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PETITIONER: KHANDIGE SHAM BHAT AND OTHERS

       Vs.

RESPONDENT: THE AGRICULTURAL INCOME TAX OFFICER

DATE OF JUDGMENT: 29/08/1962

BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. SINHA, BHUVNESHWAR P.(CJ) SHAH, J.C. AYYANGAR, N. RAJAGOPALA MUDHOLKAR, J.R.

CITATION:  1963 AIR  591            1963 SCR  (3) 809  CITATOR INFO :  R          1963 SC 630  (28)  R          1964 SC 370  (10,11)  F          1967 SC1458  (23)  RF         1967 SC1895  (23)  RF         1969 SC 378  (3,4)  RF         1970 SC1133  (18,32)  R          1972 SC 828  (20,34)  R          1972 SC 845  (14,15)  R          1973 SC1034  (18A)  R          1974 SC 497  (21)  R          1974 SC 849  (9)  R          1975 SC1234  (25)  F          1980 SC 271  (34)  R          1980 SC 959  (4)  R          1980 SC 959  (4)  R          1980 SC1382  (75)  R          1983 SC 634  (21)  R          1988 SC2062  (14)

ACT: Agricultural  Income tax - Temporary amendment of  enactment consequent    on   reorqanisation   of    States-Territorial classification    in    defining    previous    year.     If discriminatory--Mode  of ascertaining rate - If  reasonable- Kerala  Agricultural  Act,  1950 (Kerala  22  of  1950),  as amended by Kerala Act 11 of   1959,  s.2A  Constitution   of India, Art 14.

HEADNOTE: This  petition challenged the constitutional validity of  s. 2A  of  the  Kerala Agricultural Income  Tax  Act,  1950  as amended  by  Kerala Act II of 1959, tinder which  the  peti- tioner  was  assessed  to agricultural income  tax,  on  the ground   that   the  section  infringed  Art.  14   of   the Constitution.   Under tile States Reoganisation  Act,  1956, Kasargod  Taluk  where the petitioner had  his  agricultural land and which was in the State of Madras, became a part  of the Malabar District of the State of Kerala when that  State came  into  being on November 1, 1956.   By  the  Travancore

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Cochin  Agricultural Income Tax (Amendment) Act,  1957,  the State  Legislature extended the earlier Act of 1950  to  the erstwhile Madras areas.  But the Kerala High Court held that agricultural  income in such areas could not be assessed  to tax for the assessment year 1957-1958 whereas similar income in  other  areas of the State remained liable  to  tax,  the income  accrued between November 1, 1. 1956, and  March  31, 1957, i.e. after the Madras areas became part of the  Kerala State,  could  not also be taxed.  In order to  remedy  this anomalous  position brought about by the  reorganisation  of States  the Kerala State Legislature inserted  the  impugned section in the original Act, which provided as follows,- "Notwithstanding anything contained in cl. (G) of Section 2, "previous  years" for the assessment for the financial  year commencing from the 1st day of April 1958 and so far as such assessment  relates to the agricultural income derived  from lands  situated  in  the Malabar  District  referred  to  in subsection  (2)  of section 5 of the  States  Reorganization Act,  1956  (Central  Act 37 of 1957), shalt  be  the whole period 810 commencing  on the 1st day of November, 1956 and  ending  on the  31st  day of March, 1958, or, if the  accounts  of  the assessed have been made up to a date within the fincial year ending on the 31st day of March 1958, then at the option  of the assessee, the period commencing on the 1st day of Novem- ber,  1956, and ending on the aforesaid date to  which,  the accounts have been so made up: provided that - (i)  notwithstanding anything continued in section 3 and 56, the agricultural income tax and super tax chargeable on  the total  agricultural income of the previous year as  reckoned in  this  section shall be at the rates  applicable  to  the ’average  annual  income’ according to  the  Schedule;  such average  annual  income’ shall be an amount bearing  to  the aforesaid  total agricultural income the same proportion  as the  period  of  twelve months bears to the  period  of  the previous year as defined in this section; and (ii) the limit of exemption from chargeability to tax  shall be determined with reference to the average annual income." It  was urged on behalf of the petitioners that  classifica- tion  of  the  State into two parts  i.e.  Madras  area  and Travancore  area  made  by the  impugned  provision  had  no rational  relation  to  the  object  of  the  Act  and   was discriminatory  and that the basis adopted for  ascertaining the rate of tax was arbitrary and unreasonable. Held, that the contentions must fail. In order to judge whet her a law was discriminatory what had primarily to be looked into was not its phraseology but  its real  effect.  If there was equality and  uniformity  within each group, the law could not be discriminatory, though  due to  fortuitous  circumstances in a peculiar  situation  some included in a class might get some advantage over others, so long  as  they were not sought out  for  special  treatment. Although  taxation laws could be no exception to this  rule, the  courts  would, in view of the  inherent  complexity  of fiscal  adjustment  of  diverse elements,  permit  a  larger discretion  to  the Legislature in the matter  of  classifi- cation  so  long  as  there  was  no  transgression  of  the fundamental   principles   underlying   the   doctrine    of classification.   The power of the Legislature  to  classify must necessarily be wide  811 and  flexible  so as to enable it to adjust  its  system  of taxation in all proper and reasonable ways.

