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Issues: Validity of surcharge levied on agricultural income-tax pursuant to Karnataka Ordinance No. 13 of 1980; Interpretation of the effect of the Ordinance lapse on assessment orders; Validity of Circular No. 2/1985-86 directing no surcharge in pending assessments.
Analysis: The judgment by K. A. Swami J. addresses the validity of the surcharge imposed on agricultural income-tax under Karnataka Ordinance No. 13 of 1980. The petitioners argued that since the Ordinance had lapsed by the time assessment orders were issued, the assessing authority lacked the legal basis to levy the surcharge. However, a previous judgment highlighted that the Ordinance, despite lapsing, must be applied to matters governed by it, even after its expiration, emphasizing that the authority was justified in imposing the surcharge during the relevant assessment period. Regarding Circular No. 2/1985-86 issued by the Commissioner of Agricultural Income-tax, which directed no surcharge in pending assessments, the court found it inconsistent with the previous judgment. The court rejected the Commissioner's view that no surcharge should be levied in pending assessments post the Ordinance lapse. The judgment clarified that the surcharge remains applicable to the agricultural income-tax amount for the period when the Ordinance was in force, regardless of whether the assessment was completed during the Ordinance's validity or after its lapse. The court emphasized that the Circular's directive to not levy surcharge in pending assessments during the Ordinance's validity period was invalid and did not hold the force of law. The judgment reinforced that the initial validity of the Ordinance is not affected by its lapse and that the surcharge is still leviable on the agricultural income-tax amount for the relevant period. Consequently, the contention against the surcharge's authority based on the Circular was dismissed, leading to the rejection of the petitions seeking rule issuance. In conclusion, the court found no justification to grant the rule in the petitions, ultimately rejecting them. The High Court Government Pleader was allowed to file his appearance memo for the respondents within six weeks.
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