ENGLISH AND SCOTTISH JOINT CO OPERATIVE WHOLESALE SOCIETY LIMITED 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 procedure which led to the reference under S. 28 can be briefly summarized. While the assessment was under consideration the appellant petitioned the Board of Agricultural Income - tax, Assam, to state a case to the High Court. The petition stated that the appellant society was a co - operative society incorporated under the Industrial and Provident Societies Act of 1893 and that the tea produced on its estates belonged to and was distributed entirely to its members, except certain inferior grades of dust teas which were sold in the Calcutta market, and that no profit accrued by such sales as the prices obtained were below the cost of production. The petition also stated that the question of law was whether the appellant society, owning tea estates in Assam, the produce of which is distributed only among its members, is liable to assessment to Assam Income - tax. The Board refused the prayer of the petition, but subsequently changed its view and of his own motion the Board member stated the present case. It is unfortunate that he neither consulted the parties about the facts which were necessary to raise the supposed question of law, nor about the formulation of the question of law itself. For some reason he rejected the formulation suggested in the petition and substituted a question of his own. As the accompanying statement of facts merely stated that the tea produced by the appellant society (apart from the dust tea) was sold to its members and said nothing of the price, it can be inferred that the Board member intended to submit the question whether a business carried on by a society or company, whether incorporated or not, which cultivates produce on its own land and sells it exclusively to its own members, is by its nature incapable of begetting profits as that term is understood in the Assam Agricultural Income - tax Act or, since there is no distinction on this point, the Indian or the United Kingdom Income - tax Acts.