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Shri  Ram  Krishna Dalmia v. Shri Justice  S.  R.  Tendolkar [1959]  S.C.R.  287 Purshottam Govindji Halai v.  Shree  B.M Desai,  [1955]  2 S.C.R 887 and Kunnathat  Thathunni  Moppil Nair v. State of Kerala, [1961] 3 S.C.R. 77, referred to The  object of the classification made in the definition  of ’previous  year’ by the impugned section was not to  discri- minate against the agriculturists of the Madras area but  to remove the difference that existed between them and those of the other areas of the State, due to historical reasons,  by im.  posing the tax on the assessees in the Madras area  for the period November 1, 1956, to March 31, 1957.  There could therefore,  be no doubt as to the existence of a  reasonable nexus  between  the  classification and the  object  of  the legislation. It  was  not correct to say a law based on  geographical  or territorial  classification could be constitutionally  valid only if it was a preexisting Act, and not if it was  enacted after the merger.  The law might be a preexisting law or one enacted  after merger.  The validity of  classification  did not  wholly  depend  on the source of law but  also  on  the circumstances  that prevailed in the two parts  merged  into one by historical events. Shri  Kishan Singh v. State of Rajasthan,[1955] 2 S.   C.  R 531 and Purshottam Govindji Halai v. Shri B.M. Desai, [1953] S.C.R. 887. referred to. Nor was it correct to say that the mode of the  ascertaining the average annual income for fixing the rate was  arbitrary and  unreasonable.   Although  a taxation law  was  as  much subject to Art. 14 of the constitution as any other law, the court  would not for obvious reason meticulously  scrutinize the impact of its burden on different persons or classes and would not strike down the law on the ground that not the one but  another method of assessment should have been  adopted, unless  it was convinced that the method adopted was  capri- cious, fanciful, arbitrary or clearly unjust. Although no Act, permanent or temporary, could violate  Art. 14, the fact that the impugned legislation was to enure  for a year to tide over the situation, must have some bearing in judging  the  reasonableness of the method selected  and  it could not be struck down as unreasonable on the ground  that there was better alternatives. 812

JUDGMENT: ORIGINAL JURISDICTION : Writ Petition No. 103 of 1961. Petitions  under  Art. 32 of the Constitution of  India  for enforcement of Fundamental Rights. G.   S. Pathak and R. Gopalakrishnan, for the petitioners. H.   N.  Sanyal, Additional Solicitor-General of  India  and Sardar Bahadur, for the respondents. 1962.   August 29.  The Judgment of the Court was  delivered by SUBBA RAO, J.-These two petitions filed under Art. 32 of the Constitution  by different parties are directed against  the Agricultural Income-tax Officer, Kasaragod, and the State of Kerala,  for  a  declaration  that  s,  2A  of  the   Kerala Agricultural Income-tax Act, 1950, as amended by Kerala  Act 11  of  1959,  (hereinafter  referred  to  as  the  Act)  is constitutionally  void  and  for  quashing  the  orders   of assessment made by the first respondent pursuant to the said provision- As it is common case that the decision in the first petition would  govern the second one, it would suffice if the  facts

