ASSAM COMPANY LTD. AND ANR. versus STATE OF ASSAM AND ORS.

Citation: [2001] 2 S.C.R. 515 · Decided: 21-03-2001 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

,. 
ASSAM COMPANY LTD. AND ANR. 
A 
t 
V. 
STATE OF ASSAM AND ORS. 
MARCH21, 2001 
[S.P. BHARUCHA, N. SANTOSH HEGDE AND Y.K. SABHARW AL, JJ.] 
B 
Assam Agricultural Income Tax Act, I 939 : Section 49. 
Agricultural income-Cultivation, manufacture and sale of tea-State 
Officer under State Act refused to accept computation of agricultural income c 
made by Central Officer under Central Act and re-computed such agricultural 
income-Validity of-Held: State Act intended the agricultural income to be 
the same both under the Central and State Acts-Hence, State Officer has no 
authority to 11!-compute the agricultural income made by the Central Office1~ 
Income Tax Act, 1961. 
D 
Assam Agricultural Income Tax Rules, 1939: 
Rule 5 proviso-Empo1vered State Officers, in given cases, to refuse ta 
accept the computation of agricultural income by Central Officer-Constitu-
tionality of-Held: The object and scheme of the State Act do not allow re-
computation of agricultural income already made by Central Officer-Hence, 
E 
proviso to Rule 5 ultra vires the State Act. 
Words and Phrases : 
"Agricultural income"-Meaning of-In context of A11. 366(1) of the 
Constitution of India, 1950. 
F 
-"' 
The appellant was engaged in the business of cultivation, manufac-
ture and sale of tea and the income from which, being a composite income, 
was exigihle to both income tax under the Income Tax Act, 1961 (Central 
Act) and the Assam Agricultural Income Tax Act, 1939 (State Act). But the 
Agricultural Income Tax Officer (State Officer) under the State Act 
G 
refused to accept the computation of agricultural income made hy 
... 
the Income Tax Officer (Central Act) for the purpose of levy of 
)I. 
Assam agricultural income tax. Being aggrieved the appellant-assessee 
filed a writ petition before the High Court, which was dismissed. Hence 
this appeal. 
H 
515 
516 
SUPREME COURT REPORTS 
[2001] 2 S.C.R. 
A 
On behalf of the appellant it was contended that in view of the 
.. 
definition of "agricultural income" under Article 366(1) of the Constitu-
t 
tion of India, the State Officer was bound by the computation of "agricul-
tural income" made by the Central Officer under the Central Act; and 
that proviso to Rule 5 of the Assam Agricultural Income Tax Rules, 1939 
B 
empowering the State Officer, in given cases, to refuse to accept the com-
putation of agricultural income made by the Central Officer is ultra vires 
the State Act. 
The following question arose before this Court : 
c 
Whether for the purpose of levy of Assam agricultural income tax 
the State Officer has the authority to re-co.mpute the agricultural income 
already assessed by the Central Officer under Central Act. 
Allowing the appeal, the Court 
D 
HELD : 1. The fact that the legislature under the Assam Agricul-
tural Income Tax Act, 1939 (State Act) intended to make the agricultural 
income to be the same for the purpose of the Income Tax Act, 1961 
(Central Act) as well as the State Act is clear from the provisions of Section 
20-D of the State Act which provides that if there is any variation in the 
E 
assessment made by the Central Officers under the Central Act by virtue 
·or any revision leading to enhancement or reduction, such enhanced or 
reduced income shall be taken as the agricultural income for the purpose 
of levy of State tax. From the provisions in the State Act and bearing in 
mind the definition of agricultural Income under Article 366(1) of the 
Constitution It ls clear that the State Act Intended the agricultural Income 
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for the purpose of Its levy to be that which ls computed 88 such by the 
Omcers acting under the Central Act. (521-B·D) 
,..-
2. It Is well establlshed rule of Interpretation that while Interpreting 
a. particular provision or a Statute, courts should hear In mind the object 
G 
and scheme of the entire Act. A particular provision of the Act cannot be 
considered or Interpreted in Isolation so as to give room for conflict inter st 
between the provisions of the same Act. Court.~ should also bear in mind 
that while interpreting a provision of the Act an interpretation leading to 
.... 
the provision becoming ultra vi res should be avoided. Thus examined, it is 
.A. 
seen from a plain reading of Section 49 of the State Act, it does not 
H 
authorise the Officers under the State Act to sit in judgment over the 
" 
j 
ASSAM CO. LTD. v. STATE [SANTOSH HEGDE, J.] 
517 
computation of income made by the Officers under the Central Act. Snch 

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