised return under Sub-section (5) of the same section or fails to comply with all the terms of a notice issued under Sub-section (4) of the same section or fails to produce before the Agricultural Income-tax Officer any order under the enactments relating to Indian income-tax or a certified copy thereof, which may be necessary under the provisions of this Act for the purpose of enabling any assessment to be made under Section 8, such officer shall make the assessment to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment." 32. Section 25(5), therefore, empowers the Agricultural Income-tax Officer to make a best judgment assessment in a case where a certified copy of the assessment order of the income-tax authorities is not produced before him at the time of hearing for assessment.

33. Section 26E provides for charging of interest in the case of nonpayment of advance tax at the time of regular assessment by the Agricultural Income-tax Officer and Section 32(1) provides for the imposition of penalty under certain specified circumstances. On completion of the assessment, the Agricultural Income-tax Officer will serve a notice of demand upon the assessee or other person liable to pay such tax or penalty or interest in the prescribed form specifying the sum so payable under Section 33. Section 34(1) provides for appeal against assessment of the Agricultural Income-tax Officer under Section 25 as also certain other orders passed by him under the various provisions of the Act and reads as follows : " 34. Appeal against assessment under this Act. -- (1) Any assessee objecting to the amount of total agricultural income or total world income assessed under Section 25 or Section 31 or the amount of loss computed under Section 26 or the amount of agricultural income-tax determined under Section 25 or Section 31 or denying his liability to be assessed under this Act or objecting to a refusal of an Agricultural Income-tax Officer to make a fresh assessment under Section 31 or objecting to any order under Section 30 or Section 32 made by an Agricultural Income-tax Officer or objecting to any order imposing any penalty by an Agricultural Income-tax Officer under Sub-section (i) of Section 45 or Sub-section (3) of Section 24A or objecting to refusal of an Agricultural Income-tax Officer to allow a claim to a refund under Section 47, 48 or 51 or the amount of the refund allowed by the Agricultural Income-tax Officer under any of those sections, may appeal to the Assistant Commissioner against the assessment or against such refusal or order ; Provided that no appeal shall lie against an assessment made under Section 25 unless an amount equal to fifty per cent, of the tax assessed under this Act has been deposited by the appellant ; Provided further that no appeal shall lie against an order under Sub-section (1) of Section 45 unless the agricultural income-tax has been paid. " 34. It may be seen that the first proviso to Section 34(1) envisages that no appeal shall lie against an assessment made under Section 25 unless an amount equal to 50 per cent, of the tax assessed under the Act has been deposited by the appellant and it is the vires of the same which is under challenge in the present case. Section 37(1) provides for revision by the Commissioner on his own motion or on an application by an assessee of an order passed by an officer subordinate to him after making such enquiry as he thinks fit. However, this power of the Commissioner for "revision vested in him in Section 37(1) is subject to a proviso that no application for revision shall lie unless an amount equal to 50 per cent, of the tax assessed under the Act has been deposited by the assessee. Further, clause (b) of Sub-section (4) of Section 37 stipulates that the Commissioner shall not revise any order in cases where an appeal against the order lies to the Assistant Commissioner but has not been made or the time within which such appeal may be made has not expired. That is to say, the Commissioner cannot exercise his powers of revision under this section against an order of assessment by the Agricultural Income-tax Officer since an appeal against the order lies to the Assistant Commissioner in the normal course. The Commissioner is empowered to entertain an application for revision of an order of assessment only after the time-limit of 30 days from the receipt of the notice of demand prescribed for filing an appeal has expired and subject to the proviso that an amount equal to 50 per cent, of the tax assessed has been deposited by the assessee.

35. It may be relevant at this stage to recapitulate how the provisions of law have been applied in the instant case. The applicant had filed a return showing an income of Rs. 1,10,360 on or about March 5, 1992, before respondent No. 4, the Agricultural Income-tax Officer, Jalpaiguri Range, under Section 24(5} of the Act for the period ended December 31, 1984, relating to the agricultural income-tax year 1985-86. However, he could not file a certified copy of the order of assessment under the Income-tax Act, 1961, for the purpose of assessment of agricultural income-tax in respect of the year 1985-86, as envisaged under Section 8(3) of the Act. Hence, respondent No. 4 proceeded to make an assessment to the best of his judgment as provided under Section 25(5) of the Act. The relevant portion of the order of assessment dated March 26, 1992, is reproduced below : In absence of certified copy of income-tax assessment order, the expenditure as shown in the balance-sheet is curtailed to the extent of Rs. 2,16,066 on estimate and to. the best of my judgment Issue demand notice and challan to pay by April 27, 1992. Also calculate the interest under section 26E(i).

