9911796707
TMI Blog1941 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... earing and disposal. In view of the importance of the case to all persons interested in agriculture in this Province, this Special Bench has been constituted to hear the matter. In para 1 of the plaint, it is stated that the plaintiffs are zamindars holding a permanently settled estate. Then follow a number of paragraphs purporting to describe the position of zamindars before and after the Permanent Settlement Regulation (Regulation 1 of 1793). In para 6 it is said that the Permanent Settlement Regulation is an Act of Parliament, and in para 7 it is pleaded that as the Bihar Agricultural Income tax Act is repugnant to a Governor General's Act or a Parliamentary Statute and purports to alter the character of the permanent settlement the previous sanction of the Governor General was necessary to the introduction of the Bill in the Legislature and further that the Bill should have been reserved for signification of His Majesty's pleasure. In para 8 it is stated that the Bihar Agricultural Income tax Act directly infringes the rights granted by Regulation 1 of 1793 and as it repeals either directly or indirectly such regulation it is ultra vires. In para 9 it is pleaded that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation and plead that the plaintiffs were rightly called upon under the provisions of the Bihar Agricultural Income tax Act to render a return of their income for the previous year for the purposes of assessment to agricultural income tax. The defendants deny that the plaintiffs are entitled to any relief whatsoever. Certain other pleas were taken in the written statement, but as those pleas were not pressed before us it is unnecessary to set them out in this judgment. In the Court of the Subordinate Judge the following issues were framed : "1. Is the suit as framed maintainable ? 2. Is the suit bad for any want of or defect in the notice under Section 80, Civil Procedure Code ? 3. Does the impugned Acts require the previous sanctions of the Governor and the Governor General under Sections 299(3) and 108(2), Government of India Act, 1935, or should they have been reserved for the signification of His Majesty's pleasure under the said Act ? Was the previous sanction and approval of the Governor obtained ? 4. Were the impugned Acts illegal, inoperative, repugnant and ultra vires ? 5. Can the impugned Acts be questioned in the civil Court ? 6. Does Art. 41 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the powers given to the Provincial Legislature by the Government of India Act, 1935, and further because it does not tax all agricultural income as defined in the Government of India Act, 1935. (2) The said Act purports to deal with rights and privileges relating to land revenue and repeals or modifies the terms of the permanent settlement and as the previous sanction of the Governor was not obtained to the introduction of the Bill as required by Section 299, Government of India Act, the Act was not validly enacted and is not binding on the plaintiffs. Further, the Bill was not validly enacted as it was not reserved for the consideration of the Governor General as required by the Instrument of Instructions issued to the Governor of the Province. (3) The said Act purports to repeal or modify the Permanent Settlement Regulations and in particular Regulation 1 of 1793 which is an Act of Parliament or a Governor General's Act. The said Act was not validly enacted by reason of the fact that the previous sanction of the Governor General was not obtained for the introduction of the Bill as required by Section 108(2), Government of India Act, 1935. (4) Even assuming the said Act to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) agricultural, or (ii) the performance by a cultivator or receiver of rent in kind of any process ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rent in kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in sub clause (ii) ; (c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of rent in kind, of any land with respect to which, or the produce of which, any operation mentioned in sub clauses (ii) and (iii) of clause (b) is carried on : Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent in kind by reason of his connexion with the land, requires as a dwelling house, or as a storehouse, or other out building. " Section 110(b)(ii) prohibits a Provincial Legislature except in so far as is expressly permitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possibly make the latter Act ultra vires. In effect the Bihar Government are proposing to tax less than they are entitled to do. The greater must include the less, and if the Provincial Government are entitled to tax all agricultural income as defined in Section 2(1). Income tax Act, then they are clearly entitled to tax a part only of such income. It is impossible to hold that the omission to tax some forms of agricultural income could render the whole of the Bihar Act ultra vires and of no effect. In the Income tax Act definition the words used are : " Agricultural income ' means (a) any rent or revenue derived from land which is used for agricultural purposes. . . . . . . . ." In the Bihar Agricultural Income tax Act the words used are : " Agricultural income ' means any rent or income derived from land which is used for agricultural purposes. . . . . . . . ." It was argued that there was some difference in this part of the definition, though it was not stated with any clearness as to what that distinction was. In my view the word " revenue " in the Income tax Act is used to denote income or a revenue receipt as opposed to a capital receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h would not be agricultural income within the definition given in the Income tax Act. Under the Income tax Act income from revenue free agricultural land can only be regarded as " agricultural income " if the land is subject to a local rate assessed and collected by officers of the Crown as such, whereas under the Bihar Act income from revenue free agricultural land would be agricultural income if it was derived from land subject to a local rate or cess assessed and collected under the provisions of certain Local Acts, no matter how such local rate or cess was assessed or collected or by whom. In other words, in the definition contained in the Income tax Act the local rate must be assessed and collected by officers of the Crown as such, whereas under the Bihar Act income from revenue free agricultural land would be agricultural income if it was derived from land subject to a local rate or cess assessed and collected under the provisions of certain Local Acts, no matter how such local rate or cess was assessed or collected or by whom. In other words, in the definition contained in the Income tax Act the local rate must be assessed and collected by officers of the Crown as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the terms of this section it is clear that this duty devolves upon the Collector. Section 41 deals with payment of cess by holders of estates. Section 98 provides that every amount due or which may be due to the Collector under the provisions of the Act in respect of any arrears of cess may be realized by such Collector in the manner provided for the realisation of a public demand. Section 4 defines " Collector " and the term includes any person specially invested with the powers of a Collector for the purposes of this Act. By Section 100 the Board of Revenue may at anytime invest any person with the powers of a Collector under the Act such powers to be exercised by such person under the control or supervision of the Collector or independently of such control and supervision, as the Board of Revenue shall direct. Section 9 of the Act provides that the proceeds of the local cess in each district shall be paid into the district fund of the district and " district fund " is defined in Section 4 as meaning the fund formed under Section 52, Bengal Local Self Government Act of 1885. From these provisions it is clear that the rate of cess to be levied is fixed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting as such when performing their duties under the Act. What Section 100 of the Act empowers the Board of Revenue to do is to invest a person with the powers of a Collector under the Act. Once such a person is invested with such powers, he is, as far as those duties are concerned, a Collector, and he performs his duties not as a servant or agent of the District Boards but as a Collector. In my view even such a person invested by the Board of Revenue must be regarded as a Collector and he performs his duties as a Collector, that is, as an officer of the Crown as such. That being so, it appears to me that cess in this Province is assessed and collected by officers of the Crown as such and that being so there is no real difference between the two definitions as far as the assessment and collection of cess is concerned. Cess however is not payable in respect of any estate within the limits of municipality : See the present