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Validity of amended section 4(1)(b) of the Agricultural Income-tax Act as violative of article 14 of the Constitution. Analysis: The petitioner, a managing trustee of a religious and charitable trust, challenged the amended section 4(1)(b) of the Agricultural Income-tax Act, which restricted the exemption of agricultural income spent for religious and charitable purposes outside the State of Kerala. The petitioner argued that this exclusion was discriminatory and violated article 14 of the Constitution. The court examined the classification of income as spent within the State and as spent outside the State under the Act. It was noted that the Act applied only to income derived from land within the State and that the exemption under section 4(1)(b) was available only for income derived by the trust and spent within the State. The court emphasized that the classification must have a rational nexus to the object sought to be achieved by the statute, and in this case, the exemption aimed to benefit the trust within the State. Citing various Supreme Court decisions, the court reiterated that while article 14 forbids class legislation, reasonable classification for legislation purposes is permissible. The court highlighted that the Legislature has wide discretion in taxation matters and that the classification must be based on intelligible differentia with a rational nexus to the legislative objective. The court emphasized judicial deference to legislative judgment in economic regulations and taxation matters. Drawing parallels with a Supreme Court decision regarding the Income-tax Act, the court upheld the validity of section 4(1)(b) of the Agricultural Income-tax Act. It concluded that the classification made by the Act for the exemption of agricultural income spent within the State was based on intelligible differentia and aimed at benefiting both the trust and the economic development within the State. Therefore, the court found section 4(1)(b) of the Agricultural Income-tax Act to be valid and not in violation of article 14 of the Constitution. In conclusion, the court dismissed the original petition, upholding the validity of section 4(1)(b) of the Agricultural Income-tax Act.
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