36. It may be seen that in the computation of the taxable income, he has curtailed expenditure as shown in the balance-sheet to the extent of Rs. 2,16,066 on estimate but no reasons whatsoever have been recorded as to why he has done so. Adding back that figure to a net profit of Rs. 1,83,934 as shown in the balance-sheet, the total income was computed at Rs. 4 lakhs and the agricultural income as Rs. 2,40,000 after set off of 40 per cent, being business income. After set off towards losses of Rs. 67,476 in the years 1982-83 and 1983-84, the taxable income was assessed as Rs. 1,72,524, the tax imposed on the same being Rs. 1,19,042. While ,the law certainly entitles him under Section 25(5) to make an assessment to the best of his judgment, such best judgment assessment, as has been held in innumerable cases, has to have a proper basis and should be a reasoned order. He has mentioned that he has disallowed this claim in the absence of certified copy of income-tax assessment order, but has acted palpably arbitrarily in disallowing the claim of expenses and adding back the same to the net profit figures, without any explanation or basis of any sort. However, the appeal could not be entertained by the Assistant Commissioner (respondent No. 3) in view of the proviso stipulating payment of 50 per cent. of the assessed tax. Since 50 per cent, of the assessed tax had not been deposited by the applicant as envisaged in the proviso, respondent No. 3 who had no discretion in the matter whatsoever to waive or reduce the amount of such deposit in any way as prayed for by the applicant who had offered to deposit fifty per cent, of the admitted amount of tax, had to reject the appeal petition by his order dated December 17, 1992, as being inadmissible. No authority under the Act including the State Government has been vested with any discretion to relax this mandatory provision. The resultant situation is that there is no remedy under the Act against any arbitrary or unreasonable order of assessment of an Agricultural Income-tax Officer irrespective of its nature, character or legality unless the applicant is in a position to deposit 50 per cent, of such tax as may be decided upon unilaterally and arbitrarily by the Agricultural Income-tax Officer. In other words, an applicant is left with no remedy whatsoever except recourse to a writ petition in the High Court under Article 226. As such, there can be no escape from the conclusion that the proviso has rendered the right of appeal nugatory and the law, as has been enacted, is harsh, oppressive, unjust and violative of Article 14 of the Constitution. I hold, therefore, that the impugned proviso is arbitrary, unjust and oppressive and should be struck down as being violative of Article 14 of the Constitution.

37. In view of the foregoing, the application is allowed. The first proviso to Sub-section (1) of Section 34 of the Bengal Agricultural Income-tax Act, 1944, is declared to be ultra vires Article 14 of the Constitution of India and is, accordingly, struck down. The order dated December 17, 1992, passed by- respondent No. 3, namely, the Assistant Commissioner, Agricultural Income-tax, Jalpaiguri Circle, Jalpaiguri, is set aside and he is directed to entertain the appeal filed by the applicant and hear and dispose of the same on the merits without demanding deposit of 50 per cent. of the tax as assessed by the Agricultural Income-tax Officer, Jalpaiguri Range, being respondent No.4. In doing so, he should arrive at his independent judgment notwithstanding the observations in this judgment regarding the order of assessment dated March 26, 1992, passed by respondent No. 4, namely, the Agricultural Income-tax Officer, Jalpaiguri.

39. The application is allowed for the limited purpose of giving the applicants one more opportunity to proceed with the appeal filed by them on July 23, 1992, before respondent No. 3 against the order of assessment of agricultural income-tax made by respondent No. 4, Agricultural Income-tax Officer, Jalpaiguri Range, for the year 1985-86 on March 26, 1992. The applicants may deposit within two months from this date 50 per cent, of the assessed tax on the basis of the assessment made by respondent No. 4 on March 26, 1992, before respondent No. 3, Assistant Commissioner of Agricultural Income-tax, Jalpaiguri Circle. If the applicants deposit 50 per cent, of the assessed tax before respondent No. 3 within two months from this date, the order dated December 17, 1992, passed by respondent No. 3 rejecting the appeal against the aforesaid order of assessment should be recalled by respondent No. 3 and respondent No. 3 will thereafter proceed with the appeal and will dispose of it in accordance with law after giving an opportunity to the applicants of being heard. In case the applicants do not make deposit of 50 per cent. of the assessed tax within two months from this date before respondent No. 3, the order of rejection of the appeal as passed by respondent No. 3 on December 17, 1992, will stand.

40. The application under Section 8 of the West Bengal Taxation Tribunal Act 1987, is rejected in all other respects. Parties will bear their own costs of this case.


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