proviso to Section 2, Cess Act. Such lands however are assessed to local rates : See Section 98 and the following sections of the Bihar and Orissa Municipal Act (Act VII of 1922). These rates are not collected by the Collector but are collected by officers or serva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is payable by the tenure holder to the proprietor and by the raiyat to the proprietor or tenure holder as the case may be. Such cess, therefore, can be said to be assessed and collected under a Bengal Act, but it cannot be said to be cess collected by an officer of the Crown as such. That being so, it is contended that agricultural income of such tenure holders and raiyats is taxable under the Bihar Agricultural Income tax Act though such income is not within the definition given in the Government of India Act, 1935, and the Income tax Act. The income of a raiyat does not fall naturally within Section 2(a)(1), Bihar Agricultural Income tax Act, but rather falls within Section 2(a)(2)(i) of that Act. His income is derived from land by agricultural and clearly falls within the definitions given in both Acts. A tenure holder of revenue free land not himself cultivating lands does derive income from land used for agricultural upon which cess is payable by the proprietor and that cess is assessed and collected by the Collector who is an officer of the Crown, and, as I have already held, it is assessed and collected by the Collector as such. Therefore income of tenure holders of revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other parts of the Act were so inextricably mixed up with the insurance provisions of Part 3 that it was impossible to sever them The other case relied upon by the plaintiffs was Attorney General for British Columbia v. Attorney General for Canada (1973) A.C. 377, in which it was also held that the offending portion of the Natural Products Marketing Act, 1934, as amended by the Natural Products Marketing Act, 1935, was so inextricably interwoven with the other portions of the Act that the whole Act must be held to be ultra vires. In my view, however, it is possible in the present case to hold that the Bihar Agricultural Income tax Act, in so far as it taxes agricultural income falling within the definition given in the Income tax Act, is intra vires and only ultra vires in so far as it taxes income which falls outside the definition of " agricultural income " given in that Act. It is, in my judgment, open to this Court so to limit the definition given in the Bihar Act as to bring it within the competence of the local Legislature. In Macleod v. Attorney General for New South Wales (1891) A.C. 455, their Lordships of the Privy Council construed a definition of " bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulaiman, J., however held that the Act was ultra vires in so far as it purported to deal with interest on negotiable instruments but only to that extent. The Act applied to all debts payable by an agriculturist and " debt " was defined as meaning any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue Court or otherwise. The definition of the debt was wide enough to cover debts due on negotiable instruments, and Sulaiman, J., was of opinion that in so far as it dealt with such debts the Act was ultra vires but only to that extent. Varadachariar, J., though he held that the point did not strictly arise, observed at page 196 (of 3 F. L. J.) : " The argument of total invalidity need not be dealt with at any length, not only because it was not seriously pressed, but also because there is little force in it. If an enactment deals in part with matters beyond the competence of the Legislature which enacted it, it must be held to be wholly invalid only in cases where the valid and invalid provisions are inseparably intermixed or the innocent provisions are merely ancillary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe. For these reasons I am satisfied that the Bihar Agricultural Income tax Act, 1938, and the amending Act cannot be held to be ultra vires because the definition given in that Act does cover some income not falling within the definition of " agricultural income " in the Income tax Act. The next contention urged by the plaintiffs was that the Bihar Agricultural Income tax Act, 1938, was ultra vires in so far as it purported to tax income of zamindars holding permanently settled estates and in the alternative it was argued that if the Act is not ultra vires it should be held that on its true construction it did not tax income of zamindars holding permanently settled estates but only the income of zamindars holding estates temporarily settled. Shortly stated, the argument was that the rights and privileges of permanently settled zamindars are governed by the Permanent Settlement Regulation (Regulation 1 of 1793) which is an Act of Parliament or a Governor General's Act. By Section 108(2) no Provincial Legislature can enact legislation which repeals, amends or is repugnant to any provision of an Act of Parliament or any Governor General's Act without the previous s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the governing authority immediately before the permanent settlement in regard to ownership of the land or of some proprietary interest therein. The attention of their Lordships was called to the various views expressed in such works and documents as Field's 'Regulations of the Bengal Code', Phillip's 'Land Tenures of Lower Bengal' and Shore's Minutes. Their Lordships were also referred to certain reported decisions of the Courts. Their Lordships, however, are of opinion that there is here no occasion for any pronouncement by them upon the question of the exact nature of the rights and interests in relation to the land which existed in the governing authority before 1793, but that this appeal falls to be determined upon a consideration of the language of the Regulations and of the Indian Income tax Act, 1922." It will appear later that their Lordships of the Privy Council were called upon in Probhat Chandra Barua v. Emperor [1930] 58 Cal. 430 to consider much the same argument as that addressed to us in this case, and in my judgment it is unnecessary in this case to come to any definite conclusions as to the respective rights of the governing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby accordingly required forthwith to take the said matters into their serious consideration, and to adopt, take and pursue such methods for enquiring into the causes, foundation and truth of the said complaints, and for obtaining a full and perfect knowledge of the same and of all circumstances relating thereto, as the said Court of Directors shall think best adopted for that purpose; and thereupon, according to the circumstances of the respective cases of the said Rajas, zamindars, etc., to give orders and instructions to the several Governments and Presidencies in India, for effectually redressing, in such manner as shall be consistent with justice and the laws and customs of the country, all injuries and wrongs which the Rajas, zamindars, polygars, talukdars and other native land holders, may have sustained unjustly in the manner aforesaid, and for the settling and establishing upon principles of moderation and justice, according to the laws and constitution of India, the permanent rules by which their respective tributes, rents and services shall be in future rendered and paid to the said united Company'." Thereafter enquires and investigations followed and in 1790 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Art. 6 thereof as observed by Lord Russell in Probhat Chandra Barua v. Emperor [1930] 58 Cal. 430, at p. 444: "In regard to this part of the case, their Lordships desire to make this observation. The Bengal Regulations of 1793 are lengthy and numerous. In the course of the arguments before the Board attempts were made to support the respective arguments by a phrase picked from one regulation or a passage chosen from another, even though the particular regulation only purported to deal with some matter incidental to the permanent settlement. In the opinion of their Lordships, this part of the case falls to be determined primarily upon a consideration of the language of Regulation 1 of 1793. While bearing in mind the passages in other regulations to which their attention was drawn, their Lordships feel that the above mentioned regulation is the master regulation for the immediate purpose before the Board, and that its provisions constitute the overriding feature in the present case". In that case their Lordships were called upon to consider what was the precise assurance or undertaking given to the zamindars by the permanent settlement, and in the view of their Lordships ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the expiration of the term of the settlement no alteration will be made in the assessment which they have respectively engaged to pay, but that they, and their heirs and lawful successors, will be allowed to hold their estates at such assessment for ever. (5) Article 4. The lands of some zamindars, independent talukdars