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in the first petition were given. Kasaragod  Taluk,  wherein  the agricultural  lands  of  the petitioner’s family are situate, formed part of the district of  South  Kanara  in the Madras State.   Under  the  States Reorganization Act, 1956 (Central Act 37 of 1956) the Kerala State  comprising the following territories was formed:  (a) the territories of the existing State of  Travancore-Coching excluding the territories transferred to the State of Madras by  Section  4;  and (b) the territories  comprised  in  (i) Malabar  District,  excluding the islands of  Laccadive  and Minicoy, and (ii) Kasaragod Taluk of South  813 Kanara District.  Under the Act the territories comprised in Kasaragod Taluk of South Kanara District and the District of Malabar in the Madras State were constituted into a separate district  known  as  the Malabar District in  the  State  of Kerala.   For convenience of reference we shall  hereinafter describe  the territories carved out of the Madras State  as Madras  area and the rest as T-C area.  After the  formation of  the  State of Kerala on November 1, 1956,  the  laws  in force  in the State of Madras were continued in  the  Madras area and those in force in the Travancore-Cochin State  were continued  in the T.C. area.  In the T.C. area  agricultural income  was  liable  to  tax  under  the   Travancore-Cochin Agricultural  Income-tax  Act (22 of 1950) which  came  into force  on April 1, 1951.  After the formation of the  Kerala State, the Legislature of that State enacted the Travancore- Cochin   Agricultural  Income-tax  (Amendment)  Act,   1957. Whereunder  the  earlier  Act of 1950 was  extended  to  the Madras area with appropriate amendments.  Under the said Act agricultural  income derived from lands situated  throughout the  State  of  Kerala became assessable  with  effect  from assessment year 1957 58.  Pursuant to the provisions of that Act the Income-tax authorities started proceedings to assess the  income derived from lands situated in the  Madras  area for  the  year 1957-58, On a petition filed by some  of  the assessees,  the  Kerala High Court held that  the  State  of Kerala  had no authority to levy tax on agricultural  income which  accrued before November 1, 1956, from lands  situated in the Madras area and that the assessments for 1957-58 were not  sustainable  under the Act even in  respect  of  income which  arose after November 1, 1956, on the ground that  the previous  year,  as defined under the Act, was a  period  of twelve  months  ending on March 31, preceding the  year  for which assessment was to be 814 made.   The  result of the decision  was  that  agricultural income  derived  from  lands in the Madras  area    was  not liable  to  tax  for the assessment  year  195768.,  whereas similar income from agricultural lands situated in the  T.C. area  was liable to tax, indeed, the income accrued  between November  1,  1956, and March 31, 1957, i.  e.,  the  income accrued  after  the Madras area became part  of  the  Kerala State,  also  could not be taxed.  To remedy  the  situation brought about by historical reasons in the two  geographical parts  of  the  Kerala  State,  the  Government  of   Kerala promulgated on January 12, 1959 the Agricultural  Income-tax (Amendment)  Ordinance 11 of 1959.  Subsequently the  Kerala Legislature  passed the Agricultural Income-tax  (Amendment) Act 11 of 1959 replacing the earlier Ordinance,  hereinafter called the Amending Act. Before the Amending Act was passed,, the petitioner, who has lands in different villages in Kasaragod Taluk, submitted  a return  of the income of his family for the assessment  year 1957-58,  and  on June 30, 1958,  the  concerned  Income-tax

