Judgment

Bharucha, J.-The appellant was a Judge of the Allahabad High Court. He filed his income tax return for the Assessment Year 1978-79 on the basis that the salary that he received as a Judge was not liable to tax under the Income Tax Act. The contention having been rejected both by the I.T.O. and in appeal, a special leave petition was filed. Leave to appeal was granted and on 19th April, 1983 the following four ques­tions were referred by two learned Judges to a Constitution Bench:

“1. Whether the salary of a Judge of the High Court of a State payable under cl. (1) of Art. 221 of the Constitution and the salary of a Judge of the Supreme Court payable under cl. (1) of Art. 125 is taxa­ble by a law made by Parliament under Entry 82 of List I of the Sev­enth Schedule.

2. Whether the expression “Rupees” in Part D of the Second Schedule which stipulates the sums payable to the Judges of the Su­preme Court and the Judges of the High Court implies the purchasing power equivalent to the goods and services that could be bought in the year 1950. That is to say, whether the salaries so fixed should be construed as meaning their real value in terms of