and other actual proprietors of land having been held khas or let in farm, in consequence of their refusing to pay the assessment required of them under the regulations above mentioned, the Governor General in Council now notifies to the zamindars, independent talukdars and other actual proprietors of land whose lands are held khas, that they shall be restored to the management of their lands upon their agreeing to the payment of the assessment which has been or may be required of them, in conformity to the regulations above mentioned, and that no alteration shall afterwards be made in that assessment, but that they, and their heirs and lawful successors, shall be permitted to hold their respective estates at such assessment for ever; and he declares to the zamindars, independent talukdars and other actual proprietors of land, whose lands have been let in farm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country. The Governor General in Council trusts that the proprietors of land, sensible of the benefits conferred upon them by the public assessment being fixed for ever, will exert themselves in the cultivation of their lands under the certainty that they will enjoy exclusively the fruits of their own good management and industry, and that no demand will ever be made upon them, or their heirs or successors, by the present or any future Government, for an augmentation of the public assessment in consequence of the improvement of their respective estates." It was contended that this regulation contains a promise, undertaking or assurance that the public demand would never be increased. According to the plaintiffs, this public demand was in the nature of a tax, and as the agricultural income tax is a tax on such profits, the passing of the Bihar Agricultural Income tax Act is a breach of the assurance or undertaking given by Lord Cornwallis and is an attempt to repeal or modify the provisions of the Permanent Settlement Regulation. It is true that the amount of the jama fixed at the time of the permanent settlement was fixed after a consideration of the profits or income then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income tax Act, whereas Mukerji and Suhrawardy, JJ., took a different view. On appeal to His Majesty in Council their Lordships held that while the Bengal Regulations contained assurances against any claim to an increase of the jama, based on an increase of the zamindari income, they contained no promise that zamindar should in respect of the income which he derived from the zamindari be exempted from liability to any future general scheme of property taxation, or that the income of a zamindari should not be subjected with other incomes to any future general taxation of incomes. Accordingly, they held that under the income tax Act, 1922, the zamindar of a permanently settled estate was assessable to tax under the Act in respect of income, profits and gains derived from his zamindari, subject to the exemptions in Section 4, sub section (3), of the Act (agricultural income), and the assessment should be computed after making proper allowance under Section 12, sub section (2), in respect of the jama assessed and paid. In this case their Lordships had to consider the effect of the Permanent Settlement Regulation (Regulation 1 of 1793) which they pointed out was the master regulation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of the day surrendered their right to levy a general tax upon incomes of all persons irrespective of the fact whether they are zamindars with whom the permanent settlement was concluded or not'." It is to be observed that a very similar view as to the true meaning of Regulation 1 of 1793 had been expressed in earlier cases. In Freeman v. Fairlie [1837] 1 M.I.A. 305, the Lord Chancellor at page 342 observes: "I think it is to be collected from those Regulations that the proprietors of land in India had an absolute ownership and dominion of the soil; that the soil was not vested generally in the Sovereign; that the proprietors did not hold at the will of the Sovereign; but held the property as their own with the power of disposing of it absolutely; and if not disposed of, that it descended to their families. It is liable, indeed, to a tribute to the Government but it appears that the tribute was not fixed but was increased at the arbitrary will of the Government; and it appears further that if the tribute was not paid Government had the power of taking possession of the lands for the purpose of obtaining payment. Still notwithstanding these circumstances and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled estates subject to the exemptions provided by the Legislature was liable to assessment to income tax. In their judgment their Lordships draw no distinction whatsoever between the two classes of zamindari income and hold that a tax on zamindari income is no breach of any undertaking or assurance contained in the Permanent Settlement Regulation. But for the express exemption of agricultural income contained in Section 4(2). Income tax Act, the case would have applied with equal force to agricultural income. Counsel for the plaintiffs was compelled to concede that if the exemption of agricultural income from taxation in the Income tax Act was removed Probhat Chandra Barua's case [1930] 58 Cal. 430 would apply, and we would be bound to hold that agricultural as well as non agricultural income would be taxable. It was contended, however, that different principle applies when an Act was passed which purported to tax agricultural income only. It was argued that as the Bihar Act taxes agricultural income only, it imposes not a tax on income but a tax on land in the nature of a public demand as that expression is used in the Permanent Settlement Regulations. It was said that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amindars would be immune from any general scheme of property taxation or would not be liable with other citizens to a general tax on income. It is urged that the Bihar Agricultural Income tax Act imposes a tax on the assessees in their capacity as zamindars and not as members of the public. The tax, it is said, is a tax on a particular class of persons and is in short a zamindar's tax. As it is specifically directed at the zamindars the principles of Barua's case [1930] 58 Cal. 430 cannot apply, and the tax must be regarded as a breach of the assurance contained in the Permanent Settlement Regulations. It is clear however that the tax imposed by the Bihar Agricultural Income tax Act is not a tax on zamindars only. It imposes a tax on income derived from lands used for agriculture and from agriculture. Tenure holders and raiyats are liable to taxation just as much as zamindars, and zamindars of non permanently settled areas are in the same position as zamindars holding permanently settled estate. The Act applies generally to persons deriving income from agriculture and lands used for agriculture. It does not create a special tax upon the income of permanently settled zamind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, Government of India Act. Paragraph 18 of the Instrument of Instructions to Governors requires a Governor to reserve for consideration of the Governor General any Bill which would repeal or be repugnant to any provision of law in British India or any Bill which would alter the character of the permanent settlement. It is conceded that the Governor of this Province did not reserve this Bill for the consideration of Governor General; but even assuming that the Bill does alter the character of the permanent settlement, such failure to reserve the Bill for consideration would not make the present Act invalid. The Instrument of Instructions to Governor was issued under the provisions of Section 53, Government of India Act, and sub section (2) of that section provides that "the validity of anything done by the Governor of a Province shall not be called in question on the ground that it was done otherwise than in accordance with any Instrument of Instructions issued to him." There is no provision in the Government of India Act itself requiring such a Bill to be reserved for the consideration of the Governor General, and that being so the Act cannot be held to be invalid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of Parliament affecting the whole of British India and that such sanction is not necessary if the Act of Parliament applied to a Province of some of the Provinces only in British India. I do not find it necessary to decide this question because I am unable to hold that Regulation 1 of 1793 is an Act of Parliament. "Act of Parliament" is not defined in the Government of India Act, and Regulation 1 of 1793 cannot be said to have been enacted in the usual manner in which an Act of Parliament is passed. In the ordinary meaning of the expression, an "Act of Parliament" is an Act which has been passed by the House of Commons, the House of Lords and assented to by the King. Regulation 1 of 1793 was an enactment of the Governor General in Council in India and was never before Parliament in England. It is clear, however, that this Regulation together with the other Permanent Settlement Regulations were enacted pursuant to the provisions and directions contained in Section 39. Pitt's India Act of 1784 (24 Geo. III, C. XXV). That section, which I have earlier in this judgment quoted at length, required the authorities in India to give orders "for settling and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the power was given not only to legislate for the settlement at Fort William but also other factories and places subordinate or to be subordinate thereto. It may be that this English Act did not empower the Governor General to enact the Permanent Settlement Regulations, and such appears to be the view of many authors of works on the Indian Constitution. It must be remembered however, that at this time the East India Company were de facto sovereign if not de jure. It has been said that the Company exercised sovereign powers in trust for the Crown. Be that as it may, they were in fact the sovereign of the territories affected by the permanent settlement and as such undoubtedly claimed the right to legislate for such territory and its inhabitants. It appears to me that the Marquis Cornwallis must have enacted these regulations by virtue of the powers of legislate given to or assumed by the Governor General in Council, and that being so, it cannot be said that the Permanent Settlement Regulation (1 of 1793) is in any sense an Act of Parliament. The plaintiffs, however, contended that the Governor General in Council has no such power to legislate as to enable him to enact Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a Governor General's Act, and reliance was placed on Section 108(2)(b), Government of India Act. In my view, the expression "Governor General's Act" in Section 108(2)(b) refers to Acts which are contemplated in Section 44, Government of India Act, 1935, that is, to Acts enacted by the Governor General after the Government of India Act came into force. The Permanent Settlement Regulation was in no sense an Act of the Governor General but was an Act of the then Governor General in Council. That being so, Section 108(2)(b), Government of India Act, can in no way render the legislation invalid. Lastly, it was contended that assuming that the provisions of the Bihar Agricultural Income tax Act are repugnant to Regulation 1 of 1793 and assuming further that the Bihar Act was validly enacted the latter Act on its true construction should not be held to repeal or affect in any way the provision of Regulation 1 of 1793. It was argued that the Bihar Agricultural Income tax Act is a general Act, whereas Regulation 1 of 1793 is a special Act dealing with permanently settled estates. On a true construction of the Bihar Act, it was contended that this Court should hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid down by Lord Selborne in Seward v. Veracruz [1885] 10 A.C. 59. He observed: "Now if anything be certain it is this, that where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of particular intention to do so." Counsel for the plaintiffs also relied on Associated Newspapers Ltd. v. Corporation of London (No. 2) [1961] 2 A.C. 429. In that case the occupiers of certain hereditaments situate in the City of London and forming part of the area reclaimed from the river Thames, were rated to so much of the general rate levied under the City of London (Union of Parishes) Act, 1907, as represented the consolidated rate and the police rate, which was imposed by the City of London Police Act, 1939. The land had been reclaimed under the provisions of 7 Geo. III, C. XXXVII and under Section 51 of that Act owners of such reclaimed lands were to be "free from all taxes and assessments whatsoever. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was permanently settled or not. A subsequent general Act will repeal the provisions of an earlier special Act if the provisions of the subsequent Act are clear and unambiguous and clearly apply to the matters dealt with by the earlier special legislation. In the present case all agricultural income is made taxable without distinction, and that being so, any protection afforded to agricultural income by any earlier Act is repealed by the present Act. The view which I have expressed is in accordance with the view expressed by Rankin, J., in Emperor v. Probhat Chandra Barua [1924] 51 Cal. 504, and by the majority of the Full Bench of the Calcutta High Court in Emperor v. Probhat Chandra Barua [1927] 54 Cal. 863. As I have stated however the point does not really arise in this case. For the reasons which I have given, I am satisfied that the plaintiffs are not entitled to the relief claimed, and would dismiss their suit with costs. The questions as to whether the Bihar Agricultural Income tax Act is ultra vires the powers of the Provincial Legislature or is ultra vires in so far as it purports to tax agricultural income of permanently settled zamindars involved substantial points of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Clause (3), Government of India Act, provides that "subject to the two preceding sub sections the Provincial Legislature has, and the Federal Legislature has not, power to make laws for a Province or any part thereof with respect to any of the matters enumerated in List II in the said Schedule (hereinafter called the "Provincial Legislative List.")" As agricultural income is item 41 of the Provincial List otherwise called List II the Provincial Legislature of Bihar purporting to act under this section enacted what is known as the Bihar Agricultural Income tax Act in 1938 and some time later it passed another small Act slightly amending the provisions of the former Act. The Bihar Act VII of 1938 which is the main Act, received the assent of the Governor of Bihar on 20th August 1938 and was published in the Bihar Gazette of 12th October 1938. Section 2 of the Act defines agricultural income and Section 3 provides that the agricultural income tax at the rate or rates specified in the schedule to the Act shall be charged for each financial year in accordance with and subject to the provisions of the Act on the total agricultural income of the previous year, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s but applies to such agricultural income only as does not arise out of such estates. For the purpose of dealing with the first point it is necessary to refer to Section 311, Clause (2), and Section 141(1), Government of India Act, respectively. In Section 311(2) the expression "agricultural income" is defined as follows: "Agricultural income means agricultural income as defined for the purposes of the enactments relating to Indian income tax." Section 141(1) provides that no Bill or amendment varying the meaning of the expression "agricultural income" as defined above shall be introduced or moved in either Chamber of the Federal Legislature except with the previous sanction of the Governor General in his discretion. Now in order to appreciate the argument which was advanced before us it will be useful to set out the definition of "agricultural income" as given in the Income tax Act side by side with the definition of that expression as given in the Bihar Agricultural Income tax Act: Section 2(1), Income tax Act: Section 2(a), Bihar "Agricultural income" means: (a) Agricultural Income tax any rent or revenue derived from land Act: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiver of rent, etc., has been wholly omitted in the Bihar Act; secondly, clause (a), Income tax Act, is not couched exactly in the same terms as the latter provision. It is quite clear that as the result of the omission of clause (c), the definition given in the Bihar Act is somewhat narrower than the definition given in the Income tax Act, but in my opinion this fact by itself will not make the Act ultra vires. If it is assumed that the Bihar Legislature, having regard to the terms of the Government of India Act, is competent to levy tax on income derived from land as well as buildings of certain description it is clearly competent to tax income from land only for the present it being open to it to tax the income from buildings referred to in clause (c), Income tax Act if and when it chooses to do so in future. The Legislature has therefore in no way exceeded its power and I am not prepared to hold that it has contravened the provisions of the Government of India Act by merely adopting a definition which is narrower than the definition given in that Act. The second contention however is a more serious one, because the substance of that contention is that clause (i), Bihar Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and of Provincial public works." Section 5 of the Act provides that from the commencement of the Act all immovable properties in any district shall be liable to the payment of a local cess. The other provisions show that the cess is to be levied on lands as well as on mines, railway and other immovable property. As we are concerned with the cess levied on land only in the present case, it will be necessary to refer to some of the provisions