This writ petition has been preferred by AFT Industries Ltd, a public limited company incorporated under the Companies Act, 1956, challenging the vires of the proviso to Rule 5 of the Assam Agricultural Income Tax Rules, 1939 and the show cause notice dated 23rd March, 1995 (Annexure IV) issued by the Agricultural Income Tax Officer, Assam, Guwahati.

2. The Agricultural Income Tax Officer Assam vide notice dated 23rd March, 1995 directed the writ petitioner to show cause as to why 60% of the deduction allowed under section 80 HHC of the Indian Income Tax Act, 1961, by the Central Taxing Authority before application of Rule 8 of the Income Tax Rules should not be added to the taxable agricultural income for the assessment year 1986-87.

3. Being aggrieved with the aforesaid notice, the petitioner has preferred this writ petition praying for reliefs as indicated above.

4. There is no dispute that the Parliament alone has the powers to define agricultural income and to determine, in respect of processed agricultural product like tea, the proportion to be treated as non-agricultural for the purpose of levy of income tax. Accordingly, the percentage which is to be treated as non agricultural income has been fixed by the Parliament at 40% in accordance with Rule 8 of the Income Tax Rules, 1962. The income derived from sale of tea is first to be treated as if it was income from business in accordance with relevant provisions of the Income Tax Act and the Parliament alone has the powers, competence and jurisdiction to impose tax on 40% of the income so computed and the State Legislature has the authority to levy agricultural income tax in respect of the balance 60%. That being the position, it is argued that the vires of the proviso to Rule 5 to the extent it gives powers to the State Agricultural Income Tax Officer to reject the computation made by the Central Taxing Authority has been challenged as offending Articles 14,19 (1) (g), 265 and 300A of the Constitution of India. During the course of argument, learned counsel of the petitioner submitted that the question of law involved in this case has been answered by a Division Bench of this Court in Writ Appeal No. 39 of 1995 (in Civil Rule No.2094 of 1992) M/s Assam Company Ltd & others vs. State of Assam & others, reported in 1996 (1) GLT 232 and the issues involved in this case having been answered by the Division Bench of this Court, the said decision will determine the issues of this case.

5. In M/s Assam company Ltd & others (supra), the Division Bench of this High Court was seized with the similar question regarding vires of the proviso to Rule 5 of the Assam Agricultural Income Tax Act. The discussion and observation made in paragraphs 14 and 15 of the aforesaid judgment relevant for this case are reproduced below :

“14. While the State Legislature would have plenary powers to make law in respect of taxes in relation to the aforesaid 60% of the income, derived from manufacture and sale of tea deemed to be agricultural income which would include all subsidiary and incidental matters such as method of computation of agricultural income and the deductions that would be permissible from such agricultural income. But the State Legislature would have no power to make any law which would have the effect of levying tax on the aforesaid 40% of such income on which tax is payable under the Income Tax Act by virtue of provisions of Income Tax Act. The Apex Court also took the view that the computation of income from tea has to be in accordance with the relevant provisions of the enactments relating to the Indian Income Tax Act and the deduction towards various expenses incurred for the purpose of earning the income as are allowable under the said enactments rating to Indian Income Tax is disallowed, would result in Agricultural Income Tax being imposed on more that the aforesaid 60% of income from tea deemed as agricultural income as per the Constitution.

15. A plain reading of Rule 5 of the A