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Officer  determined  the  petitioner’s net  income  for  the accounting period April 1, 1956, to March 31, 1957, and  the tax payable thereon.  The petitioner preferred an appeal  to the  Assistant  Commissioner  of  Agricultural   Income-tax, Kozhikode,  against  the  order of  the  Income-tax  Officer questioning  the said assessment on the ground, inter  alia, that the assessment was made arbitrarily.  When that  appeal was  pending,  the  judgment of the Kerala  High  Court  was delivered   and  subsequently  Ordinance  II  of  1959   was promulgated.   The  Assistant Commissioner,  therefore,  set aside  the order of the Income-tax Officer on the  basis  of the  decision  of  the Kerala High Court  and  remanded  the matter to the Agricultural Income. tax Officer for  disposal in  accordance with law.  After remand, on March  23,  1959, the Income-tax  815 Officer  issued  a notice to the petitioner  to  submit  his return of agricultural income for the assessment year  1957- 58  in accordance with the provisions of the  Ordinance  and the  subsequent Amending Act replacing the  said  Ordinance. On November 10, 1960, the Income-tax Officer determined  the net income of the petitioner for the assessment year 1958 59 at Rs. 87,745.36 and assessed the tax at Rs. 21,920.41;  the tax  was calculated on the average net annual income of  the petitioner  for 12 months under the proviso to s. 2A of  the Act.   The petitioner seeks to set aside that assessment  on the  ground  that  the said section offends  Art-14  of  the Constitution and therefore the assessment was bad. Mr. Pathak, Learned counsel for the petitioner, argues  that the classification of Kerala State into two parts, i.e., the Madras  area and the T-C area, has no rational  relation  to the  object of the Act, namely, imposition  of  agricultural income-tax, for., as the two parts belong to the same State, no  post-amalgamation  law can treat assessees of  the  same State  differently  in the matter of taxation.   He  further contends  that there is discrimination between assessees  of Kasaragod  Taluk and those of the other part of  the  Madras area  inasmuch as under s.2A of the Act the  average  annual income  would be the average annual income of 12 months  out of  17  months,  with  the  result  that  the  assessees  of Kasaragod  Taluk whose entire income accrued after  November 1,  1956, were unjustly discriminated from assessees of  the other  part  of the Madras area whose  income  accrued  only before November 1, 1956.  He also contends that in any  view the  basis adopted for ascertaining the rate  was  arbitrary and  unreasonable as 24 months’ income was taken  as  income for 17 months. 816 Learned  Additional  Solicitor General, on the  other  hand, seeks  to  sustain  the assessment on the  ground  that  the classification was based on historical reasons, that on  the face  of the Act all the assessees falling within the  class to  which s.2A applies are treated alike, that the State  is entitled  to  adopt  one of the  many  modes  available  for ascertaining  the rate, that whatever basis is  adopted  for ascertaining  the rate there is bound to be some hard  cases and that circumstance cannot conceivable affect the validity of the law. At  the outset it would be convenient to notice briefly  the law  on  the  doctrine of classification.  The  law  on  the subject is well settled and it does not require  restatement in  extenso.  It would suffice if we noticed the  principles relevant  to  the  enquiry.  The law  has  been  neatly  and succinctly  summarized  in Shri Ram Krishna Dalmia  v.  Shri Justice S. R. Tendolkar (1) thus:

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             "It is now well established that while article               14  forbids  class legislation,  it  does  not               forbid   reasonable  classification  for   the               purposes  of legislation.  In order,  however,               to pass the test of permissible classification               two conditions must be fulfilled, namely,  (i)               that the classification must be founded on  an               intelligible differential which  distinguished               persons  or things that are  grouped  together               from  others left out of the group  and,  (ii)               that differentia must have a rational relation               to  the  object sought to be achieved  by  the               statute  in question.  The classification  may               be   founded  on  different   bases,   namely,               geographical,  or  according  to  objects   or               occupations or the like.  What is necessary is               that  there must be a nexus between the  basis               of classification and the object of the               (1)   [1959] S.C.R. 279.296-297.                817               Act  under  consideration.  It  is  also  well               established  that article 14 condemns  discri-               mination  not  only by a substantive  law  but               also by a law of procedure." Though a law ex facie appears to. treat all that fall within a class alike, if in effect it operates unevenly on  persons or property similarly situated, it may be said that the  law offends  the equality clause.  It will then be the  duty  of the  court to scrutinize the effect of the law carefully  to ascertain  its  real  impact  on  the  persons  or  property similarly situated.  Conversely, a law may treat persons who appear   to  be  similarly  situated  differently;  but   on investigation  they  may  be  found  not  to  be   similarly situated.    To  state  it  differently,  it  is   not   the phraseology of a statute that governs the situation but  the effect  of the law that is decisive.  If there  is  equality and  uniformity  within  each group, the  law  will  not  be condemned  as discriminative, though due to some  fortuitous circumstance  arising  out  of  a  peculiar  situation  some included in a class get an advantage over others, so long as they  are not singled out for special  treatment.   Taxation law  is not an exception to this doctrine : vide  Purshottam Govindji Halai v. Shree B. N. Desai, Additional Collector of Bombay  (1) and Kunnathat Thatunni Moopil Nair v.  State  of Kerala  (2).  But in the application of the principles,  the courts,  in  view  of  the  inherent  complexity  of  fiscal adjustment  of diverse elements, permit a larger  discretion to the Legislature in the matter of classification, so  long it adheres to the fundamental principles underlying the said doctrine.   The power of the Legislature to classify  is  of "wide  range  and  flexibility" so that it  can  adjust  its system of taxation in all proper and reasonable ways. (1) [1955] 2 S.C.R. 887.  (2) [1961] 3 S.C.R. 77. 818 Now  Let us look at the impugned section. Section 2A of  the Act reads :               "Notwithstanding anything contained in  clause               (0)  of  section 2, "previous  year"  for  the               assessment  for the financial year  commencing               from  the 1st day of April 1958 and so far  as               such  assessment relates to  the  agricultural               income  derived  from lands  situated  in  the               Malabar  District referred to  in  sub-section               (2) of-section 5 of the States  Reorganization               Act,  1956 (Central Act 37 of 1956), shall  be