relating to this subject. Mr. P.R. Das, who appears on behalf of the plaintiffs, relies upon Sections 9 and 38 of the Act in support of his contention that "cess" is not assessed by officers of the Crown but by the District Board. Section 9 provides that the proceeds of local cess in each district shall be paid into the local funds of the district and Section 38 provides that the cess shall be assessed and levied at such rate as may be determined for such year by the District Board. This last provision seems at the first sight to support the contention of Mr. Das, but when the other provisions of the Act are taken into consideration it becomes manifest that the authority which assesses the cess is not the District Board but the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superintendence and management of all light houses and beacons in England were vested not by virtue of the Act constituted servants of the Crown. In the latter case it was held that a debt due to the Metropolitan Meat Industry Board who were entrusted with the maintenance and control of the slaughter house and meat markets in Sydney and adjoining districts was not a debt due to the Crown. In my judgment both the cases relied on by Mr. Das are distinguishable and the cess payable under the Cess Act must be held to be assessed as well as collected by officer of the Crown. The Corporation of Trinity House was, as pointed out in the case relied on by Mr. Das, nothing more than an amalgamation by the authority of the State of a vast number of bodies having general authority over the light houses and beacons throughout the country for the general convenience. Thus, in view of its nature and origin the Corporation of Trinity House could not be regarded as an emanation from the Crown. Similarly, the Meat Industry Board could not be regarded as a representative of the Crown, because the powers conferred upon it were to be exercised at its own discretion and without consulting the direct re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot;income" under the Income tax Act. It has not been pointed out to us that there are in fact any such estates in Bihar, but assuming that there may be such estates we have still to consider whether that fact alone will make the whole Act ultra vires. We must remember that one of the objects of defining agricultural income in the Government of India Act was to ensure that that expression may not be differently understood by the Central and provincial authorities. Therefore it would be going too far to say that the framers of the Bihar Act had not power to introduce even verbal changes in the definition of agricultural income as adopted in the Government of India Act. All that they were required to guard against was that there was no change in the meaning or scope of the expression "agricultural income" and the definition in the Bihar Act was not wider than that to be found in the Income tax Act, If however the definition is found to be wider, it does not, in my judgment, necessarily follow that the whole Act thereby becomes ultra vires. We have on this point for our guidance a number of authoritative pronouncements which have laid down that if a part of an Act can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otably Section 9 in part I, and the whole of part 2, are within the competence of Parliament......... There appears to be two answers. In the first place, it appears to their Lordships that the whole texture of the Act is inextricably interwoven, and that neither Section 9 nor part 2 can be contemplated as existing independently of the provisions as to the creation of Board and the regulation of produces.........In the second place, both the Dominion and the British Columbia in their cases filed on this appeal assert that the sections now said to be severable are incidental and ancillary to the main legislation. Their Lordships are of opinion that this is true, and that as the main legislation is invalid as being in pith and substance an encroachment upon the Provincial rights the sections referred to most fail with it as being in part nearly ancillary to it." In the second case another Act was held to be ultra vires of the Dominion Parliament of Canada on similar grounds, it being held that in pith and substance the Act was an encroachment upon the Provincial field and that part of the Act which did not encroach were so inextricably mixed up with the offending provisions, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e estate is revenue free, then unless the estate is situated within a municipality, the zamindar must pay the cess for all the lands of the estate including those in possession of the tenure holders and raiyats under him. The mere fact that the tenure holders and raiyats pay cess into the hands of the zamindar does not alter the position. What we have to see is whether the land which they hold is subject to cess or not. In my opinion therefore the argument that tenure holders and raiyats cannot be taxed under the Act is untenable. The point, however, is not material, because the plaintiffs are neither tenure holders nor raiyats but are admittedly the proprietors of a revenue paying estate. The second point urged on behalf of the plaintiffs was that the Agricultural Income tax Act, in so far as it affects the permanently settled estates, is ultra vires of the Bihar Legislature, because that Legislature had no power to pass an Act inconsistent with the Permanent Settlement Regulation without following the procedure laid down by the Government of India Act. In urging this point Mr. P.R. Das, counsel for the plaintiffs, read out to us extracts from certain despatches which bad passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) where the previous sanction or recommendation required was that of the Governor General, either by the Governor General or by His Majesty. It is however contended that in the present case the subsequent assent of the Governor does not cure the defect, because the Permanent Settlement Regulation was an Act of Parliament and therefore required at least the assent of the Governor General under Section 109, clause (a), after the measure bad been enacted. The first question which arises for consideration is whether the agricultural Income tax Act in any way affects the Permanent Settlement Regulation or, as Mr. Das puts it, whether the imposition of the tax under the Act amounts to an augmentation of the jama. In my opinion this is the most important question in the case, because if it is answered in the negative no further question arises. I am also of the opinion that it has to be answered in the negative, because it is also answered by the Privy Council in Probhat Chandra Barua v. Emperor [1930] 58 Cal. 430, which must be regarded as the last word on the subject and which I accordingly propose to discuss at some length. It appears that prior to 1926 conflicting views had been exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent or any future Government, for an augmentation of the public assessment, in consequence of the improvement of their respective estates." His Lordship having reproduced this sentence proceeded to paraphrase it in these words: "You have in the past been liable to have the amount of the jama increased according as the actual produce of the estate increased; to enable the Government to obtain this you have been subjected to frequent investigations to ascertain the actual produce and you have even been deprived of the management of your estate. All this shall cease. You shall have fixity of payment and fixity of tenure. If you improve the revenue of your zamindari you shall enjoy the fruits of your improvements without fear of the Government claiming that, because the revenue produced by the estate has increased, the payment you make to Government as a condition of holding that estate shall be increased also." His Lordship then summarised his conclusions thus: "In their Lordships' opinion, while the regulations contain assurances against any claim to an increase of the jama, based on an increase of the zamindari income, they contain no promise that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round rent for land used as brickfields, fees received from tying of boats against the assessee's land, fees received from cart stands", etc. His contention was that their Lordships of the Privy Council intended to draw a distinction between zamindari income by which they meant agricultural income and income derived by a zamindar from his zamindari which according to him was a wider expression including non agricultural income. In my opinion, however, the two expressions have the same meaning and I do not agree with his contention that their Lordships intended to draw any distinction between them. Their Lordships however did recognize the distinction between agricultural income and other income derived from zamindari, because as was pointed by them, though in Section 4(3). Income tax Act, 1922, which enumerates the incomes to which the Act shall not apply, agricultural income is included, the wider expression "income derived from a zamindari" is not included in the Section. The decision of the Privy Council, in my opinion is fully applicable to this case, because the chief point to be decided in Barua's case was the same as in this case and the argument for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed limit. The standard of the assessment varies according to the nature of the source from which taxable income is derived. That is all." According to Mr. Das, this passage supports the view that an income tax in the true sense of the term must bear no reference to the source from which the income is derived and the moment there is a reference to the source, it ceases to be an income tax because in the present case the source of the alleged income is land, so it is land tax. The argument is a novel one, to say the least about it, and I have to deal with it only in deference to Mr. Das and because he has asked us to record our opinion about it. In my judgment all that Lord Macnaghten wished to emphasize was that though income may be derived from different sources, the income tax was one tax and not a collection of taxes in the sense that in every case you have to tax income only and nothing else which does not answer the description of income. He never meant to suggest that an Act which purports to tax income should not refer to the sources of income or as soon as there is a reference to the source the tax would cease to be an income tax. In the Income tax Act, no less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom the settlement should be made and the amount of assessment to be fixed on the land. A keen controversy then arose as to whether the zamindars had been treated as proprietors of the soil or not under the Moghul rule. Mr. Shore who subsequently became Lord Teignmouth quoted in his Minute of 1788 the common expression of the people, which according to him from its universality was proverbial,' that the land belongs to the zamindar and the rent to the King.' This view was supported by two Indian Experts, Ghulam Husain the author of "Sairul Mutakhrine" and Roy Royan in their answer to the questions put to them: See Harrington's Analysis, Vol. III. p. 328. The answer of the former to the twentyninth question which asked why the King purchased lands since he was the lord of the country was 'The Emperor is proprietor of the revenue issuing out of the territory under his authority; but he is not the proprietor of the soil.' On the other hand, Mr. Grant maintained that it was the fundamental principle in all the native estates of Asia 'that the Sovereign is sole universal proprietory lord of the land; and the ryots, who are husbandmen or peasantry, hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Regulations passed on 18th September and 25th November 1789 and 10th February 1790, 'It was notified to the proprietors of the land on behalf of whom the settlement might be concluded that the jama assessed upon the lands under these Regulations would be continued after the expiration of the tenures and remain unalterable for ever, provided such continuance should meet with the approbation of the Hon'ble Court of Directors for the affairs of the East India Company and not otherwise'". In the same judgment I also quoted at p. 187 the following observations of Lord Parker in Ranjit Singh v. Kali Dassi Debi [1917] 44 Cat. 841. "Passing to the settlement of 1793 it appears to their Lordships to be beyond controversy that whatever doubts be entertainer as to whether before the English occupation the zamindars had any proprietary interest in the lands comprised within their respective districts, the settlement itself recognizes and proceeds on the footing that they are the actual proprietors of the land for which they undertook to pay the Government revenue. The settlement is expressly made with zamindars, independent taluqdars and other actual proprietors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cornwallis and the Court of Directors prior to the enactment of the Permanent Settlement Regulation. In one of these despatches, Lord Cornwallis is reported to have written as follows: "We think this is an appropriate opportunity to observe that if at any future period the public exigencies should require an addition to your resources, you must look for this addition in the increase of the general wealth, and commerce of the country and not in the augmentation of the tax of the land". Similar expressions were used in regard to "jama" by the Court of Directors as well as other contemporary writers on the subject one of whom Colonel Wilks called it "a duty, tax or quit rent." It must also be conceded that the word "tax" would not be an inappropriate description of jama, if it is assumed that the zamidar was a proprietor of the soil. If he was a proprietor of the soil, he was entitled to retain the entire produce of the soil and if the Government took from him any part of the produce that was prima facie in the nature of a tax. At the same time, if one were to examine the matter historically, ore might feel inclined to doubt whether "tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case falls under Section 108(2) read with Section 109(1)(2), for otherwise the subsequent assent of the Governor is sufficient to validate the Act. The plaintiff, as I have already said, relied in this connexion on Sections 108(2) and 299(3) and therefore if, as Mr. Das contends, the Permanent Settlement Regulation 1 of 1793 is to be regarded as an Act of Parliament, the Act should have been introduced into the legislature with the previous sanction of the Governor General or it should have at least received the assent of the Governor General or His Majesty. Now, I must frankly confess that I find it difficult to hold that Regulation 1 of 1793 was an Act of Parliament. This regulation was never considered by the two Houses of Parliament nor did it receive the assent of His Majesty the King. It was enacted in India by the Governor General, there being nothing in its preamble or anywhere else to show that it was enacted under any authority delegated to the Governor General by the British Parliament. Mr. Das contends that it became an Act of Parliament, because it was enacted in obedience to Pitt's India Act of 1784, but, in my opinion, there is no warrant for such a conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutional history of India relating to the period during which the regulation was passed but none of the writers has said that it was an Act of Parliament. Mr. Das also relied on Willingale v. Noris [1909] 1 K.B. 57 and Powell v. Appollo Candle Company [1885] 10 A.C. 282 in support of his contention, but in my opinion these cases have very little bearing on the question before us. In the first of these cases it was held that where a statute gives power to an authority to make regulations, a breach of the regulations so made is an offence against the provisions of the statute. The point which arose in that case was this: Under Section 4, London Hackney Carriages Act, 1850, the then Commissioners of Police were authorized to make regulations in regard to the boundaries of standings for hackney carriages and the number of carriages to be allotted on a standing and certain other matters. They did make certain regulations in pursuance of the authority conferred upon them by the Act and one of these regulations being broken, it was held that the breach of regulations made under the authority of the statute was a breach of the statute itself. In the second case it was held that certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature yet if the Act is construed, according to certain well recognized principles, it must be held that it cannot affect the permanently settled areas. The principle of construction upon which Mr. Das relied is that if there is an earlier statute on a special subject and also a subsequent enactment of a general nature the Court will not hold that the earlier and the special legislation has been indirectly repealed or altered merely by force of the general words used in the subsequent legislation without any indication of a particular intention to do so: See Seward v. Vera Cruz [1885] 10 A.C. 59 at p. 69. This principle was applied by Mr. Das to the present case in the following manner. According to Mr. Das, Regulation 1 of 1793 which was an earlier and special legislation contained a promise that there shall be no further tax on the income of estate of which the jama had been fixed (permanently settled estates). Then followed a subsequent general Act which purports to tax agricultural income. As this Act does not use specific words to show that the Permanent Settlement Regulation was intended to be repealed, the two statutes must be read together as if they were quite consistent w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese imposts on the ground that the new taxation constituted a breach of the permanent settlement, but the Government met these complaints not by exempting permanently settled estates as such from income tax but by exempting all agricultural income whether the lands were permanently