1952 (9) TMI 40 - HC - Income Tax

Summary

Issues Involved:
1. Interpretation of Section 6(1) of the U.P. Agricultural Income Tax Act.
2. Judicial or executive nature of the Board of Revenue's discretion under Section 6(1).
3. Application of mind by the Board of Revenue in considering the applications.
4. Relevance of revenue loss as a factor in the Board of Revenue's decision.
5. Constitutional validity of the proviso to Section 6(1) under Articles 14 and 19(1)(f) of the Constitution.

Detailed Analysis:

1. Interpretation of Section 6(1) of the U.P. Agricultural Income Tax Act:
The applicants contended that an assessee has the liberty to choose any method of computation of agricultural income each year, but cannot vary it within the same year. The court rejected this interpretation, stating that the proviso to Section 6(1) clearly restricts the assessee from changing the method of computation without the permission of the Board of Revenue once an option has been exercised. The court emphasized that the word "once" in the proviso is unqualified and does not support the applicants' interpretation. The court further noted that there is intrinsic evidence in the Act itself indicating that the variation of the method of computation within the same year is not contemplated.

2. Judicial or executive nature of the Board of Revenue's discretion under Section 6(1):
The applicants argued that the Board of Revenue's discretion under the proviso to Section 6(1) should be exercised judicially. The court disagreed, stating that the Board acts in its executive capacity when dealing with such matters. The usual procedures of judicial authorities are not prescribed for the Board in this context.

3. Application of mind by the Board of Revenue in considering the applications:
The applicants contended that the Board did not apply its mind in considering their applications and acted mechanically. The court found no merit in this argument, noting that the Senior Member of the Board of Revenue had the entire record before him, including the applications and office notes. The court presumed that the Senior Member gave due consideration to the materials before him and assented to the office suggestion to reject the applications. The court also noted that it is a well-recognized practice in government offices for an officer to merely initial an office note if he agrees with it, which indicates his assent.

4. Relevance of revenue loss as a factor in the Board of Revenue's decision:
The applicants argued that the consideration of revenue loss was irrelevant and vitiated the Board's decision. The court held that the consideration of revenue loss was not foreign to the scheme of the Act. The primary object of the U.P. Agricultural Income Tax Act is to impose a tax on agricultural income, and the Board of Revenue, in its administrative capacity, has to consider the effect of its decisions on state revenues. The court found that the Board acted within the spirit of the Act by taking into account the potential loss of revenue.

5. Constitutional validity of the proviso to Section 6(1) under Articles 14 and 19(1)(f) of the Constitution:
The applicants contended that the proviso to Section 6(1) violated Article 14 (equality before the law) and Article 19(1)(f) (right to acquire, hold, and dispose of property) of the Constitution. The court rejected these arguments, stating that the proviso does not infringe Article 14 as it does not confer an unregulated discretion on the Board of Revenue. The court also found no violation of Article 19(1)(f), noting that the tax was imposed according to law and the proviso was a standard provision for tax collection purposes.

Conclusion:
The court dismissed the applications, holding that the Board of Revenue had exercised its discretion reasonably and within its jurisdiction. The court found no grounds to interfere by means of a writ of mandamus or any other writ, as the Board's decision was not arbitrary or capricious and was made after due consideration of the relevant facts and materials. The court also upheld the constitutional validity of the proviso to Section 6(1) of the U.P. Agricultural Income Tax Act.