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Issues: Liability of appellants to pay road-cess, interpretation of Cess Act, definition of tenure-holder, tax liability - road-cess vs. income tax, profits derived from mela, applicability of road-cess on land used for a mela
In this judgment delivered by the High Court of Calcutta, the main issue was the liability of the appellants to pay road-cess. The appellants held a mokurari jama under the plaintiff and the proforma defendant for the right to hold a mela on certain land. The Collector fixed road-cess on the profits of the mela, which the plaintiff sought to recover from the defendants along with the rent due under the lease. The First Court disallowed the plaintiff's claim, but the Subordinate Judge allowed it, considering the defendants as tenure-holders under the Cess Act. The defendants argued that they should not be liable for both Income Tax and road-cess. The court analyzed the Income Tax Act, stating that profits from a mela cannot be considered income derived from agriculture and thus the defendants should pay Income Tax, not road-cess. Regarding the definition of tenure-holder under the Cess Act, the court noted that the defendants, although not holders of an estate or cultivating raiyats, held immovable property. The court deliberated on whether it was intended by the legislature to assess road-cess on land from which profits subject to Income Tax are derived, especially when such land is not used for agricultural purposes. The court emphasized that the profits of the mela were not derived from the soil of the lands but from shopkeepers, leading to a discussion on whether shops at the mela should be considered immovable property. The court referred to Rule 33 of the Cess Manual, which stated that profits from fairs or hats held on land were assessable with road-cess. However, the court found this rule to be ultra vires, as it did not align with the provisions of the Act. Ultimately, the court decreed the appeal in favor of the defendants, highlighting that the plaintiffs could no longer enforce the road-cess demand. The judgment provided a detailed analysis of the tax liabilities, the definition of tenure-holder, and the interpretation of the Cess Act concerning the liability for road-cess on profits derived from a mela held on certain land.
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