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M.O.A. Rahaman Sait and Another Vs. Commissioner of Agricultural Income-tax, Madras, and Another. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberWrit Petition Nos. 926, 927, 2578 and 2579 of 1972
Reported in[1978]111ITR226(Mad)
AppellantM.O.A. Rahaman Sait and Another
RespondentCommissioner of Agricultural Income-tax, Madras, and Another.
Excerpt:
- .....that it was under such confusion that by his order dated the 15th august, 1966, the income-tax officer granted permission to the two petitioners to compound the agricultural income-tax in respect of the assessment years 1966-67, 1968-69, even though the application made by each of them related to the assessment year 1966-67 only.on the 13th of may, 1966, another act (hereinafter referred to as 'the 1966 act') amending the 1955 act came into operation, section 10 whereof repealed section 34 of the 1958 act, so that persons owning more than 50 standard acres of land who were not given the benefit of composition under section 65 of the 1955 act, but were enjoying such a benefit under the said section 34 lost that benefit and it was on that account that the respondent passed the orders.....
Judgment:

KOSHAL J. - By this judgment I shall dispose of four petitions under article 226 of the Constitution of India, namely, Writ petitions No. 926, 927, 2578 and 2579 of 1972, in the first and last of which the petitioner is one M.O.A. Rahaman Sait while the other two have been filed by his brother, named, A.K.A. Rahaman Sait.

The facts leading to the four petitions may be stated in some detail. Each of the two petitioners owns an arecanut garden situated at Kotagiri Road, Mettupalayam, in Coimbatore District. On the 15th of April, 1966, the Agricultural Income-tax Officer, Coimbatore (hereafter referred to as 'the Income-tax Officer'), received from each petitioner an application requesting for composition of the agricultural income-tax due from him in respect of the assessment year 1966-67. The applications were accepted by the Income-tax Officer on the 15th of August, 1966, with the direction that the permission to compound thereby granted would enure also for the assessment years 1967-68 and 1968-69, subject to the provisions of subsections (7) to (10) of section 65 of Tamil Nadu Agricultural Income-tax Act, 1955 (hereinafter referred to as 'the 1955 Act'). No further development took place till 25th July, 1968, in which date the Commissioner of Agricultural Income-tax, Madras, who is the sole respondent before me, issued to each petitioner a notice under section 34 of the 1955 Act stating that his plantation covered 99.51 standard acres, that he was not eligible for composition and that in consequence the permission granted to him by the Income-tax Officer for composition on the 15th August, 1966, in respect of the assessment years 1966-67 and 1967-68 was proposed to be cancelled. Each of the petitioners challenged the notice received by him through a petition under article 226 of the Constitution of India which was dismissed. They then agitated the matter before the respondent himself, taking the stand that he had no jurisdiction to revise the order passed by the Income-tax Officer on the 15th August, 1966. Ultimately, the respondent set aside that order in so far as it related to the years 1966-67 and 1967-68. Besides, he issued separate notices to the two petitioners requiring them to file fresh returns in respect of the assessment year 1968-69 on the plea that according to the amendment made in the Act in the year 1968, the earlier composition granted for that year did not hold good.

In Writ petition No. 926 of 1972, M.O.A. Rahaman Sait challenges the order of the respondent dated 28th March, 1972, by which the permission to compound the tax granted to him for the assessment year 1966-67 and 1967-68 by the Income-tax Officer was set aside. The corresponding petition preferred to this court by his brother is Writ petition No. 927 of 1972. The prayer made in each of these two petitions is that the order of the respondent dated 28th March 1972 be quashed by a writ of certiorari. In each of the other two petitions the prayer made is that the proceedings initiated by the respondent for reassessment of the agricultural income-tax due from the petitioners, in supersession of the composition granted to them by the Income-tax Officer in respect of the assessment year 1968-69, be quashed by a similar writ.

Sub-sections (1) and (4) of section 65 of the 1955 Act, as originally enacted, may be reproduced here with advantage. They stated :

'(1) Any person who holds land not exceeding four times the exempted extent may apply to the prescribed officer for permission to compound the agricultural income-tax payable by him and to pay in lieu thereof a lump sum at the rate or rates specified in Part II of the Schedule....

(4) A permission granted under sub-section (3) shall, subject to the provisions of sub-section (1), be in force for a period of three years commencing from the financial year for which such permission is granted; and in respect of that period the provisions of this Act regarding submission of returns, accounts or other document, the assessment to agricultural income-tax or any other matter incidental thereto shall not apply in relation to the grantee :

Provided that the provisions of section 35 and 36 shall, so far as may be, apply in relation to the composition of agricultural income-tax under this section as they apply in relation to the assessment of agricultural income-tax under this Act.'

The exempted extent mentioned in sub-section (1) never exceeded 12 1/2 standard acres till the 13th of May, 1966, so that section 65 of the 1955 Act never had any application till then to the case of a person holding land in excess of 50 standard acres. However, in the year 1958 an Act amending the 1955 Act was passed and section 34 of the former (which is hereinafter called the 1958 Act) provided :

'34. (1) Notwithstanding anything contained in this Act, any person liable to pay agricultural income-tax under the principal Act as amended by this Act in respect of any agricultural income derived from any land other than land used for growing tea, coffee, rubber, cinchona or cardamom during the period of twelve months ending on the 31st day of March, 1958, may apply to the prescribed officer for permission to compound such agricultural income-tax and to pay in lieu thereof a lump sum at the rate or rates specified below :

Extent

Rate per standard acre

Rs

Np.