settled or not. From this brief history of the income tax law, it appears that the Central Government did tax agricultural income when it wanted to do so but for many years past for certain reasons of policy such income was exempted from taxation. Then came the Government of India Act which expressly authorized the Province to tax agricultural income the authority so conferred being as unqualified as the exemption given in regard to agricultural income under the Income tax Act. Why should not then the Bihar Agricultural Income tax Act be taken to be a repeal of the earlier enactment, because the language which is used in this Act is universal and comprehensive. The Act purports to tax "the total agricultural income of every person" (Section 2) and Section 4 recites in express terms the Act shall apply to all agricultural income derived from land situated in the Province of Bihar. There is noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goes beyond the terms of the definition given in the Government of India Act in regard to such revenue free estates as lie within the limits of a municipality. We do not definitely know whether there are any such estates in Bihar and if there are, what is the total number of such estates; but assuming that such estates do exist, all that can be said is that such estates cannot be taxed and the Act is ultra vires in so far as it purports to tax them. (2) That there is no declaration or promise in the Permanent Settlement Regulation that the zamindars will not be liable to pay income tax like the other receivers of income and accordingly the Bihar Act is neither repugnant to nor purports to repeal the Permanent Settlement Regulation. (3) That the Permanent Settlement Regulation is not an Act of Parliament and can be repealed by the Legislature of the Province or Provinces affected by it, provided that the procedure set out in the Government of India Act is followed. In the present case the Act cannot be questioned as the Governor has given his assent to it after it was passed. (4) That the Agricultural Income tax Act purports to tax all lands and estates permanently settled or otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned advocate for for both sides agreed that the relevant facts, which are necessary to decide the suit, are not denied by either side including the facts relating to the validity of the notice under Section 80, Civil Procedure Code, and that the only issue which required to be decided was issue 8, namely, whether the notices and the assessment under the impugned Acts are legal, operative and binding on the plaintiffs? Issues 1, 3, 4, 6, 7 and 9 are merely matters of argument. Issue 5 was given up on behalf of the defence. The plaintiffs then, being zamindars holding their estate permanently settled with their predecessor or under the provision of regulation, challenge the validity of the Act upon three grounds, firstly, that the Act has not been validly enacted under the provisions of the Government of India Act, 1937 (hereinafter to be referred to as the India Act), secondly, that if it is held to be validly enacted it cannot apply upon its true construction to a permanently settled estate and lastly, that if the Act can be construed to operate as a repeal of the legislative provisions of the regulation, this involves a direct breach of the promise given under the regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, it is now pertinent to consider the question whether the imposition of agricultural income tax in respect of agricultural income derived by a zamindar from his permanently settled estate is to any, and if so to what extent, inconsistent with the provision of the Regulation. Fortunately, so far as this Court is concerned, there is an authoritative decision of their Lordships of the Judicial Committee in the celebrated case in Probhat Chandra Barua v. Emperor [1930] 57 I.A. 228; 5 I.T.C. 1 which must guide in deciding this question. This Court must accept the pronouncement given by Lord Russell of Killowen while delivering the judgment of their Lordships and must reject an attempt to distinguish that decision upon the grounds which will be indicated hereafter. His Lordship after examining all the relevant provisions in the various Bengal Regulations of 1793 came to the conclusion that the regulation was a master regulation and then proceeded to examine its terms and specially Art. 6 which was relied by counsel before their Lordships (as it has been mainly relied upon by counsel for the plaintiffs before this Court) and held that their Lordships "are unable to find in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly settled zamindaris the tax being a tax on agricultural incomes only and with reference to a particular source it cannot be validly imposed even according to the decision in Barua's case. I do not understand this distinction. If the Income tax Act can validly tax all incomes including agricultural and non agricultural incomes I do not see why the same taxation cannot be imposed by two competent bodies the one taxing non agricultural income and the other taxing agricultural income of the zamindar assessee. This is exactly what has been provided by the present India Act. But for the exception given in Section 4(3), Income tax Act, it would be payable upon agricultural income also. That tax can now be imposed by the Provincial Legislature by giving it that power by inserting it as item 41, in List II, Schedule 7. The argument that income tax is a tax on income without any reference to a source loses sight of the Sections in the Income tax Act which specifically mention the sources, e.g.. Section 4, Section 6 and Section 12. It is proper that I should state here the other grounds upon which the decision in Barua's case was sought to be distinguished. It was argued by Sir Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be raised from time to time so as to maintain the proportion to the fruits of cultivation which have increased." But the observations of Lord Porter while delivering the judgment of the Board in Bhagwan Baksh Singh v. Secretary of State [1940] 67 I.A. 197, at p. 206, are useful to show that in considering the way in which land revenue is regarded in India no comparison with tenures in England is of such (if any) assistance. Its universality, its quantum, and the tendency of the Indian outlook to regard the Government as a sharer in all the produce of the land are matters of importance. That was a case in which the question arose as to whether land revenue must be deducted in calculating the gross annual profit of a property and it was pointed out that it must be so deducted (these two cases did not concern permanently settled estates). It is also true that "Whatever doubts be entertained as to whether before the British occupation the zamindars had any proprietary interest in the lands comprised within their respective districts, it is now established by high authorities that the permanent settlement itself recognises and proceeds on the footing that they are the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid in accordance with the original settlement and kistbandi of the mohal. These kabuliyats are kept in the office of the Collector to which reference is made from time to time in cases arising under the Land Revenue Sales Act of 1859. In the Barua's case Lord Russell in the paraphrase of Art. 6 which I have already quoted expressly used the words: "that a zamindar shall have fixity of payment and fixity of tenure and rejected the argument advanced on behalf of the assessee as unsound that the jama was a tax, not a rent or rent charge." In my opinion these quotations from these high authorities are quite sufficient to confirm me in the view which I take that all that the zamindar has been promised is a right to remain in quiet possession of his permanently settled estate provided he pays regularly the amount which he agreed to pay by the engagement endorsed by the kabuliyat executed in pursuance of the regulation. It should be stated here that after the promulgation of the regulation the zamindars were called upon to enter into kabuliyats with the Government of India through the Collector and in these kabuliyats they expressly applied that the estates of which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and (iii) by the Instrument of Instructions the Governor of Bihar should not have assented in the name of His Majesty to the Bill which alters the character of the permanent settlement. Firstly, as to the effect of the definition in the Act. Section 311(2), Government of India Act, defines agricultural income to mean "agricultural income as defined for the purpose of the enactments relating to income tax." By Section 2 of Act XI of 1922 (Income tax Act) agricultural income has been defined. The Act by Section 2 has also defined agricultural income. It will be observed that the whole of sub clause (c) which is found in the Income tax Act definition has been omitted from the definition in the Act and sub section (1) of sub clause (a) has been altered changing the words "assessed to