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             the whole period commencing on the 1st day  of               November,  1956 and ending on the 31st day  of               March,  1958,  or,  if  the  accounts  of  the               assessee  have been made up to a date  ’within               the  financial year ending on the 31st day  of               March  1958,  then,  at  the  option  of   the               assessee, the period commencing on the 1st day               of November, 1956 and ending on the  aforesaid               date to which, the accounts have been so  made               up :               Provided that -               (i)   notwithstanding  anything  contained  in               sections 3 and 56, the agricultural income-tax               and   super-tax   chargeable  on   the   total               agricultural  income of the previous  year  as               reckoned in this section shall be at the rates               applicable  to  the  "average  annual  income"               according  to  the Schedule  ;  such  "average               annual  income" shall be an amount bearing  to               the  aforesaid total agricultural  income  the               same proportion as the period of twelve months               bears  to the period of the previous  year  as               defined in this section ; and                                    819               (ii)  the    limit    of    exemption     from               chargeability to tax shall be determined  with               reference to the "average annual income". The  Malabar District in the state of Kerala is  constituted by  combining Kasaragod Taluk of the South  Kanara  District and  the District of Malabar of the Madras State.   For  the purpose  of  assessment for the financial  year  1958-59  in respect  of  agricultural  income  derived  from  the   said district,  s.  2A of the Act gives a special  definition  of "previous  year".   Under that definition,  "previous  year" commences from November 1, 1966 and ends on March 31,  1958, i.e.,  a period of 17 months ; but the assessee can elect  a lesser period as "previous year" if his accounts are made up to  a  date within the financial year ending  on  March  31, 1958,  that is to say he can elect any date commencing  from April  1, 1957, to March 31, 1958, if his accounts are  made up to that date in which case the "previous year" so for  as he is concerned will commence from November 1, 1956, and end on  the  said  date so chosen by him.  The  proviso  to  the section prescribes a mode of ascertaining the rate of tax in regard to the said income : it lays down that in respect  of the  said  income  the rates are  those  applicable  to  the ",average  annual  income" according to the  Schedule.   The "average annual income", as defined in the proviso, will  be twelve-seventeenths of the total income of the previous year as defined in the sections Under the section, therefore, the assessee   in  the  Madras  area  will  be  liable  to   pay agricultural income-tax on the income accrued to him  during the  17 months commencing from November 1, 1956, and  ending on  March  31, 1958, but the rate of tax payable by  him  is that applicable to the "average annual income " so  defined. The  question is whether this section infringes Art.  14  of the constitution or whether it can be justified on the basis of the 820 doctrine  of classification.  In the narration of  facts  we have  stated why it became necessary for the Legislature  to insert  s.2A  in Act 22 of 1950.  By reason  of  the  States Reorganization Act, the said Madras area became part of  the Kerala State on November 1, 1956.  By reason of the decision of the Kerala High Court, agricultural income-tax could  not

