The State of Uttar Pradesh and Others v. Raja Syed Mohammad Saadat Ali Khan

_**Con1n11ssio11rr**_ _**of**_ 82 SUPREl\IE COURT REPORTS [1961] Accordingly, _we_ allow this appeal and set asido the judgment and order of the High Court. The answer to the question is in favour of the appellant, namely, that the sum of Rs. 32,500/- received by the asscssee was his professional income taxable in his hands. The appell11.nt will be entitled to his costs throughout. _Appeal allowed._ _**Income-tax**_ v. _**Thr1k.11r**_ _**Vas**_ _**1Jhr1rxatia**_ _S._ _K._ _Vas_ _]._ _July_ _•8._ THE STATE OF UTTAR PRADESH AND OTHERS !!. }{AJA SYED MOHAMMAD SAADAT ALI KHAN. (S. K. DAS, M. HIDAYATULLAH and J.C. SHAH, JJ.) _Agricultural Income-lax-Additional Collecior-PO'.vcr_ _of Assess-_ _ment-Amendi11g_ _Act giving retrospective ejfecl to amendecl provi-_ _sions-Prot-ision for_ _re·vicw_ _in_ _the amendment_ _Act-If_ _offecls the_ _powers_ _of the appellate_ _court-The_ _United Provinces Agricultural_ _Income-tax Act, 1949 (U. P._ _Ill_ _of 1949)-United_ _Provinces Land_ _Revenue Act, 1901_ _(U.P._ _III of 1901)._ The United Provinces Agricultural Income-tax Act, 1949, **authorised imposition** **of** **a tax** **on** **agricultural income within** **the** **State, and the agricultural income-tax and 3uper-tax were** charged on the total agricultural income of the previous year of the assessee. For the purposes. of the Act the Collector and the Assistant Collector were declared to be the assessing autho**rities within their respective revenue jurisdiction and the** **ex-** **pression" Collector" was to** **have** **the same meaning as in the** United Provinces Land Revenue Act, 1901. Under the rules framed by the government under s. 44 of the Act an assessec **having agricultural income in the jurisdiction** **of** **more than one** assessing authority was to be assessed by the Collector of the district in which he permanently resided. The State Government of 1,;ttar Pradesh appointed :Mr. K. C. Chaudhry under subs. l of s. r4(A) of the United Provinces Land Revenue Act, 1901, to be the Additional Collector in District Bahraich and authorised him to exercise all the powers and perform all the duties of a "Collector " " in all classes of cases", Claiming to exercise the .... ' 1 S.C.R. SUPREME COURT REPORTS 83 powers of a Collector under s. 14 of the United Provinces Agri- _I960_ cultural Income-tax Act of 1949 he assessed the net agricultural income of the assessec \vho O¥:ned landed property in two dis- _The_ _State_ _of_ tricts, namely, Bahraich and Kheri in the State of Uttar Pra- _Utt"'_ _Pmdesh_ desh, at 12,81,rro-ro-o and ordered him to pay Rs. l,36,390-2-0 & _Othm_ as agricultural income-tax and super-tax. The validity of this v. order was challenged by the assessee in the High Court by an _Raja_ _Syed_ application under Art. 226 of the Constitution and the High _.'llfoha11unad_ Court quashed the order of the Additional Collector holding that _Saadat_ _Ali_ _Khan_ he had no "extra-territorial" jurisdiction which was exercised by the Collector as the assessing authority in cases where the pi.·operty of the assessee was situate in several districts and as such the proceeding taken by him for assessing· agricultural income-tax was unauthorised. After the judgment of the High Court was delivered the State Legislature amended the United ,_; _. I ' ' __.(_ Provinces Agricultural Income-tax Act, 1949, by Act XIV of 1956, giving retrospective operation to the amending provisions . . The Amendment Act enacted that the assessment proceedings held by an Additional Collector who was invested with the powers of a Collector under Act III of 1901 should be deemed always to have been properly taken. The State Government submitted before the High Court an application under s. II of the amending Act for review of its judgment but it was dismissed. On appeal by the State Government by special leave, _Held,_ that the Additional Collector was competent to assess the