ASSAM COMPANY LIMITED Vs. STATE OF ASSAM

JUDGEMENT

(1.) The income from cultivation, manufacture and sale of tea being a composite income is exigible to both income-tax under the Indian Income Tax Act, 1961 and the Assam Agricultural Income-tax Act, 1939.

(2.) In this context being aggrieved by the decision of the Agricultural Income-tax Officer of the State of Assam (State Officer) who refused to accept the computation of agricultural income made by the Income-tax Officer (Central Officer) under the Income-tax Act, 1961 (Central Act) for the purpose of the levy of Assam agricultural income tax for the relevant assessment years, assessees-appellants approached the High Court of Guwahati by way of writ petitions questioning the authority of the State Officer to recompute the agricultural income already assessed by the Central Officers under the Central Act and for consequential reliefs. Their contentions being rejected both by the learned single Judge and the Division Bench of High Court of Guwahati, these appeals/petitions have been preferred.

(3.) It was argued on behalf of the appellants before the High Court that in view of the constitutional definition of agricultural income under Art. 366(1) of the Constitution, the agricultural Income-tax Officers of the State are bound by the computation of agricultural income made by the Income-tax Officer under the Central Act. They also contended before the High Court that the Assam Agricultural Income-tax Act (the State Act) has not specifically authorised the State Officers acting under the said Act to recompute the agricultural income which was already determined by the Central Officers under the Central Act and the Rule. They also contended in the alternative that if it is to be held that the Assam Agricultural Income-tax Act did authorise such a recomputation of income then such provisions of the State Act would be ultra vires of the Constitution. Per contra, it was the contention of the State that the tax on agricultural income being a State subject under Entry 46 of List II of the 7th Schedule to the Constitution, State has the legislative competence to enact a law which can also empower its officers to recompute the agricultural income even if the same is computed by the Central Officers under the Central Act and such a power under the State Act is found in S. 49 read with Rule 5 of the State Rules.