MR. JUSTICE DEOKI NANDAN AGARWALA versus UNION OF INDIA AND ANR.

Citation: [1999] 2 S.C.R. 1074 · Decided: 04-05-1999 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed
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Judgment (excerpt)

A 
MR. JUSTICE DEOKI NANDAN AGARWALA 
v. 
UNION OF INDIA AND ANR. 
MAY 4, 1999 
B 
[S.P. BHARUCHA, B.N. KIRPAL, S. RAJENDRA BABU, S.S. 
MOHAMMED QUADRI AND M.B. SHAH, JJ.] 
Constitution of India, 1950: Articles 125 an 22 I-Income tax-,Salaries 
of High Court and Supreme Court Judges-Whether income and is taxable 
C under Income Tax Act-Held, yes-Income Tax Act, 1961 : Section 14. 
D 
Words & Phrases: 
'Salary'-Meaning and scope of in the context of Articles 125 and 221 
of the Constitution of India, 1950. 
Appellant, a High Court Judge filed his income tax return claiming 
that the salary that he received as a Judge was n:ot liable to tax under the 
Income Tax, 1961. The said claim having been rejected by the Income Tax 
Officer and the appellate authority, the appellant preferred the present appeal. 
E 
The contention of the appellant was that Parliament could not legislate 
prior to the amendment of Articles 125 and 221 of the Constitution on the 
subject of salaries of High Court and Supreme Court Judges and, therefore, 
their salaries were not liable to Income Tax because the definition of 'income' 
under Income Tax Act includes 'salary'; a Judge of the High Court and 
Supreme Court has no employer and, therefore, what he receives was not 
F salary, but remuneration which is not taxable under the head 'salary' under 
the Income Tax Act. 
Dismissing the appeal, this Court 
HELD : 1.1. The salary of a Judge of a High Court and the Supreme 
G Court is income and is taxable by Act of parliament in just the same manner 
as is the income of any other citizen, [1077-A] 
1.2. There is no doubt that prior to the amendment of Articles 1.25 and 
221, the Parliament could not have legislated on Judges salaries but that 
does not mean that the salary of a Judge is not taxable under the Income Tax 
H Act, 1961. The subject of salary of a High Court and Supreme Court Judge 
1074 
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JUSTICEDEOKINANDANAGARWALAv. U.0.1.[BHARUCHA,1.] 
1075 
1Jnd the subject of tax on income are altogether different. 
A 
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(1076-G; 1077-A] 
2. It is true that High Court and Supreme Court Judges have no 
employer but that ipso facto, does not mean that they do not receive salaries. 
They are constitutional functionaries. Articles 125 and 221 of the Constitution 
deal with the 'salaries' of Supreme Court and High Court Judges respectively B 
and expressly State that what the Judges receive are 'salaries.' It is not 
possible to hold therefore, that what Judges receive are not salaries or that 
such salaries are not taxable as income under the head of 'salary'. 
(1077-C-D] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 411 of c 
1982. 
• 
From the Judgment and Order dated 28.3.81 of the I.T.O., A. Ward, 
Allahabad in the Assessment year 1978-79. 
Satish Chandra, P.P. Singh and S.R. Sethia for Appellant. 
D 
V. Gauri Shanker (F.S. Nariman), (A.C.), S. Rajappa, S.K. Dwivedi, S.W.A. 
Quadri, P. Parmeshwaran and G.B. Sathe for the Respondents. 
The Judgment of the Court was delivered by 
BHARUCHA, J. The appellant was a Judge of the Allahabad High E 
Court. He filed his income tax return for the Assessment Year 1978-79 on the 
basis that the salary that he received as a Judge was not liable to tax under 
the Income Tax Act. The contention having been rejected both by the l.T.O. 
and in appeal, a special leave petition was filed. Leave to appeal was granted 
and on 19th April, 1983 the following four questions were referred by two 
learned Judges; to a Constitution Bench: 
F 
"l. Whether the salary of a Judge of the High Court of a State 
payable under cl.( l) of Art. 221 of the Constitution and the salary of 
a Judge of the Supreme Court payable under cl.(1) of Art. 125 is 
taxable by a law made by Parliament under Entry 82 of List I of the 
Seventh Schedule. 
G 
~ 
2. Whether the expression 'Rupees' in Part D of the Second 
Schedule which stipulates the sums payable to the Judges of the 
Supreme Court and the Judges of the High Court implies the purchasing 
power equivalent to the goods and services that could be bought in 
the year 1950. That is to say, whether the salaries so fixed should be H 
1076 
A 
SUPREME COURT REPORTS 
[1999] 2 S.C.R. 
construed as meaning their real value in terms of goods and services 
which they could buy at the commencement of the Constitution or do 
they represent their nominal value at any given point of time. 
3. Whether the expression 'such allowances' referred to in cl. (2) 
of Art. 125 and cl.(2) of Art. 221 of the
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