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be imposed in respect of income accrued to assessees in  the Madras  area between April 1, 1956, and March 31, 1957,  and it  was also not possible to tax them for their income  even for that part of the year after it became part of the Kerala State: with the result, the legislature was confronted  with two  geographical divisions in respect of one of  which  the said  law of agricultural income-tax could not  be  enforced while  the  a ssessees  in  the  T-C  area  were  liable  to agricultural income-tax in regard to their income from their lands for the year commencing from April 1, 1956, and ending on  March 31, 1957, the income of the agriculturists in  the Madras  area could not be reached by that law in respect  of the  whole or part of that year.  These differences  between the two parts of the State which originated from  historical reasons were the basis of classification for the purpose  of taxation.  The object of’ making the classification was  not to  discriminate  against the agriculturists of  the  Madras area  but  to bring them into line with  the  agriculturists from the rest of the Kerala State in so far as the liability to pay agricultural income-tax was concerned.  The  existing law  bad therefore to be appropriately adapted for  securing this end.  In these circumstances, can it be said that there was  no reasonable nexus between the classification and  the object  of the legislation?  The object of  the  legislation thus  was to impose agricultural income-tax on assessees  in the  Madras area and also in respect of the  period  between November  1,  1956, and March 31, 1957, which could  not  be done under preexisting law.  The 821 differences  between  the  two  parts  of  the  State   have reasonable  nexus to the said object.  Because of  the  said differences  the legislature thought that the definition  of "Previous  year"  should  be so amended in  respect  of  the Madras  area that the assessees in that area may not  escape payment of agricultural income-tax in respect of the  period after the said area formed part of the Kerala State.  It  is argued that this Court sustained the constitutional validity of  a  law on geographical and territorial bases only  in  a case  where  the  said  law was  a  preexisting  law  in  an erstwhile  State  which continued to be law in the  area  of that  State after it merged in the larger unit, and that  it cannot  be  invoked  where the law is  for  the  first  time enacted after the merger, for, it is said, in that event the law governs the new State as an indivisible unit.   Reliance is  placed  upon the decision of this Court in  Shri  Kishan Singh  v, The State of Rajasthan(1) and Purshottam  Govindji Halai  v. Shree B.M. Desai, Additional Collector  of  Bombay (2).   But a perusal of the Judgments does not bear out  the contention.  The validity of classification does not  wholly depend upon the source of law; the law may be a  preexisting law or one that was enacted after merger.  What is important is to ascertain the existing circumstances in the two  parts merged  into one by historical events in order to  determine whether  the differences between the two have  a  reasonable nexus  to  the  object of the said  law.   For  the  reasons already  stated,  we  hold that the  classification  in  the present  case  is  founded on  an  intelligible  differentia between  the  assessees of the two parts of the  State,  and that the said differences have rational relationship to  the object of the Amending Act. But  it  is said that the mode of ascertaining  the  average annual income for the purpose of finding the (1) [1955] 2 S.C.R. 531. (2) [1955] 2 S.C.R. 887. 822

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rate  is arbitrary and unreasonable and that  discrimination is  inherent in such a law adopting such arbitrary  process. This  argument is elaborated thus: The major income  of  the petitioner’s  family is from arecanut, pepper and  cocoanut; the  said crops are gathered between the months of  November and  March; the season for harvesting arecanut in  Kasaragod Taluk is from November to March; the whole year’s pepper and cocoanut  are  gathered between the months  of  January  and March;  therefore,  the  income from  arecanut,  pepper  and cocoanut accrued to the petitioner between November 1,  1956 and  March 31, 1957, is the income for the entire year;  but under  the proviso to s. 2A of the Act, the said  income  is treated  as  the income for 5 months only, with  the  result that 24 months’ income is treated as 17 months’ income; this is an arbitrary assumption underlying the provision; instead it  should  have taken 12/24th of the total  income  as  the average annual income.  This arbitrary method of fixing  the average annual income involved the payment of higher rate of tax  by the assessees in Kasaragod Taluk as compared to  the assessees in other parts of the State.  It is suggested that a  more  reasonable  course  would  have  been  to  tax  the assessees in the Madras area for the income that accrued  to them during the 5 months by treating the said income as  the income  for the entire year commencing from April  1,  1956, and  ending  on March 31, 1957, and that in that  event  not only their income for the said period could not have escaped taxation but it would have also avoided the unjust treatment meted  out  to them in the rate of tax.  Prima  facie  there appears  to  be some plausibility in this  argument;  but  a closer examination discloses that though the method  sugges- ted  may have been better than the method actually  adopted, the  hardship  in individual cases cannot in  any  event  be avoided.  It is true taxation law cannot                             823 claim immunity from the equality clause of the Constitution. The  taxation  statute  shall  not  also  be  arbitrary  and oppressive,  but  at  the same time the  court  cannot,  for obvious  reasons, meticulously scrutinize the impact of  its burden  on different persons or interests.  Where  there  is more  than one method of assessing tax and  the  Legislature selects one out of them, the court will not be justified  to strike  down  the  law on the ground  that  the  Legislature should have adopted another method which, in the Opinion  of the  court, is more reasonable, unless it is convinced  that the  method  adopted is capricious, fanciful,  arbitrary  or clearly  unjust.   From the standpoint of the test,  let  us look  at  the impugned legislation.  The taxability  of  the income accrued during the 5 months is not in question.   But the   attack  is  on  the  manner  in  which  the  rate   is ascertained.   The statute does not fix different rates  for the  two  areas.   The rate is the  same  though  it  varies uniformly  depending upon the different slabs of the  annual income of theprevious year. The vice  of the provision,if at all, lies in the mode of ascertaining the average  annual income of the previous year and it is true that if the  said mode  is arbitrary, the same arbitrariness would  attach  to the  rate.   But  the rate must necessarily  relate  to  the annual income of ,he previous year.  Diverse methods may  be adopted  by the Legislature to ascertain the  annual  income for  fixing the rate, namely : (1) 12/17 of total income  of the 17 months ; (2) the 5 months’ income being treated as 12 months’ income and the annual average income ascertained  as 12/24th  or half of the total income accrued during  the  17 months; (3) it may adopt the first 12 months’ or the last 12 months or the middle 12 months’ income as the annual  income

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; and (4) treating the 5 months’ income as 12 months’ income and separately taxing it without clubbing it with the income of the subsequent year.  Whatever 824 method  is  adopted, there is bound to be hardship  in  some cases  and  advantage in others.  For  instance,  under  the Agricultural  Income-tax  Act assessees  getting  an  income below  Rs.  3,000/- are exempted from taxation.   Under  the impugned section the limit for exemption from taxation shall be  determined with reference to the average annual  income. Suppose the annual income for the 12 months commencing  from April  1, 1957, and ending on March 31, 1958, is  above  Rs. 3,000/-  ; the assessees in the T-C area would be liable  to pay income-tax, but a particular assessee in the Madras area may  have earned comparatively smaller income during  the  5 months  bringing  down the average annual income  below  Rs. 3,000/- and he escapes assessment altogether.  Assume  again that  the assessee gets more than Rs, 3,000/- daring  the  5 months  ;  but  he  may have got  very  low  income  in  the succeeding 12 months with the result that his annual average income may fall below the range of taxable income, while the assessee  in the T-C area, who has got a similar income  for 1956-57,  would be liable to tax.  It is also true  that  if the assessee in the Madras area gets very high income during those  5  months  and little less than  the  taxable  income during  the  succeeding 12 months, his income,  which  would have  escaped  taxation,  would be  liable  to  tax.   These illustrations prove that the section does not always work to the  disadvantage of assessees similarly situated  like  the petitioner,  but  its effect would  depend  upon  fortuitous circumstances, such as the quantum of income accrued  during the  5  months and during the succeeding  12  months.   That apart  under the section an option is given to the  assessee to  select his accounting year commencing from  November  1, 1956, and ending on a date within March 31, 1958, upto which his  accounts  have been made.  If an agriculturist  in  the Malabar area had made up his accounts on a date which                             825 does not exceed a period of 12 months from November 1, 1956, he  cannot  have any complaint on the score  that  the  rate fixed  is arbitrary.  But it is said that agriculturists  in the  Madras area do not keep accounts or at any  rate  would not have kept accounts before the Amending Act and therefore this  argument  is not realistic.  But the record  does  not disclose that agriculturists of Malabar area dealing in cash crops, like arecanut, do not keep accounts or make up  their accounts  on  a particular date.  Anyhow, the law  gives  an option  to agriculturists to adopt an alternative method  in case  the rate fixed on the basis of average  annual  income would be disadvantageous to them.  The fact that they do not keep such an account could not be an argument to support the arbitrariness  of the legislation.  But these advantages  or disadvantages  to  individual assessees are  accidental  and inevitable  and are inherent in every taxing statute  as  it has to draw a line somewhere and some cases necessarily fall on  the  other side of the line.  That  apart,  the  tabular statements  showing the area order the principal  crops  and their  harvesting and marketing seasons in the Kerala  State does  not establish that in Kasaragod Taluk the entire  crop of the year was harvested after November and in the rest  of Kerala  before November.  The following is the  said  state- ment: 826                 T. C. area      Crop       6 -Districts