land revenue in British India" to "assessed to land revenue in Bihar" and by changing the words "subject to the local rate assessed and collected by officers of the Crown as such" to "subject to the local cess or rate assessed and collected under any Bengal Act or under any Bihar and Orissa Act or under any Bihar Act." It was therefore, argued that by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether the local cess or rate assessed and collected under these Acts is assessed and collected by officers of the Crown as such. To begin with it is clear to me that if any local cess or rate is assessed and collected under these Acts not by officers of the Crown as such then agricultural income on those lands which are subject to such cess or rate cannot be brought within the taxation of the Bihar Act. This was conceded by the learned Advocate General who appeared for the defendant and in my opinion rightly. It was argued at great length that the cess which is imposed and collected under the Cess Act (Bengal Act IX of 1880) is not assessed and collected by officers of the Crown as such. But a perusal of the provisions of Part 2 makes it clear that the valuation of the land is made under the orders of the Board of Revenue by the Collector of the district who is defined to be the officer in charge of the revenue administration of a district and includes any person specially invested with the powers of a Collector for the purposes of this Act. Sections 14, 16 and 17 describe the procedure which must be adopted by the Collector requiring the holders of an estate or tenure of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese provisions are based upon the view that it is expedient to take advantage of the local knowledge of the District Committee in order to see what should be the proper rate at which cess should be levied. The final authority, it will be noticed, is not the Committee, but the Commissioner. Section 152 also provides that the Commissioner when re considering the estimates submitted to him under Section 151 may either sanction the estimate and rate as determined by the Committee or may submit such estimate together with the reasons recorded by the Committee for adhearing to the original view to the Lieutenant Governor, and by Section 153 the Lieutenant Governor finally decides the rate and the estimate which should be published so that by Section 156 the rate which is thus published in the Gazette becomes leviable in the district for the year. These provisions strengthen me in the view which I take that the local cess is assessed and collected under the Cess Act by the officers of the Crown as such. It was then urged that the Collector under the Cess Act cannot be styled as an officer of the Crown as such because, so it was argued, there is no bar to any private person being special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they are of opinion that if the wider construction had been applied to the statute, and it was supposed that it was intended thereby to comprehend cases so as to include those insisted on at the bar, it would have been beyond the jurisdiction of the colony to enact such a law. Their jurisdiction is confined within their own territories, and the maxim which has been more than once quoted extra territorium jusdicenti impune non paretur, would be applicable to such a case. Lord Wensleydale, when Baron Parke, advising the House of Lords in Jefferys v. Boosey [1854] 4 H.L.C. 815 expresses the same proposition in very terse language......It appears to their Lordships that the effect of giving the wider interpretation to this statute necessary to sustain this indictment would be to comprehend a great deal more than Her Majesty's subjects; more than any persons who may be within the jurisdiction of the colony by any means whatsoever and that therefore if that construction were given to the statute, it would follow as a necessary result that the statute was ultra vires of the Colonial Legislature to pass. Their Lordships are far from suggesting that the Legislature of the colony did m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legislative power is perfectly distinct from that which is within such power, the Act can be ultra vires in the former while intra vires in the latter," and then he makes the observation which has been relied upon. In the present case it is within the Province of the Bihar Legislature to tax agricultural income provided the agricultural income is as defined in the Government of India Act. If the definition unwittingly extends beyond the limit prescribed by the definition of the India Act the whole Act cannot be held to be ultra vires because the subject which is beyond its legislative power is perfectly distinguishable from that which is within its power. I do not propose to deal with the argument as to severability at any length because this has been sufficiently dealt with in the Federal Court judgment from which I have just been quoting. But I may usefully draw attention to the judgment of their Lordships of the Privy Council in Attorney General for Canada v. Attorney General for British Columbia [1930] A.C. 111 where Lord Tomlin who delivered the judgment of the Board laid down four propositions which he deduced from the decisions of the Judicial Committee in deciding qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rliament. I do not see any escape from the conclusion that the India Act has deliberately drawn a distinction between British India and a part of British India. It appears also that the Governor General is required to exercise his discretion only where the Provincial Legislature proposes to introduce a Bill which is repugnant to any Act of Parliament extending to the whole of British India and where the Bill is not repugnant to any provision of an Act of Parliament extending to the whole of British India but is repugnant to an Act of Parliament which extends to a particular Province only the Legislature and the Governor of that Province may well be left with the discretion to deal with the condition of their own Province. But be that as it may, as the India Act itself has drawn a distinction between British India and a part of British India in various sections of the Act, I must accept the argument advanced on behalf of the defendant that the regulation is not an Act of Parliament extending to the whole of British India. Is the regulation an Act of Parliament? an elaborate argument was advanced before us to ascertain the position of the East India Company at the time when the Regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er clearness the subordination of the lessor Governments and repeated the restrictions upon the exercise by them of various sovereign powers. But subject to that subordination and to those restrictions, those statutes never took away those powers, but, on the contrary, repeatedly recognised their existence. And accordingly in East India Company v. Syed Ali [1859] 7 M.I.A. 555, this Board held that a treaty entered into by the Government of Madras, after compliance with the statutory conditions, was a valid exercise of sovereignty......By the Government of India Act, 1858, the delegation of sovereign power to the Company was determined, and it has since been exercised directly on behalf of the Crown; in India (speaking generally) through the same authorities as before, in England through the Secretary of State. Under the sovereign power thus delegated for so long to the Company and since 1858 exercised directly on behalf of the Crown, the British Empire in India has been built up." If the Regulation was promulgated by the East India Company or by its officers, namely, the Governor General of Bengal the regulation was promulgated by a body to whom sovereign power has been deleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that if those complaints be found to be based on truth they should be speedily removed. It will be observed that the Court of Directors was the sole Judge as to whether the abuses complained of actually existed and ought to be or have been removed. The truth of the matter is that the East India Company was a trading company from 1600 to 1764; it obtained a permanent lease of the Dewani in 1765 from the Moghuls and, therefore, the Parliament could not legislate as a de jure sovereign of the territories which were placed under the Dewani and the Nizamat of the East India Company by a permanent lease from the sovereign of India. For these reasons I am of opinion that the Regulation was not an Act of Parliament and that it did not extend to the whole of British India. It follows that the Act is nor illegal on these grounds which I have examined. Thirdly, as to the disregard of the provisions in the Instrument of Instructions. By clause 18 of the Instrument of Instructions to the Governor it is provided that: "Our Governor shall not assent in Our name to, but shall reserve for the consideration of Our Governor General, any Bill of any of the classes herein specified, that is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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