LexSTATE OF MADHYA PRADESH AND ORS. versus SIRAJUDDIN KHAN
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1964 April 22 838 SUPREME COURT REPORTS [196t] STATE OF MADHYA PRADESH AND ORS. v. SIRAJUDDIN KHAN [K. SUBBA RAO, J. C. SHAH AND S. M. S1KRI, JJ.] Madhya Pradesh Abolition of Proprietary Rights (Estates .. Mahals, Ali&"tated Lands) Act, 1950 (M. P. Act No. 1 of 1951) Sch. I, r. 2(2)(c). The respondent was an owner of an estate in Madhya Pradesh. Under the provisions of the Madhya Pradesh Aboli-· tion of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 the respondent's estate was vested in the State and he became entitled to compensation. The compensation was to be paid at the rate of ten times the net income. The net in- come would be calculated by deducting from the gross in-· come, inter alia, the average of the income tax paid in respect of the income from big forest during 30 agricultural years proceeding March 31, 1951. In calculating the net income the Compensation Officer deducted not only income tax but also super tax and the r,espondent appealed to the Settlement Com- missioner against the deduction of super tax. On the rejection of the appeal the respondent filed a writ petition in the High Court and the High Court held that on a construction of the various provisions of the Act it was wrong to deduct the super- tax while calculating tire compensation payable to the res- pondent. The appellant filed this appeal on special leave granted by this Court. It was contended on behalf of the appellant that the ob- ject of the r. 2(2) (c} of Schedule I to the Act is to provide a method for ascertaining the net income of an estate and there- fore there cannot be any distinction between income tax and super-tax and the expression "income-tax" has been used comprehensively to include super-tax also. The contention on behalf of the respondent was that from a historical point as well as from the provisions of the Act it is seen that income tax and super-tax were distinct and separate and the former does not include the latter. Held: (i) There are two essential differences between in-- come-tax and super-tax. They are (1) though both the taxes are assessed on the total income of a person, the total income for the purpose of income tax is computed on the basis of income classified chargeable under the different heads mention-ed in s. 6 of the Income-tax Act whereas super-tax is not concerned· with the different heads, but is payable on the total income so ascertained and (2) while super-tax 1, except in a few cases, is payable by the assessee direct, the income tax is payabl.e by him direct as well as by deduction. (ii) Examining the provisions of r. 2(2)(c) Schedule I of the Act it is evident that with the knowledge that under the In- come-tax Act two seperate duties namely income-tax and super-tax are imposed the Legislature has used the expression "income tax". If the intention was to refer to both the talreS. it would have stated income-tax and super-tax. The menticn· or the one and the omission of the other is a sure indication of its intention. The qualification that income-tax paid should have been in respect of the income received from the big .. -- '1 S.C.R. SUPREME COURT REPORTS 839 forests necessarily excludes super-tax for under the Income- 1964 tax Act no super-tax is payable in respect of the income re- State >I Ma4k ceived from big forest but only in respect of the total income. p,.0.::Aana0t'f:.. (iii) Having regard to the terms of r. 2(2)(c) of Sche- 8 . ..,J· Kha• dule I to the Act it is clear that income-tax does not take in ""' in .super-tax. - Case law reviewed. Brooks v. Commissioner of Inland Revenue, (1914) 7 T.C. 236, Bates. In re: Salmea v. Bates, 1925 Ch. D. 157 and Reckitt v. Reckitt, (1933) 1 LT.R. 1. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5101 1963. Appeal by special leave from the judgment and order dated January 22, 1960 of the Madhya Pradesh High Court in Misc. Petition No. 35 of 1959. B. Sen and J. N. Shroff, for the appellant. K. N. Rajagopal Sastri and A. G. Ratnaparkhi, for the .respondent. April 22, 1964. The judgment of the Court was deli- vered by SueeA RAo, J.-This appeal by special leave raises the Subba Baa, J. question whether the expression "income-tax" in cl. (c) of sub-r. (2) of r. ~ of Schedule I to the Madhya Pradesh Aboli- tion of Proprietary Rights (Estate, Mahals, Alienated Lands) Act, 1950 (M.P. Act No. 1 of 1951), hereinafter cal- led the Act, includes super-tax. The fa
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