liability of the assessee to pay agricultural income-tax and super-tax under the United Provinces Agricultural :Income-tax Act, 1949· A Court of appeal must give effect to the law as it stood at the time of hearing of the appeal if at any stage anterior to the hearing th.e Jaw had been amended with retrospective effect conferring on an authority or tribunal from the order whereof the appeal is filed, jurisdiction which it originally Jacked. The power of the appellate court to deal with the appeal in accordance of the amended Jaw is not affected by a 'provision for review as contained in s. II of the Amending Act. CIVIL APPELLATE JURISDICTION: _Civil_ Appeal No. 306 of 1957. Appeal from the judgment and order dated April 28, 1955, of the Allahabad High Court (Lucknow Bench), Lucknow, in Civil Miijc. Application No. 59 of 1954. _C._ _B._ _Agarwala,_ _C._ _P._ _Lal_ and _G._ _N. Diksliit,_ for the appellants. _S. P. Sinha_ and _B. R. L._ _Iyengar,_ for the respondent. 1960. July 28. The Judgment of the Court was delivered by 84 S"CPREME COUHT REPORTS [1961] _196o_ SHAH J.-Raja Syed Mohammad Saadat Ali Kha.n, who will hereinafter be referred to as " the assessee '', _**1'11t**_ _**State**_ _of_ f T 1 "' ' d ' B _Utt••_ _J'•adt5h_ is the owner o a uqa .,anpura m istr1ct ahra.ich o,. _Othm_ and Taluqa Mohammadi in district Kheri, in the State v. of Uttar Pradesh. The legislature of the United Pro_Raja Syed_ vinces enacted the United Provinces Agricultural _Mohammad_ Income-tax Act, Act III of 1949, authorising imposi_Saadat_ _Ali_ _Kha•_ tion of a tax on agricultural income within the State. _Shah_ _J._ By s. 3 of the Act, the liability to pay agricultural income-tax and super-tax at rates specified in the schedule therein was charged on the total agricultural income of the previous year of every person. By s. 14, the Collector and the Assistant Collector were for the purposes of the Act declared to be the assessing authorities within their respective revenue jurisdictions. As originally enacted, by s. 2(4), the expression "Collector" was to have the sa.me meaning as in the United Provinces Land ·Revenue Act, 1901. By s. 44, the Provincial Government was empowered to make rules for carrying out the purposes of the Act, a.nd in particular, amongst others," to prescribe the authority by ·whom and the place a.t which asseBBment shall be ma.de in the case of asseBBee having agricultural income in the jurisdiction of more than one assessing authority". By r. 18, cL l(a.), framed by the Government, in exercise of the powers under s. 44, it was provided, in so fa.r as it is material, that subject to sub-s. 2 of s. 14, an a.sseBBee shall ordinarily be assessed by ...... the Collector _oi_ the district in which he permanently resides. The State Government of Uttar Pradesh (the former United Provinces) by Notification dated June 8, 1953, appointed one K. C. Chaudhry under sub-s. l of s. 14(A) of the United Provinces La.nd Revenue Act III of 1901 to be the Additional Collector in district Bahra.ich and authorised him to exercise all the powers and perform a.ll the duties of a. Collector " in all classes of ca.sea". Cla.iming to exercise the authority of the Collector under s. 14 of Act III of 1949, the Additional Collector by order dated February 25, 1954, asseBBCd the aBBCssee's net agricultural income at Rs. 2,81,110-10-3 a.nd ordered him to pay Rs. 1,36,390-2-0 a.s agriculture.I inoome-ta.x a.nd super-ta.x. .... ##### ... ## ( ' _f_ \ l S.C.R. SUPREME COURT REPORTS 85 The validity of this order was challenged by the _r96o_ assessee by an application under Art. 226. of the _**The**_ _**State**_ _**of**_ Constitution presented before the High Co'!