Back
2024 Supreme(Cal) 428
IN THE HIGH COURT AT CALCUTTA
SURYA PRAKASH KESARWANI, RAJARSHI BHARADWAJ, JJ.
Gouranga Parbati Tea Co. Pvt. Ltd. – Appellants
Versus
Agricultural Income Tax Officer & Ors. – Respondents
WPTT 14 of 2013
Decided on : 05-03-2024
Advocate Appeared:
For the Appellant : Mr. Boudhayan Bhattacharyya Ms. Stuti Bansal Ms. Rinki Saha Mr. S.S. Prasad
For the Respondents: Md. T.M. Siddiqui, AGP Mr. Tanoy Chakraborty Mr. Saptak Sanyal
The definition of terms and the applicability of specific provisions, such as Section 7A, are crucial in determining the scope of taxation and computation of agricultural income under the Bengal Agricultural Income Tax Act, 1944.
Headnote:
Agricultural Income Tax - Tea - Bengal Agricultural Income Tax Act, 1944, Section 3, Section 7, Section 7A
Fact of the Case:
The petitioner, engaged in the business of producing green tea leaves, contested the imposition of tax on the sale of tea saplings and the computation of depreciation under the Bengal Agricultural Income Tax Act, 1944.
Finding of the Court:
The court held that saplings are not 'tea' and are therefore not liable to tax under the Act. It also ruled that the provisions of Section 7A apply for the computation of agricultural income of a company, and the tribunal's interpretation of Section 7A was erroneous.
Issues: Imposition of tax on tea saplings, computation of depreciation, interpretation of Section 7A
Ratio Decidendi: Saplings are not 'tea' and are not liable to tax under the Act. Section 7A applies for the computation of agricultural income of a company, and the tribunal's interpretation of Section 7A was erroneous.
Final Decision: The impugned order was quashed, and the matter was remitted back to the competent authority for a fresh assessment order in accordance with the law.
JUDGMENT :
Surya Prakash Kesarwani, J.
1. Heard Mr. Baudhayan Bhattacharyya, learned counsel for the petitioner and Mr. Md. T.M. Siddiqui, learned Additional Government Pleader for the State respondents.
2. This writ petition has been filed praying to quash the impugned order dated 08.08.2012 in Case No. RN-63 of 2011 (Gouranga Parbati Tea Co. Pvt. Ltd. Vs. Agri. I.T.O., Siliguri & 2 Others) passed by the West Bengal Taxation Tribunal, Kolkata. The petitioner has also sought relief for a direction to the respondents to calculate depreciation in accordance with Section 7A of the Bengal Agricultural Income Tax Act, 1944 (hereinafter referred to as the Act of 1944) and not under Section 7 thereof.
Facts :
3. Briefly stated facts of the present case are that the petitioner is engaged in business of producing green tea leaves and pays agricultural income tax on the income derived from the sale of such tea. Orders dated 26.12.2006 and 09.11.2010 were passed by the Agricultural Income Tax Officer, Siliguri and Assistant Commissioner, Agricultural Income Tax, Jalpaiguri Circle, respectively in respect of the assessment for the year 2002-03. Assessing Officer sought to levy tax on sale of saplings and computed depreciation in accordance with Section 7 of the Act of 1944 read with Rule 3 of the Bengal Agricultural Income Tax Rules, 1944 (hereinafter referred to as the Rules). According to the petitioner assessee “tea saplings” is not “tea” and as such in view of charging Section 3 of the Act of 1944, no tax could be levied on the income derived from sale of saplings. With regard to the depreciation, objection of the petitioner assessee is that specific provision Section 7A has been enacted for companies.
Therefore Section 7A shall apply and Section 7 and Rule 3 of the Rules shall not apply. Aggrieved with the order of the Assessing Officer, as aforesaid, the petitioner filed the aforesaid Case No. RN-63 of 2011 which was dismissed by order dated 08.08.2012 passed by the West Bengal Taxation Tribunal, Kolkata. Aggrieved with the aforesaid order of the Tribunal the petitioner has filed the present writ petition. Submissions :
4. Learned counsel for the petitioner submits as under :
(i) as per charging Section 3 of the Bengal Agricultural Income Tax Act, 1944, only income from “tea” is taxable and, therefore, the tribunal has committed a manifest error of law to uphold the imposition of tax on tea saplings. The word “tea” has not been defined under the Act, although it is defined under the Tea Act, 1953 (Central Act) which also does not include tea saplings. Therefore, the imposition of tax on income derived from tea saplings is wholly without authority of law and beyond the charging Section itself;
(ii) the depreciation Section 7A read with Section 2(6) of the Act specifically provides for computation of agricultural income of a company in accordance with the method of accounting regularly employed it. Therefore, the tribunal has committed a manifest error of law to invoke Rule 3 of the Rules instead of computing depreciation as per accounting method regularly employed by the assessee company. Depreciation is computable as per Schedule XIV read with Sections 349 and 350 of the Companies Act, 1956.
5. Learned counsel for the State submits that since income derived from sale of saplings is an agricultural income under Section 2(1A) of the Income Tax Act, 1961 (hereinafter referred to as the Act of 1961), therefore, income derived from saplings is also liable to tax under the Act of 1944. On the point of depreciation, he submits that Section 7A does not speak about the depreciation, therefore, Section 7 read with Rule 3 shall apply.
Discussion and findings :
6. We have carefully considered the submissions of the learned counsel for the parties and perused the record of the petition.
7. Entry 46 of List II-State List under Schedule VII to the Constitution of India provides field of Legislation on “Taxes on Agricultural Income”. Thus, in view of the provi
