MARY ISSAC Vs. INSPECTING ASSISTANT COMMISSIONER

JUDGEMENT

(1.) In these Original Petitions certain common questions of law arise for consideration. The petitioners are assessees to Agricultural Income Tax. They are partners of M/s. Pambra Coffee Plantations, Sultan Battery. The proceedings impugned in these OPs. relate to the assessment year 1980-81. According to the petitioners, the relevant accounting period regarding agricultural income from M/s. Pambra Coffee Plantations is 1-7-1978 to 30-6-1979 and regarding income from own properties (Rubber Plantations), it is from 1-4-1979 to 31-3-1980. The petitioners submitted their returns for the year 1980-81 on 29-9-1980. S.17A was inserted in the Agricultural Income Tax Act, by Kerala Act 17/1980. S.1(2) of the said Act gave retrospective effect to the provision from 1-4-1980. The newly enacted provision required the assessees to pay the admitted tax as per the returns. The return should be accompanied by proof of payment of such tax. Admittedly, the petitioners did not comply with the same. The 1st respondent assessing authority - issued Ext. P1, order dated 30-3-1982 demanding payment of such admitted tax on or before, 30-4-1982. The petitioners applied for time for payment by communication dated 26-4-1982, By Ext. P2 dated 11-5-1982 the 1st respondent gave extension of time upto 25-5-1982 and also informed the petitioners that if. the admitted tax as per the returns is not paid on or before the said date, a penalty will be levied under S.17A(3) of the Agricultural Income Tax Act These Original Petitions are filed praying (a) to declare that S 17A(3) of the Agricultural Income Tax Act as ultravires and void; (b) to quash Exts. P1 and P2 and for other reliefs. Since the challenge in these OPs. centre round S.17A of the Agricultural Income Tax Act, introduced by Act 17 of 1980, it will be useful to extract the same:

(2.) Counsel for the petitioners. Mr. P. C. Chacko, vehemently contended that S.17A(3) of the Agricultural Income Tax Act is ultra vires and void. According to counsel, the said provision is similar to S.140A(3) of the Income Tax Act, 1961 which was held to be violative of Art.19(1)(f) of the Constitution by a Bench of the Madras High Court in the decision reported in A.M. Sali Maricar and another v. Income Tax Officer (90 ITR 116) (Madras). (The court considered S.140A of the Income Tax Act, 1961, as the section stood originally, as inserted by Finance Act, 1964). For the reasons stated therein, S.17A(3) of the Agricultural Income Tax Act is violative of Art.300A of the Constitution and so infirm. Government Pleader Mr. Divakaran Pillai controverted the above proposition and brought to my notice the decision of the Calcutta High Court reported in Gunny Exporters Pvt. Ltd v. Income Tax Officer (1976 Taxation Law Reports 603), the decision of the Andhra Pradesh High Court reported in Kashiram v. Income Tax Officer (107 ITR. 825 AP.); the decision of the Madhya Pradesh High Court reported in Commissioner of Income Tax. M. P. v. Vrajlal Manilal & Co. (127 ITR 512 M. P) and the decision of the Jammu and Kashmir High Court reported in Seva Ram v. Income Tax Officer (141 ITR 933). (The Andhra Pradesh, Madhya Pradesh and Jammu and Kashmir High Courts considered the provisions of S.140A of the Act as it stood then, after the Taxation Laws Amendment Act, 1970, whereas the Madras & Calcutta High Courts considered the provisions in the Act as inserted by Finance Act, 1964). Counsel for the Revenue forcibly submitted that the reasoning and conclusion in the aforesaid four decisions dissenting from the Madras view, is more reasonable and should be accepted and in that view S.17A(3) of the Agricultural Income Tax Act is valid and legal. I see considerable force in the contention advanced by the Revenue. For the reasons stated in the decisions of the Calcutta, Andhra Pradesh. Madhya Pradesh and Jammu and Kashmir High Courts referred to above, I am of opinion that S.17A(3) is not ultra vires or infirm as contended by counsel for the petitioners. I would respectfully adopt the reasoning of the High Courts of Calcutta, Andhra Pradesh, Madhya Pradesh and Jammu and Kashmir in preference to the decision of the Madras High Court, referred to above.

(3.) On the merits, the rival contentions of the parties covered a wide range. In my opinion, it is not necessary to advert to or adjudicate all such issues at present. It is premature to adjudicate those issues raised by the parties. Ext. P1 is an order directing the petitioners to pay the admitted tax as per the returns. The petitioners' counsel did not dispute the said proposition. There cannot be any attack on Ext. P1 order. That required only payment of admitted tax. It is warranted by the terms of S.17A(1) of the Act, which is not challenged. Ext. P2 notice dated 11-5-1982 served on the petitioners, required them to pay the admitted tax and also informed them, that on failure to pay the admitted tax, a penalty under S.17A(3) will be levied. The petitioners are bound to pay the admitted tax as per the returns. They did not do so as envisaged by S.17A(1) of the Act. The returns themselves were filed long after the Act was published -- only on 29-8-1980. This is a vital aspect. As to whether for the non payment of the admitted tax along with the returns in these cases the assessing authority may levy a penalty under S.17A(3) of the Act, does not arise for consideration at present. Ext. P2 is only a notice affording extension of time till 25-5-1982. It is only on failure to pay the sum on or before the said date, levy of penalty under S.17A(3) of the Act was threatened. Prima facie, S.17A(3) appears to be a discretionary power. The petitioners have got an opportunity to be heard under the proviso to S.17A(3) of the Act. It is open to the petitioners to file their objections or explanation, therefore, if any, and plead that no penalty is exigible or should be levied even for non payment of the admitted tax due, as per the returns when the penalty proposed as per Ext. P2 is sought to be levied. That stage has not reached at present.