ENGLISH AND SCOTTISH JOINT CO-OPERATIVE WHOLESALE SOCIETY LTD Vs. COMMISSIONER OF AGRICULTURAL INCOME TAX, ASSAM

JUDGEMENT

(1.) The appellant, a society incorporated in the United Kingdom under the Industrial and Provident Societies Act, 1893, submits to review in this appeal a judgment of the High Court at Fort William in Bengal in a reference made under S. 28 (1), Assam Agricultural Income - tax Act, 1939. By that judgment the High Court answered in the affirmative a question of law submitted by the Board of Agricultural Income - tax in relation to the assessment of the appellant for the year 1939 - 40. The question is "whether the society is chargeable to Assam Agricultural Income - tax in respect of the cultivation and/or manufacture of tea at its Decakiajuli Estate in the Province of Assam, and sold to its members." The question is neither grammatical nor intelligible as it stands, and the statement of facts omits to state some of the facts regarded by the parties as material for the decision of the question which the Board seems to have intended to submit.

(2.) That question emerges clearly enough from a consideration of the proceedings which took place while the company's assessment was under consideration.

(3.) The Assam Agricultural Income - tax Act applies to all agricultural income derived from land situated in the Province of Assam (S. 5) and it provides by the charging section (S. 3) that agricultural income - tax at the rate specified in the Annual Assam Finance Acts shall be charged for each financial year on the total agricultural income of the previous year. The part of the definition section (S. 3) which is relevant to the present case defines agricultural income as any income derived from land used for agricultural purposes by agriculture. The Indian Income - tax Act contains a definition of agricultural income in the same terms, but by a rule (S. 24) made under it, "income derived from the sale of tea grown and manufactured by the seller in British India shall be computed as if it were income derived from business and 40 per cent, of such income shall be deemed to be income, profits and gains liable to tax." The scheme of the Assam Act is to tax the remaining 60 per cent. only of the income derived from the sale of tea grown and manufactured by the seller in Assam and that result is secured by suitable provisions which need not be recited see the explanation to S. 2, the proviso to S. 8 and R. 5 made under the Act). Under the Act appeals against assessment lie to the Assistant Commissioner of Agricultural Income - tax (S. 24) and from him to the Commissioner (S. 26). When a question of law arises in the course of any assessment the Assam Board of Agricultural Income - tax may either of its own motion or on reference from any Agricultural Income - tax authority subordinate to it, draw up a statement of the case and refer it with its own opinion to the High Court (S. 28).