(1)

On the first 12 standard acres

NIL

(2)

On the Next 7 standard acres

4

50

(3)

On the next 10 standard acres

7

50

(4)

On the next 10 standard acres

10

00

(5)

On the next 10 standard acres

15

00

(6)

On the next 50 standard acres

17

50

(7)

On the next 50 standard acres

20

00

(8)

On the balance of standard acres

25

00

Provided that in the case of every company, the lump sum so payable shall be charged at the maximum rate on the whole of the total extent of the land held by that person.

(2) The Government may make rules as to the circumstances under which, and the manner in which, permission may be granted to persons permitted to compound the agricultural income-tax under sub-section (1).

(3) The provisions of section 35 and 36 of the principal Act shall, so far as may be, apply in relation to the composition of agricultural income-tax under this section, as they apply in relation to the assessment of agricultural income-tax under the principal Act.'

This section was amended from time to time so as to allow composition of the tax for every assessment year falling within the period ending with the 31st of March, 1968, and as it did not talk of any exempted extent of the land, it was applicable to every person who was liable to pay agricultural income-tax under the 1955 Act. However, permission to compound the tax under its provisions could be granted any for a period of 12 months at a time and such permission did not enure for any succeeding year; and in this respect the provisions of this section were materially different from those of sub-section (4) of section 65 of the 1955 Act. Nevertheless, under some confusion, this section was being applied by the income-tax authorities as if each permission granted under it enured for a period of three years as it did in the case of persons governed by section 65 of the 1955 Act; and it appears that it was under such confusion that by his order dated the 15th August, 1966, the Income-tax Officer granted permission to the two petitioners to compound the agricultural income-tax in respect of the assessment years 1966-67, 1968-69, even though the application made by each of them related to the assessment year 1966-67 only.

On the 13th of May, 1966, another Act (hereinafter referred to as 'the 1966 Act') amending the 1955 Act came into operation, section 10 whereof repealed section 34 of the 1958 Act, so that persons owning more than 50 standard acres of land who were not given the benefit of composition under section 65 of the 1955 Act, but were enjoying such a benefit under the said section 34 lost that benefit and it was on that account that the respondent passed the orders impugned in Writ Petitions Nos. 926 and 927 of 1972. It is the case of the petitioners, however, that their applications made to the Income-tax Officer on the 15th of April, 1966, were governed by section 34 of the 1958 Act notwithstanding its repeal on the 13th of May, 1966, when those applications were pending; and for this contention reliance is placed on section 8 of the Tamil Nadu General Clauses Act, 1891 (hereinafter called 'the General Act') which states :

'8. Where any Act, to which this Chapter applies, repeals any other enactment, then the repeal shall not -

(a) affect anything done or any offence committed, or any fine or penalty incurred or any proceedings begun before the commencement of the repealing Act; or

(b) revive anything not in force or existing at the time at which the repeal takes effect; or

(c) affect the previous operation of any enactment so repealed or anything duly done or suffered under any enactment so repealed; or

(d) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(e) affect any fine, penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or

(f) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, fine, penalty, forfeiture or punishment as aforesaid;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforce, and any such fine, penalty, forfeiture or punishment may be imposed, as if the repealing Act had not been passed.'

Clauses (a), (d) and (f) of this section, in my opinion, fully support the contention raised that on the 1st April, 1966, the assessment year 1966-67 commenced and the petitioners became entitled on that date to the benefit of section 34 of the 1958 Act, which was then fully in force. That entitlement is saved by clause (d) of section 8 of the General Clauses Act. Furthermore, clauses (a) and (f) of that section also afford them protection in that behalf for the-simple reason that on the 15th of April, 1966, they had initiated legal proceedings which were pending on the date when the 1966 Act came into force. The repeal of section 34 of the 1958 Act by the 1966 Act, therefore, remained ineffective in so far as those applications are concerned, and the respondent fell into an error in thinking that after the repeal the law governing those applications was the law in force after the repeal.

The question then arises as to what would be the fate of the said applications if they are disposed of according to the provisions of section 34 of the 1958 Act. the simple answer is that in respect of the assessment year 1966-67, the petitioners would be entitled to the permission for composition granted to them by the Income-tax Officer through his order dated 15th August, 1966. However, in respect of assessment years 1967-68 and 1968-69, section 34 would not govern those applications because that section contemplates a period of 12 months at a time in regard to which permission to compound could be granted. The mere fact that the income-tax authorities themselves were erroneously treating section 34 of the 1958 Act, as if it was subject to the provisions of sub-section (4) of section 65 of the 1955 Act, would not entitle the petitioners to have any relief in respect of the assessment years 1967-68 and 1968-69.

In the result, Writ Petitions Nos. 2578 and 2579 of 1972 fail and are dismissed. The other two petitions meet the same fate in respect of the assessment year 1967-68, but succeed and are accepted in so far as the assessment year 1966-67 is concerned, in regard to which the order dated 15th August, 1966, passed by the Income-tax Officer is restored and that of the respondent is set aside. It is made clear that the relief granted or refused hereby shall be affect any proceeding pending before the Agricultural income-tax authorities in any manner in so far as the same relates to the assessment years 1967-68 and 1968-69. In each of those four petitions the parties will bear their own costs.


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