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PETITIONER: THE STATE OF UTTAR PRADESH AND OTHERS

       Vs.

RESPONDENT: RAJA SYED MOHAMMAD SAADAT ALI KHAN.

DATE OF JUDGMENT: 28/07/1960

BENCH: SHAH, J.C. BENCH: SHAH, J.C. DAS, S.K. HIDAYATULLAH, M.

CITATION:  1960 AIR 1283

ACT: Agricultural   Income-tax--Additional  Collector--Power   of Assessment--Amending  Act  giving  retrospective  effect  to amended  Provisions--Provision for review in  the  amendment Act--If  affects  the  powers of  the  appellate  court--The United  Provinces Agricultural Income-tax Act, 1949 (U.   P. III of 1949)--United Provinces Land Revenue Act, 1901  (U.P. III of 1901).

HEADNOTE: 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  super-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 authorities within their respective revenue jurisdiction  and the expression " 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 assessee 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 Uttar  Pradesh appointed  Mr. K. C. Chaudhry under subS. 1 of S.  14(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 83 powers  of a Collector under S. 14 of the  United  Provinces Agricultural  Income-tax  Act of 1949 he  assessed  the  net agricultural  income  of  the  assessee  who  owned   landed property in two districts, namely, Bahraich and Kheri in the State of Uttar Pradesh, at 12,81,110-10-0 and ordered him to pay  Rs. 1,36,390-2-0 as agricultural income-tax and  super- tax.   The  validity  of this order was  challenged  by  the assessee in the High Court by an application under Art.  226 of the Constitution and the High Court quashed the order  of the  Additional  Collector holding that he had no  "  extra-

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territorial  "  jurisdiction  which  was  exercised  by  the Collector  as  the assessing authority in  cases  where  the property  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  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.  11  of  the amending Act for review of its judgment but it was  dismiss- ed. 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 the law had been amended with  retrospective effect conferring on an authority or tribunal from the order whereof   the  appeal  is  filed,  jurisdiction   which   it originally lacked. The power of the appellate court to deal with the appeal  in accordance of the amended law is not affected by a provision for review as contained in s. 11 of the Amending Act.

JUDGMENT: 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 Misc.  Application No. 59 of 1954. C.   B.  Agarwala,  C.  P. Lal and G. N.  Dikshit,  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 SHAH’  J.-Raja  Syed  Mohammad Saadat  Ali  Khan,  who  will hereinafter be referred to as " the assessee ", is the owner of Taluqa Nanpura in district Bahraich and Taluqa  Mohammadi in  district  Kheri,  in the State of  Uttar  Pradesh.   The legislature  of  the  United Provinces  enacted  the  United Provinces  Agricultural  Income-tax Act, Act  III  of  1949, authorising  imposition  of  a tax  on  agricultural  income within the State.  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  same  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,  and in particular, amongst others, " to prescribe  the authority by whom and the place at which assessment shall be made  in the case of assessee having agricultural income  in the  jurisdiction of more than one assessing authority "  By

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r.  18, el. 1(a), framed by the Government, in  exercise  of the powers under s. 44, it was provided, in so far as it  is material,  that  subject to sub-s. 2 of s. 14,  an  assessee shall  ordinarily be assessed by...... the Collector of  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.  1 of s. 14(A) of  the  United Provinces Land Revenue Act III of 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  authority of the Collector tinder s. 14 of Act  III  of 1949,  the Additional Collector by order dated February  25, 1954, assessed the assessee’s net agricultural income at Rs. 2,81,110-10-3  and  ordered him to pay Rs.  1,36,390-2-0  as agricultural income-tax and super-tax. 85 The validity of this order was challenged by the assessee by an application under Art. 226 of the Constitution  presented before  the  High  Court of Judicature  at  Allahabad.   The contention of the assessee that the Additional Collector  of Bahraich was not an authority competent bylaw to assess  the agricultural income-tax under Act III of 1949 was upheld  by the High Court.  The High Court issued a writ of  certiorari quashing  the order of the Additional Collector, 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   extraterrestrial 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. 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 classes 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 retrospective 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 el. 4-a enacts  that  the  expression  " Collector " shall have and shall be deemed always to have 86 the meaning as in the U. P. Land Revenue Act, 1901 and  will include  an  Additional Collector appointed under  the  said Act.    By  s.  10(1)(b),  all  orders  made,   actions   or proceedings   taken,  directions  issued  or   jurisdictions exercised under or in accordance with the provisions of  the Principal  Act or of any rule an framed thereunder prior  to the  amendment of that Act are to be deemed always to be  as good  and  valid in law as if the amending Act had  been  in

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force at all material dates.  By s. 10, sub-s. 1(a), of  the amending  Act,  it is provided that in r. IS of  the  U.  P. Agricultural  Income  Tax  Rules,  1949,  the  expression  " Collector  " shall be deemed to have 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 powers under s.    14  or  of  the rules framed under cl. (o) of sub-s. 2 of s. 44  of Act  III of  1949, the same shall be 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 by an Additional Collector who is  invested with  the powers of a Collector under Act III of 1901  shall be deemed always to have been properly taken. This court is seized of an appeal from the order of the High Court  quashing  the  assessment  on  the  ground  that  the Additional  Collector had no extra-territorial authority  to assess agricultural income-tax.  It is true that Act III  of 1949  was  amended  after  the  High  Court  delivered   its judgment;  but in dealing with this appeal, we are bound  to consider the amended law as it stands today (and which  must be  deemed  to have so stood at all material times)  and  to give  effect to it, having regard to the  clearly  expressed intention  of  the legislature in  the  amended  provisions. Accordingly  we  hold  that  the  Additional  Collector  was competent  to  assess the liability of the assessee  to  pay agricultural income-tax and super-tax under the United  Pro- vinces Agricultural Income-tax Act III of 1949. For the assessee, it is contended that before the 87 High  Court  an  application  for  review  of  judgment  was submitted  by  the  State  Government under  s.  11  of  the amending  Act,  and  the High  Court  having  rejected  that application and no further proceeding having been  initiated in this court challenging the correctness of that  decision, it is not open to us to set aside the judgment under appeal. In support of this plea, it is urged that an application for review of judgment is the only remedy available to a  person aggrieved  by  a  decision  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 under the Principal  Act, set  aside  any assessment made by an  Additional  Collector merely  on  the ground that the assessing 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. 1 1) applies however only  to  cases  in which  the assessment has been set aside in any  proceedings

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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 jurisdiction 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 this  view, because in our judgment, the contention  of  the assessee   that   for  setting  aside   an   adverse   order inconsistent  with  the provisions of the  amending  Act  of 1956, a proceeding for review under s. 11 is the only remedy which  is open to an aggrieved party, is without  force.   A court  of appeal,, in an appeal properly     before it, must give  effect to the law as it stands if the law has at  some stage  anterior  to the hearing of the appeal  been  amended retrospectively  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 lacked: and a provision for review like the one contained in s.  11 of the amending Act does not affect the power of  the appellate court to deal with the appeal in the light of  the amended law. In  the view expressed 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.                                        Appeal allowed.