-rt of Judi- _Utt"'_ _Pradesh_ cature at Allahabad. The contention of the assessee & _Othm_ that the Additional Collector of Bahraich was not an v. authority competent by law to assess the agricultural _Raja_ _Syed_ income-tax under Act III of 1949 was upheld by the _s_ Moh~~'."":h _0_ High Court. The High Court issued a writ of. _certio-_ _aadat_ _' _0_ High Court. The High Court issued a writ of. _certio-_ _aadat_ _' _'_ _rari_ quashing the order of the Additional Collector, _Shah_ _1._ because in its opinion, where property of an assessee is situate in several districts, the Collector as the assessing authority under Act III of 1949 exercises "extra-territorial" jurisdiction, but as K. C. Chaudury, the Additional Collector was not invested with that extra-territorial jurisdiction, the impugned proceeding assessing agricultural income-tax was unauthorised. The State of Uttar Pradesh obtained from the High Court leave to appeal to this court against the order quashing the assessment. _.I_ #### ... On behalf of the State of Uttar Pradesh, it is urged that an Additional Collector by virtue of s. 14(A) of the United Provinces Land Revenue Act III of 1901, is competent to exercise all such powers and perform all such duties of a Collector in cases or classes of oases as the State Government may direct, and the State Government having invested Mr. Chaudhri the Additional Collector with authority to exercise all the powers and to perform all the duties of a Collector " in all cla.sses of cases", that officer could exercise the powers of the Collector under Act III of 1901, including, what the High Court called the "extraterritorial " powers. It is unnecessary to express any opinion on this argument, because the legislature of the State of Uttar Pradesh, has, since the judgment delivered by the High Court in this group of cases, amended the United Provinces Agricultural Incometax Act (U. P. Act III of 1949) by Act XIV of 1956, giving ret~ospective operation to the amending provisions. By the amendment, cl. 4 of s. 2 of the original Act has been substituted by two clauses, cl. 4 and cl. 4-a, and cl. 4-a enacts that the expression " Collector" shall have and shall be deemed always to have 86 SUPREME COURT REPORTS (1961] _'9_ _[60 ]_ the meaning as in the U. P. Land Revenue Act, 1901 _The_ _siatt_ _,,_ and will include an Additional Collector apJJointed _1_ _u11ar_ _J>radesh_ under the said Act. Bys. IO(l)(b), all orders ma.do, e,. _Others_ actions or proceedings taken, directions issued or v. jurisdictions exercised under or in accordance with _Ra1a_ _Syed_ the provisions of the Principal Act or of any rull' _Mohanm1ad_ f d h d - h d f _Saadat_ _Ali_ _hhan_ rame t ereun er prior to t. e amen mt>nt - t.hat Act are to be deemed always to be as good and valid _Shah_ _J._ in law as if the amending Act had been in force at all material dates. By B. IO, sub.s. l(a), of the amending Act, it is provided that in r. 18 of the U. P. Agricultural Income Tax Rules, l!J49, thA expression "Collector" shall be deemed to ha.vo included an Additional Collector: and it is enacted by sub-s. _2_ of that section that where any question arose as to the validity or legality of any assessment made by an Additional Collector in purported exercise of the powcrn under s. 14 or of the rules framed under cl. ·(o) of suh-s. 2 of s. 44 of Act III of 1949, the same shall he determined as if the provisions of this amending Act had been in force at all material dates. By the amending Act, the legislature has enacted in language which is clear and explicit that assessment proceedings held hy an Additional Collector who is invested with the powers of a Collector under Act III of 1901 shall be deemed 1>lways to have been properly taken. This court is seize<! of an appeal from the ordc1· of the High Court quashing the assessment on the ground that thl' Additional Collector had no extra..tNritori11l 'authority t.o assess agricultural income-tax. It is true that Act III of l!J49 was amended after the High Court delivered its judgment; but in dealing with this appeal, we arc bound to consider the amended law as it stands today (and which must be deemed to have so stood 11t all materi1tl times) and to give effect to it, having regard to tho clearly expressed intention of the