TRAVANCORE RUBBER & TEA CO. LTD. & ANR. versus STATE OF KERALA & ANR.

Citation: [1963] SUPP. 1 S.C.R. 836 · Decided: 01-11-1962 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

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Judgment (excerpt)

1962 
.J(arimtharuvi Tea 
Estates Ltd., 
Kottayam 
v. 
State of Kera/a 
~aghubar Doyal, J. 
196~ 
Novemb1r, 1. 
836 SUPREME COURT REPORTS [19fi3]SUPP. 
Agricultural Income-tax Act added by the Amend-
ment Act does not cover the expenses incurred in the 
upkeep or maintenance of immature tea plants from 
which no income has been derived during an account· 
ing year and that the agricultural inrnme derived 
from tea plantations will be computed in accordance 
with the provisious of the Income· tax Act and the 
Income-tax Rules. We order that a writ be issued to 
the respondents restraining them, their agents and 
servants from enforcing or acting upon the provisions 
of Explantation 2 to s. 5 of the Agricultural Income-
tax Act against the Karimtharuvi Tea Estate Ltd., 
Kottayam, viz., petitioner No. J. 
We direct the res-
pondents to pay the costs of petitioner No. 1, on eset. 
Pet·i#o11s allowed in part. 
TRAV ANCORE RUBBER & TEA 
CO. LTD. & ANR. 
v. 
STATE OF KERALA & ANR. 
(S. K. DAS, J. L. KAPUR, A. K. SARKAR, M. 
HIDAYATULLAH and RAGHUBAB- DAYAL, JJ.) 
Agricultural Income Tax-Rubber Plantation-Computa-
tion of agricultural income-Deductions-Statute disallowing 
expenditure on immature plants-Validity of-If discriminatory-
Agricultural Income Tax (Amendment) Act, 1961 (Ker. IX of 
1961), s. 2-Constitution of India, Art. 14. 
Under the Agricultural Income Tax Act, J 950, agricul-
tural income from rubber plantations was to be computed in 
the same manner as ·under the Indian Income-tax Act, 1922. 
In December 1960, the Supreme Court held that the petitioners 
were entitled to deduct the expenses incurred in the upkeep 
and maintenance of itnn1ature rubber plants in the assessment 
of their agricultural income under the Agricultural Income Tax 
I 
t 
I S.C.R. 
SUPREME COURT REPORTS 
837 
Act. Thereafter, by the Agricultural Income Tax (Amendment) 
Act, 1961 an Explanation 2 was added to·;. 5 of the 01·i~inal 
Act which provided that no deduction shall be allowed of any 
expenditure laid out or expended for the cultivation, upkeep 
or maintenance of immature plants from which no agricultural 
income was derived during the previous year. The petitioners 
contended that Explanation 2 was ultra vires and discrimina-
tory. 
Hel,d, that Explanation 2 to s. 5 was validly enacted. 
The State Legislature had full power to tax "agricultural 
income" as defined in the Agricultural Income Tax Act, which 
definition was in conformity with the definition in the Indian 
Income-tax Act, 1922. It was for the State Legislature to 
provide for such deductions from such income as it considered 
fit. 
The word "income" had a very wide meaning. The word 
"income" in Entry 46, List lI. Seventh Schedule of the Constit-
ution which empowers a State Legislature to legislate with respect 
to taxes on agricultural income could not be confined to gross 
receipts after deduction of necessary expenses incurred to get 
those receipts. 
Travancore Rubber & Tea Co. Ltd. v. Commissioner of 
Agricultural Income-tax, Kerala, [1961] 3 S. C.R. 279 and 
Navinchandra Mafatlal v. Commissioner of Income-tax, Bombay, 
(1955] I S. C. R. 829, referred to. 
Hel,d, further, that Explanation 2 to s. 5 was not discri-
minatory and did not contravene Art. 14. Though Explana-
tion 2 was applicable to rubber plantations and not to tea 
plantations, the distinction was based upon the special ·provi-
sions of the Income-tax Act and the rules made thereunder. 
The income derive from the sale of tea was partly derived from 
land by agriculture and partly from business. 
Such is not the 
case with income derived from sale of rubber. 
The Karimtharuvi Tea Estates Ltd., Kottayam v. State of 
Kerala, [1963] Supp. I S. C.R. 823, referred to. 
ORIGINAL juRJSDICTION: Petitions Nos. 237 to 
239 of 61. 
Petition under Art. 32 of the Constitution of 
India for enforcement of Fundamental Rights. 
S. T. Desai, J.B. Dadachanji, 0. C. Mathur, 
p.IJ.d Ravindar Narain, for the petitioners. 
' 
' . 
. 
1962 
Travancore Rubber 
& 1 ea Co. Ltd. 
. 
v. 
Stale 'lj Kerala 
838 SUPREME COURT REPORTS [1963] SUPP. 
1962 
A. V. Viswanathr1 Sristri and V.A .8. illnhainmed, 
Trnvancort /lubber 
for the respondents. 
. 
(.f T,a Co, Ltd. 
v. 
Stattof Kera/a 
1962. November l. The .Judgment of' the Court 
was delivered by 
Raghnbar Dayal, J. 
R.\(11/GBAR D,1 ¥AL, .J.-Thc Travancore Rubber 
and T"a Cu .. Ltd., hereinafter clkd the company, 
and one of its dirrctors and members, have filed 
these petitio

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