1960 (7) TMI 4 - SC - Income Tax

Whether the Additional Collector of Bahraich was not an authority competent by law to assess the agricultural income-tax under Act III of 1949? Held that - By the amending Act the Legislature has enacted in language which is clear and explicit that assessment proceedings held by an Additional Collector who is invested with the powers of a Collector under Act III of 1901 shall be deemed always to have been properly taken. This court is seized of an appeal from the order of the High Court quashing the assessment on the ground that the Additional Collector had no extra-territorial authority to assess agricultural income-tax. It is true that Act III of 1949 was amended after the High Court delivered its judgment ; but in dealing with this appeal we are bound to consider the amended law as it stands today (and which must be deemed to have so stood at all material times) and to give effect to it having regard to the clearly expressed intention of the Legislature in the amended provisions. Appeal allowed.

Summary

Issues:
Jurisdiction of Additional Collector to assess agricultural income-tax under the United Provinces Agricultural Income-tax Act (III of 1949); Validity of assessment by the Additional Collector in district Bahraich; Interpretation of the amending Act of 1956 and its retrospective application; Applicability of section 11 of the amending Act for review of judgments inconsistent with its provisions.

Analysis:
The case involved the jurisdiction of the Additional Collector in district Bahraich to assess agricultural income-tax under the United Provinces Agricultural Income-tax Act (III of 1949). The State Government had appointed the Additional Collector to exercise the powers of a Collector, including "extra-territorial" powers. The High Court initially quashed the assessment, stating the Additional Collector lacked the necessary jurisdiction. However, the amending Act of 1956 clarified that an Additional Collector could be deemed to have the powers of a Collector for assessment purposes, retroactively validating such assessments.

The Supreme Court considered the amended law in its decision, holding that the Additional Collector was competent to assess agricultural income-tax under the Act. The Court emphasized the legislative intent behind the amendment, which explicitly included Additional Collectors in the definition of "Collector" for assessment purposes. Therefore, the assessment made by the Additional Collector in the case was deemed valid under the amended provisions of the Act.

Regarding the applicability of section 11 of the amending Act for review of judgments inconsistent with its provisions, the Court clarified that a proceeding for review was not the only remedy available to challenge such judgments. The Court asserted that an appellate court must apply the law as it stands, even if retrospectively amended, and a provision for review does not limit the appellate court's authority to consider appeals in light of the amended law. Consequently, the Court allowed the appeal, citing the enactment of the statute after the High Court's judgment and directed no costs to be awarded.

In related appeals (Civil Appeals Nos. 307 and 308 of 1957), which raised similar issues, the Court followed the same reasoning as in the principal appeal. The Court allowed these appeals as well, setting aside the High Court's judgment without awarding costs. The judgments in all three appeals were thus overturned based on the amended provisions of the Act and the retrospective application of the amending Act of 1956.