legislature in thu ttmendcd provisions. Accordingly we hold that the Additional Collector was compet.ent to assess the liability of the assessee to pay agricultural income-tax and super-tax under the United Provinces Agricultural Income-tax Act llI of 1949. ## _(_ _1_ •\ For the a~sessee, it is contended that before the **1** S.C.R. SUPREME COURT REPORTS 87 High Court an application for review of judgment was _I96o_ submitted by the State Government under s. **11** of the _**The**_ _Stale_ _of_ amending Act, and the High Court having rejected _Uttar Pradesh_ that application and no further proceeding having been c-, _Others_ initiated in this court challenging the correctness of v. that decision, it is not open to us to set aside the judg- _Raja_ _Syed_ ment under appeal. In support of this plea, it is urged Mohamma~ . f, f . d . ] l _Saadat_ _Alt_ _Rhan_ t a an h t app 1wat10n or review o [, ] JU gment 1s t Je on y _ remedy available to a person aggrieved by a decision _Shah_ _1._ of a court or authority for rectification of an order inconsistent with the provisions of the amending Act, and if, for any reason, that application for review is not filed or is filed and rejected, it is not open to a court or authority exercising appellate powers against _ that decision to adjudicate the dispute in the light of the amending Act. Section **11,** in so far as it is material, provides : " Where before the commencement of this Act, any court or authority has, in any proceedings uuder the Principal Act, set aside any assessment made by an Additional Collector merely on the ground that the assessin~ authority had no jurisdiction to make the assessment, any party to the proceedings may, at any time, within ninety days from the commencement of the Act apply to the court or authority for a review of the proceedings in the light of the provisions of this Act, and the court or authority to which the application is made, shall review the proceedings accordingly ". Relying on s. **11,** the State of Uttar Pradesh, it is true did submit an application for review of the judgment of the High Court and the High Court rejected that application observing, "That section (s. **11)** applies however only to cases in which the assessment has been set aside in any proceedings under the Principal Act. In the cases before us, the assessment has not been set aside in any proceedings under the Principal Act but in exercise of the jurisdication vested in this court under Art. 226 of the Constitution. These three petitions are therefore not maintainable ............ ". We need express no opinion on the correctness of 88 SUPREM,E COURT REPORTS [1961] this view, because in our judgment, the contention of _The_ _State_ _of_ the a.ssessee that for setting a.side an adverse order _Ulla•_ _P•adesh_ inconsistent with the provi8ions of the amending Act 6- _Othm_ of 1956, a. proceeding for review under s. II isthe only v. remedy which is open to an aggrieved party, is with ;·~· Sye~ out force. A court of appeal, in an appeal properly Saad•~ ·;~·Khan before it, must give effect to the law a.sit stands if ### _(_ \ # . _Shah_ _]._ _**1960**_ _July_ _a8._ the law ha.a at some stage anterior to the hearing of the appeal been a.mended retrospectivelJ;. with the object of conferring upon the authority or tribunal of first instance from the order whereof the appeal is filed jurisdiction which it originally la.eked : and a. provision for review like the one contained in s. 11 of the a.mending Act does not affect the power of the appellate court to deal with the appeal iu the light of the a.mended law. In the view expreBSed by us, this appeal must be allowed. As the appellant succeeds relying on a. statute which was enacted after the date of the judgment of the High Court, we direct that there shall be no order as to costs. ###### "· THE STATE OF PUNJAB. (P. B. GAJENDBAGADKAR, K. N. WANCHOO, I I _Appeal allowed._ DALIP SlNGH M. HIDAYATULLAH, K. c. DAS GUPTA and J. C. SHAH, JJ.)