Judgement

HEGDE, J. : -The only question that arises for decision in this appeal is whether the exclusion of government servants from the exemption given under Section 4 (3) (xxi) of the Indian Income-tax Act 1922 and later on under Section 10 (26) of the Income-tax Act 1961 is violative of Article 14 of the Constitution. For our present purpose it may be taken that the said two provisions are similar.

2. The respondent who is a government servant serving in the State of Assam has been assessed to income tax for the assessment years 1959-60, 1960-61, 1961-62 and 1962-63. He challenged the legality of his assessments in civil rule No. 127 of 1963 on the file of the High Court of Judicature of Assam. The Assam High Court accepted his petition and quashed the assessments in question holding that Section 4 (3) (xxi) of the Indian Income Tax Act 1922 as well as Section 10 (26) of the Income Tax Act 1961 to the extent they excluded government servants from the benefit of the exemption given thereunder are void. The income-tax authorities as well as the Union of India have come up to this Court in appeal by special leave.

3. The facts of this case lie within a narrow compass. The respondent belongs to Mikir Scheduled Tribe and is a permanent inhabitant of United Khasi-Jaintia Hills District, an autonomous District included in part A of the Table appended to Paragraph 20 of the Sixth Schedule of the Constitution of India. He is a government servant. All these are admitted facts.

4. The respondent in his petition before the High Court averred (in pare. 7 of the petition)) that "in all the autonomous districts under Table, Part A of paragraph 26 of the Sixth Schedule of the Constitution of India, there are a large number of persons belonging to Scheduled Tribe who derive considerable income from trade, commerce and business and other sources and employment and immovable properties .......". In the return filed by the appellants those allegations were not denied. Adverting to those allegations this is what was stated in the affidavit filed by Shri S. K. Dutta, Income-tax Officer (the first appellant in the appeal):

"With reference to the statements made in paragraph 7 of the petition I say that the petitioner being a government servant his case stands on a different footing other than the genera] public of the Scheduled Tribe."

5. It may be remembered till 15th August, 1947, Khasi and Jaintia Hills were not parts of British India. They were under native States. They merged with British India only after this country got independence. Till their merger, none of the Indian laws applied to those areas. The Finance Act of 1955 incorporated into the Indian Income-tax Act, 1922, S. 4 (3) (xxi) The relevant portion of Section 4 (3) reads thus:

4 (3). "Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them......"

(xxi). "Any income of a member of a Scheduled Tribe, as defined in clause (25) of Article 366 of the Constitution, residing in any area specified in Part A or Part B of the table appended to paragraph 20 of the Sixth Schedule to the Constitution, provided that such member is not in the service of Government."

Section 10 (26) of the Income-tax Act of 1961 which corresponds to Section 4 (3) (xxi) of the India Income-tax Act 1922, reads thus :-

"In the case of member of a Scheduled Tribe as defined in clause (25) of Art. 366 of the Constitution, residing in any area specified in Part A or Part B of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the Union Territories of Manipur and Tripura, who is not in the service of Government, any income which accrues or arises to him, (a) from any source in the area or Union Territories aforesaid, or (b) by way of dividend or interest on securities."

6. Part of the impugned assessments were made under the Indian Income Tax Act 1922 and the rest, under the Income-tax Act l961. If the aforemention