1988 (10) TMI 13 - HC - Income Tax

Summary

Issues Involved:
1. Effective Date of Tax Levy
2. Legislative Intent and Interpretation
3. Conduct of State Government in Litigation

Summary:

1. Effective Date of Tax Levy:
The crux of the argument presented by the petitioners was that the additional levy under the Amendment Act of 1987, which became effective from July 1, 1987, should only apply from the next financial year starting April 1, 1988. The court evaluated whether the levy could be effective from April 1, 1987, given the existing provisions of the amendment Act. The court concluded that the Schedule brought in by the Finance Act of 1987 should be employed for the computation of the plantation tax for the year 1987-88. The court emphasized that the assessing authority is bound to apply the rate relevant for that year as indicated by the amendment of the Schedule for the year 1987-88.

2. Legislative Intent and Interpretation:
The court examined the legislative intent behind the amendment, noting that the Government had a clear intention to raise revenue for the financial year 1987, as declared in the budget proposals and the preamble of the Act. The court referenced principles from various judicial dicta, emphasizing that the words of the statute should be given their ordinary meaning and that there is no room for any intendment or equity about a tax. The court also noted that the history of the enactment and the reasons which led to its implementation could be used as aids to construction. The court concluded that the amended rates are necessarily to be applied from the very commencement of the financial year 1987-88.

3. Conduct of State Government in Litigation:
The court expressed strong disapproval of the State Government's conduct in the case, noting the lack of effort to conserve its interests and the inadequate counter-affidavit filed by the State. The court highlighted the importance of finality in tax liability to contain and control litigation and criticized the State for not presenting a substantial defense. The court declined to award costs in the petitions due to the State's negligence and emphasized the need for the State to sort out its papers properly and keep its desk in order.

Conclusion:
The writ petitions were dismissed, and the court underscored the importance of legislative clarity and the responsibility of the State in handling substantial financial stakes. The court also highlighted the need for vigilance and accountability in governance, quoting Sidney Low and Burke to emphasize the importance of ministerial responsibility and the efficiency and integrity of ministers.