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                (in acres)      Paddy       9,07,108      Tapioca     4,89,884      Cocoanut    7,74,667      Arecanut    50,534      Cardaraon   65,879      Pepper      87,216      Tea         78,043      Coffee      5,198      Rubber      2,10,703      Lemongrass  35,000      MADRAS AREA    Total area      - - - - - - - - - - - - - -   for      Palghat Calicut Cannanore     Kerala State      (in acres)     (in acres) 4,67,5442,77,9232,46,22918,98,804 8,45540,13414,8245,53,207 45,4492,36,2951,19,01411,75,425 17,29235,23620,7711,23,833 4,2842,60099373,756 8,44931,58596,6662,23,916 1,4599,8013,68592,988 4,90926,7873,16640,060 10,10435,60014,2192,70,626 4,50050040,000 827 Crop                  Harvestiag               Marketing                        Season                   Season Paddy             Autumn, August            September to                     to October.             October.                   Winter: December          January to                   to February:              February.                   Summer : -               March to April.                   February to              March. Tapioca          November to              Dec. to Feb. &                  June & July              July to Aug.                  to Aug. Cocoanut Arecanut        1. Travancore-           June to Nov.                     Cochin               Nov. to March                  2. S. Malabar          June to November                  3. N. Malabar          Nov. to March Cardamon            August to              October to                     December               January Pepper            November to             December to                     January                February Tea Coffee            November to             September to                     March                    April Rubber Lemongrass      Juno to September         September 828 It shows that in Cannanore, which includes Kasaragod  Taluk, only arecanut, popper, tea, coffee and rubber are  harvested after  November, but in the case of paddy,  tapioca  coconut and  lemongrass the harvesting season is before  November  ; cardamon is gathered partly before November and partly after November.  The same is the position in regard to the  entire State  except  in respect of arecanut ; even in  respect  of arecanut,  it  is harvested in the Madras  area  other  than Cannanore before November.  The net result of this  analysis is  that in regard to a large extent of land  cultivated  in Kerala  the harvesting season is the same in respect of  all the  crops except arecanut and even in the case of  arecanut out  of  1,23,833  acres  cultivated  with  that  crop   the

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harvesting season in regard to 20,771 acres alone  commences after November.  In such a situation it cannot be said  that the Legislature has arbitrarily, with an evil eye,  selected the  most advantageous period for the purpose of fixing  the rate  of  taxation.  The said discussion leads to  the  only conclusion  that the Legislature in its sincere  attempt  to meet  a difficult situation made a law adopting one  of  the diverse  methods  open  to it and even  the  method  adopted cannot  be said to be either unreasonable or  arbitrary,  as the  overall picture indicates that it works fairly well  on all  similarly situated, though some hardship may be  caused to  some  in the implementation of the law which  is  almost inevitable in every taxation law.  We cannot, therefore, say that  in the present case the one method adopted instead  of another is either arbitrary or capricious. The  next argument is that there is  discrimination  between assessees  in  Kasaragod area and those in the rest  of  the Madras area in that in the case of arecanut the assessees of Madras  area,  other  than Kasaragod Taluk, would  be  in  a better position as they gather their crops before  November. The                             829 assessees of the Madras area under the Act formed one  class and  s.  2A applies to all of them : s. 2A applies  to  both parts  of the Madras Area, i. e., the Malabar area  and  the South  Kanara  area.  In both the cases the  income  of  the assessees  that  accrued  before November 1,  1956  was  not taxable;   in  both  the  cases  the  income  that   accrued thereafter  is  liable to tax.  The rate also is  the  same. The  statement  only  shows  that  all  the  crops,   except arecanut,  are gathered by the assessees of the entire  area during the same period.  The fact that in the case of one of the  crops  the  assessees in  the  Malabar  area  harvested earlier cannot be a ground for holding that the law has made an  unjust discrimination between persons belonging  to  the same  class,  but  that  is  due  only  to  the   fortuitous circumstance  of some assessees gathering the crops  earlier than  others.  As we have pointed out, the arecanut crop  is only  one of the many crops in that area and the  extent  of its  cultivation in Kasaragod Taluk is comparatively  lesser than that in the entire area of the State or even the Madras area.  We cannot, therefore, say that the law made an unjust discrimination between persons belonging to the same class. There  is  another aspect which may have a  bearing  on  the question  raised.   The  impugned  section  is  a  temporary provision intended to apply only for one year to tide over a difficult  situation brought about by the reorganization  of States.  It is true that every law, whether it is  temporary or  permanent, cannot infringe Art. 14 of the  Constitution; but  in  considering the question of reasonableness  of  the legislation  this  circumstance  will  have  some   bearing, particularly  when the legislature Selected one of the  many methods  open to it.  Though the method selected may not  be as  good as others, we cannot hold that it  is  unreasonable and, therefore, liable to be struck down. 830 In the result the petition is dismissed with costs. It  is common case that this decision will govern the  other petition  also, namely, Writ Petition No. 104 of 1961.   The said  petition also is dismissed with costs.  There will  be one set of hearing fee.  This order is without prejudice  to the order for costs made on 16-3-1962. Petitions dismissed.

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