STATE OF UTTAR PRADESH Vs. SRINARAYAN

JUDGEMENT

(1.) This appeal, by special leave, raises the question whether Zamindari Abolition Compensation Bonds (shortly termed Bonds) issued by the U. P. Government to intermediaries in payment of compensation payable on the basis of their rights under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (U. P. Act 1 of 1951), hereinafter referred to as the Act, have to be accepted by the appropriate authorities in payment of the agricultural income-tax due from them.

(2.) The facts leading to the appeal, in brief, are that the respondent, an ex-zamindar, was assessed to agricultural income-tax in the assessment year 1860 F corresponding to 1952-53, on the basis of the agricultural income accruing in the previous year 1359 F corresponding to 1951-52. He did not pay the assessed tax and was further assessed to a penalty. In the result, Rs. 868 were to be paid by him for tax plus penalty,

(3.) The respondent's writ petition contending that he was not liable to pay tax was dismissed by the High Court. Thereafter, the agricultural' income-tax authorities took out proceedings for the realisation of the amount due from him. On July 24, 1956 the respondent presented an application to the Agricultual Income-tax Assessing Officer, Allahabad, stating that he had no ready cash to pay the dues and that he was therefore depositing Bonds of the value of Rs. 850 and Rs. 18 in cash and praying that the Bonds be accepted in payment of tax dues. This application was rejected by an order stating that there was no rule for the acceptance of those bonds and that they be returned to the applicant.