1. Challenge to agricultural income-tax assessment by an Additional Collector on grounds of lack of jurisdiction, subsequently addressed by retrospective legislative amendment. (Para 1 , 2 , 3 )
Back
Next 
1960 Supreme(SC) 165
SUPREME COURT OF INDIA
28th July 1960.
S.K. DAS, M. HIDAYATULLAH AND J.C. SHAH, JJ.
State of U.P. and others (In all the Appeals) Appellants
Versus
(1) Raja Syed Mohammad Sadat Ali Khan (In C. A. No. 306 of 57); (2) Raja Birendra Bikram Singh (In C. A. No. 307 of 57) and; (3) His Highness Maharaja Sukhjit Singh (In C. A. No. 308 of 57); Respondents.
Civil Appeals Nos. 306 to 308 of 1957....
Advocates appeared
Mr. C. B. Agarwala, Senior Advocate, (Mr. C. P. Lal, Advocate for Mr. G. N. Dikshit, Advocate, with him), for Appellants (In all the appeals); Mr. S. P. Sinha, Senior Advocate (Mr. B. R. L. Iyengar, Advocate, with him), for Respondent (In C. A. No. 306 of 57); Mr. Achhru Ram, Senior Advocate (Mr. I. S. Sawhney, Advocate, with him), for Respondent (In C. A. No. 308 of 57).
Advocates:
ACHHRU RAM, B.R.L.Iyengar, C.B.AGARWAL, C.P.LAL, G.N.DIKSHIT, I.S.SAWHNEY, S.P.SINHA
ACHHRU RAM, B.R.L.Iyengar, C.B.AGARWAL, C.P.LAL, G.N.DIKSHIT, I.S.SAWHNEY, S.P.SINHA
An appellate court must apply retrospectively amended law to confer jurisdiction on a lower authority, even if a specific statutory review remedy exists or was rejected, as the appellate court must give effect to the law as it stands at the time of the hearing.
Headnote:(A) Agricultural Income-Tax Act, 1949 - Section 14 - Land Revenue Act, 1901 - Section 14(A) - Amending Act, 1956 - Section 10 and 11 - Jurisdiction of Additional Collector - Retrospective amendment - Validity of assessment - Appellate court's power to apply amended law - A retrospective amendment conferring jurisdiction on an authority previously found to lack it validates prior proceedings - A statutory provision for review does not preclude an appellate court from applying the law as it stands at the time of the appeal. (Paras 4, 5, 9)
(B) Appeal - Scope - Where a law is amended retrospectively to confer jurisdiction on a tribunal or authority of first instance, the appellate court is bound to give effect to the amended law as it stands at the time of the hearing, regardless of whether a specific review remedy was provided or exhausted. (Para 9)
Facts of the case:
An assessee was assessed for agricultural income-tax by an Additional Collector. The High Court quashed the assessment on the ground that the Additional Collector lacked extra-territorial jurisdiction to assess income from multiple districts. Subsequently, the legislature enacted an amending act with retrospective effect, clarifying that the term "Collector" includes "Additional Collector" and validating all previous actions taken by such officers. The State's application for review of the High Court's judgment under the amending act was rejected on the grounds that the original proceedings were under the Constitution and not the Principal Act.
Findings of Court:
The court held that the retrospective amendment explicitly validated the assessment proceedings conducted by the Additional Collector. Furthermore, the court found that the existence of a statutory review mechanism does not limit the power of an appellate court to apply the law as it exists at the time of the appeal.
Issues: Whether the retrospective amendment validating the jurisdiction of an Additional Collector could be applied by the appellate court despite the rejection of a review application under the amending act.
Ratio Decidendi: An appellate court must apply the law as it stands today if the law was retrospectively amended to confer jurisdiction that was originally lacking. A provision for review does not affect the power of the appellate court to adjudicate the dispute in light of the amended law.
Result: Appeals allowed.
Legal Category Hierarchy
Table of Contents
2. Whether an Additional Collector possesses jurisdiction to assess agricultural income-tax and whether a rejected review application under a retrospective amendment bars appellate relief. (Para 3 , 4 , 6 )
3. Retrospective amendments conferring jurisdiction must be applied by appellate courts; a statutory review provision does not preclude the appellate court's power to apply amended law. (Para 5 , 9 )
4. An appellate court must give effect to retrospectively amended law conferring jurisdiction on a tribunal, regardless of the availability or outcome of a statutory review remedy. (Para 9 )
5. Appeals allowed and High Court judgment set aside. (Para 10 , 11 )
6. How should an appellate court treat a retrospective amendment that confers jurisdiction on a lower authority while an appeal is pending?
The appellate court is bound to consider and give effect to the amended law as it stands, provided the legislature's intention was to retrospectively validate the jurisdiction of the authority. (Para 5 )
7. Does the existence of a statutory provision for review of an order inconsistent with an amending Act preclude an appellate court from applying that amended law?
No. A provision for review does not affect the power of an appellate court to deal with an appeal in light of retrospectively amended law that confers jurisdiction. (Para 9 )
8. Whether an Additional Collector appointed under the U.P. Land Revenue Act is competent to perform the duties of a Collector under the U.P. Agricultural Income-Tax Act?
Yes, provided the law or a retrospective amendment explicitly deems the expression Collector to include an Additional Collector appointed under the Land Revenue Act. (Para 4 , 5 )
Judgment
SHAH, J. : Civil Appeal No. 306 of 1957: 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, 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 R. 18, Cl. 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.
2. 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 U. P. 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 under 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.
3. 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 Bahriach was not an authority competent by law 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 situated in several districts, the Collector as the assessing authority under Act III of 1949 exercises "extra-territorial" jurisdiction, but as K. C. Chaudhry, 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.
4. On behalf of the State of Uttar Pradesh, it is urged that an Additional Collector by virtue of S. 14(A) of the U. P. 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 cases 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 "extra-territorial" powers. It is unnecessary to express any opinion on this argument, because the legislature of the State of Uttar Pradesh has, since the judgment deliver
