Judgment

SUBBA RAO, J.:

This appeal by special leave raises the question whether the expression "income-tax" in cl. (c) of sub-r. (2) of R. 2 of Schedule 1 to the Madhya Pradesh Abolition of Proprietary Rights (Estatet, Mahals, Alienated Lands) Act, l950 (M.P. Act No. .1 of 1951), hereinafter called the Act, includes super-tax.

2. The facts are as follows: The respondent was the zamindar of Bhadra Estate in Balaghat District of Madhya Pradesh. His estate was known as Bahela Zamindari consisting of 78 villages. The Act came into force on January 26, 1951. Under the Act the proprietary rights of the zamindari vested in the State and he became entitled to compensation in respect of the said rights in the said villages under S. 8 of the Act. The compensation was to be determined in accordance with the rules contained in Schedule 1 to the Act. Under R. 8 of Schedule 1 the zamindar would be entitled to compensation at 10 times the net income. The net income would be calculated by deducting from the gross income, inter alia, the average of the income-tax paid in respect of the income from big forest during 30 agricultural years preceding March 31, 1951. On November 30, 1951, the Compensation Officer determined the compensation payable to the respondent at Rs. 2,21,330-12-6. In arriving at that figure he deducted not only the income-tax payable by the respondent but also the super-tax and sur-charge payable by him. The average of the income-tax paid by him during the material 30 years was only Rs. 3,7602-9, but if the average of the super-tax and surcharge was included, the average came to Rs. 7,070-8-0. The result was was that the net yearly income of the estate was reduced by Rs. 3,310-5-3 and compensation was paid to him on the basis of the amount so reduced. The respondent moved the Settlement Commissioner under S. 15 of the Act for enhancement of the compensation, but the Commissioner confirmed the order of the Compensation Officer. Thereafter, the respondent filed an application in the High Court under Arts, 226 and 227 of the Constitution for quashing the order of the Compensation Officer. The High Court held, on a construction of the relevant provisions of the Act, that super-tax should not be takes into account while calculating the compensation payable to the respondent. The State of Madhya Pradesh has filed the present appeal against the order of the High Court.

3. Mr. Sen, learned counsel for the State, contends that the object of,R.2(2).(c) is to provide a method for ascertaining the net income of an estate, that in that context there cannot be any justifiable distinction, between income-tax and super-tax, for both of them have, inter alia, to be deducted from the gross income to arrive at the net income, and that the Legislature used the word "income-tax" in its comprehensive sense so as to take in super-tax. He adds that under the Income-tax Act, super-tax is only an additional duty of income-tax and, therefore, a part of it.

4. Mr. Rajagopal Sastri, learned counsel for the respondent-assessee argues that in construing a provision of an ex-proprietary Act the Court will have to construe such a provision strictly and if so construed, super-tax cannot be included in the expression "income-tax". He took us through the relevant provisions of the Income-tax Act to support his contention that super tax is different in its origin, description, scope incidents and collection from the income-tax.

5. The question turns upon the correct interpretation of R.2(2)(c) of the rules of Schedule I to the Act. The relevant provisions of the Act and the rule read :

Section 8 (1) of the Act: The State Government shall pay to every proprietor, who is divested of proprietary rights, compensation determined in accordance with the rules contained in Schedule I."

Schedule I to the Act

Rule 2 (2). The net income of an estate or mahal in the Central Provinces shall be calculated by deducting from the gross income the sums under the following heads, namely: