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2025 Supreme(Online)(Ker) 58715

IN THE HIGH COURT OF KERALA AT ERNAKULAM
ZIYAD RAHMAN A.A., J
VELLANGALLUR PEOPLES WELFARE CO-OPERATIVE SOCIETY LTD – Appellant
Versus
UNION OF INDIA – Respondent
WP(C) Nos.7053/2023, 213/2022, 378/2022, 384/2022, 383/2022, 732/2022, 736/2022, 833/2022, 1383/2022, 1633/2022, 1808/2022, 1943/2022, 2208/2022, 2780/2022, 3734/2022, 4385/2022, 4442/2022, 4996/2022, 5569/2022, 5900/2022, 8026/2022, 8742/2022, 8943/2023, 10465/2022, 10480/2022, 10498/2022, 10692/2022, 10697/2022, 10699/2022, 10705/2022, 10717/2022, 10719/2022, 10720/2022, 10721/2022, 10722/2022, 10731/2022, 10735/2022, 10738/2022, 10741/2022, 10744/2022, 10747/2022, 10787/2022, 10799/2022, 10810/2022, 10818/2022, 10828/2022, 10831/2022, 10845/2022, 10855/2022, 10891/2022, 10936/2022, 10937/2022, 10968/2022, 10967/2022, 11001/2022, 11009/2022, 11035/2022, 11042/2022, 11058/2022, 11072/2022, 11087/2022, 11092/2022, 11096/2022, 11117/2022, 11130/2022, 11135/2022, 11138/2022, 11144/2022, 11143/2022, 11149/2022, 11150/2022, 11165/2022, 11171/2022, 11187/2022, 11184/2022, 11186/2022, 11194/2022, 11203/2022, 11224/2022, 11232/2022, 11248/2022, 11247/2022, 11262/2022, 11260/2022, 11263/2022, 11271/2022, 11272/2022, 11273/2022, 11286/2022, 11301/2022, 11309/2022, 11316/2022, 11332/2022, 11323/2022, 11325/2022, 11326/2022, 11327/2022, 11335/2022, 11342/2022, 11355/2022, 11366/2022, 11371/2022, 11373/2022, 11381/2022, 11407/2022, 11415/2022, 11420/2022, 11441/2022, 11440/2022, 11450/2022, 11446/2022, 11445/2022, 11458/2022, 11467/2022, 11478/2022, 11480/2022, 11489/2022, 11487/2022, 11507/2022, 11530/2022, 11544/2022, 11555/2022, 11558/2022, 11570/2022, 11591/2022, 11601/2022, 11599/2022, 11600/2022, 11604/2022, 11607/2022, 11605/2022, 11609/2022, 10302/2022, 11616/2022, 11619/2022, 11620/2022, 11621/2022, 11627/2022, 11646/2022, 11649/2022, 11654/2022, 11683/2022, 11679/2022, 11684/2022, 11718/2022, 11721/2022, 11728/2022, 11727/2022, 11740/2022, 11738/2022, 11765/2022, 11760/2022, 11766/2022, 11768/2022, 11772/2022, 11776/2022, 11780/2022, 11781/2022, 11783/2022, 11915/2022, 11784/2022, 11791/2022, 11792/2022, 11810/2022, 11848/2022, 11851/2022, 11870/2022, 11887/2022, 11884/2022, 11939/2022, 12054/2022, 12057/2022, 12065/2022, 12061/2022, 12076/2022, 12075/2022, 12082/2022, 12086/2022, 12100/2022, 12102/2022, 12105/2022, 12110/2022, 12123/2022, 12124/2022, 12126/2022, 12145/2022, 12257/2022, 12263/2022, 12351/2022, 12428/2022, 14068/2022, 12504/2022, 12545/2022, 12635/2022, 12754/2022, 12713/2022, 12744/2022, 12753/2022, 12759/2022, 13011/2022, 13047/2022, 13114/2022, 13112/2022, 13171/2022, 13184/2022, 13339/2022, 13303/2022, 13305/2022, 13318/2022, 13358/2022, 13364/2022, 13410/2022, 13439/2022, 13492/2022, 13545/2022, 13615/2022, 13687/2022, 13693/2022, 13707/2022, 13720/2022, 13741/2022, 13746/2022, 13751/2022, 13760/2022, 13761/2022, 13781/2022, 13797/2022, 13833/2022, 13891/2022, 13895/2022, 13902/2022, 13903/2022, 13912/2022, 13939/2022, 13940/2022, 13996/2022, 14006/2022, 14010/2022, 14014/2022, 14017/2022, 14047/2022, 14061/2022, 14119/2022, 14122/2022, 14151/2022, 14162/2022, 14195/2022, 14341/2022, 14425/2022, 14559/2022, 14687/2022, 14715/2022, 14806/2022, 14807/2022, 14811/2022, 14832/2022, 14838/2022, 14857/2022, 14944/2022, 14960/2022, 15027/2022, 15066/2022, 15438/2022, 15480/2022, 15487/2022, 15518/2022, 15596/2022, 15598/2022, 15789/2022, 15825/2022, 15828/2022, 15874/2022, 16074/2022, 16243/2022, 16321/2022, 16459/2022, 16598/2022, 16805/2022, 16881/2022, 17323/2022, 17707/2022, 17716/2022, 17796/2022, 18070/2022, 18489/2022, 18690/2022, 20028/2022, 21287/2022, 21639/2022, 21922/2022, 22198/2022, 22339/2022, 22917/2022, 23239/2022, 23780/2022, 24428/2022, 24538/2022, 25354/2022, 26364/2022, 26636/2022, 25894/2023, 27682/2023, 31251/2022, 32055/2022, 32580/2023, 30686/2021, 36670/2023, 41031/2022, 9194/2024, 41499/2022, 43925/2023, 27670/2024, 31176/2024, 37399/2024

Advocates:
Sri. A. Kumar, Dr. K.P. Pradeep, Sri.M.M.Monaye, Sri. K.S. Hariharan Nair, Sri. Jojo C.A
Sri.B.G. Hareendranath, Sri. Thomas Abraham, Sri. Mohammed Rafiq, Sri. Christopher Abraham

The introduction of a TDS obligation for cooperative societies based on turnover does not violate Article 14, as it reflects reasonable classification linked to income levels under taxation provisions.

Headnote:(A) Income Tax Act, 1961 - Section 194A(3) - Challenge against Constitutional validity of the proviso restricting exemption from TDS for co-operative societies based on turnover - Petitioners are Primary Agricultural Credit Societies claiming unjust burden through the new proviso. (Para 1-3)

(B) Classification - Legitimacy of classification based on turnover of cooperative societies challenged - Court establishes that classifications bearing relevance to income reflect on taxation structure. (Para 18)

Facts of the case:
The petitioners are Co-operative Societies engaged in agricultural financing, contesting the amendment imposing TDS obligations exceeding a specified turnover. They claim it violates the equality principle under Article 14, affecting their operational viability.

Findings of Court:
Petitioners failed to establish the constitutional violation, with the proviso being validly enacted, aligning with legislative competence.

Issues: Whether the introduction of a turnover condition creates unreasonable classification among co-operative societies and if TDS applies to non-taxable income.

Ratio Decidendi: The court ruled that the classification based on turnover is justifiable under the Income Tax Act, maintaining legislative intent without infringing constitutional rights.

Result: Writ petitions dismissed.

JUDGMENT

[WP(C) Nos.7053/2023, 213/2022, 378/2022, 384/2022, 383/2022, 732/2022, 736/2022, 833/2022, 1383/2022, 1633/2022, 1808/2022, 1943/2022, 2208/2022, 2780/2022, 3734/2022, 4385/2022, 4442/2022, 4996/2022, 5569/2022, 5900/2022, 8026/2022, 8742/2022, 8943/2023, 10465/2022, 10480/2022, 10498/2022, 10692/2022, 10697/2022, 10699/2022, 10705/2022, 10717/2022, 10719/2022, 10720/2022, 10721/2022, 10722/2022, 10731/2022, 10735/2022, 10738/2022, 10741/2022, 10744/2022, 10747/2022, 10787/2022, 10799/2022, 10810/2022, 10818/2022, 10828/2022, 10831/2022, 10845/2022, 10855/2022, 10891/2022, 10936/2022, 10937/2022, 10968/2022, 10967/2022, 11001/2022, 11009/2022, 11035/2022, 11042/2022, 11058/2022, 11072/2022, 11087/2022, 11092/2022, 11096/2022, 11117/2022, 11130/2022, 11135/2022, 11138/2022, 11144/2022, 11143/2022, 11149/2022, 11150/2022, 11165/2022, 11171/2022, 11187/2022, 11184/2022, 11186/2022, 11194/2022, 11203/2022, 11224/2022, 11232/2022, 11248/2022, 11247/2022, 11262/2022, 11260/2022, 11263/2022, 11271/2022, 11272/2022, 11273/2022, 11286/2022, 11301/2022, 11309/2022, 11316/2022, 11332/2022, 11323/2022, 11325/2022, 11326/2022, 11327/2022, 11335/2022, 11342/2022, 11355/2022, 11366/2022, 11371/2022, 11373/2022, 11381/2022, 11407/2022, 11415/2022, 11420/2022, 11441/2022, 11440/2022, 11450/2022, 11446/2022, 11445/2022, 11458/2022, 11467/2022, 11478/2022, 11480/2022, 11489/2022, 11487/2022, 11507/2022, 11530/2022, 11544/2022, 11555/2022, 11558/2022, 11570/2022, 11591/2022, 11601/2022, 11599/2022, 11600/2022, 11604/2022, 11607/2022, 11605/2022, 11609/2022, 10302/2022, 11616/2022, 11619/2022, 11620/2022, 11621/2022, 11627/2022, 11646/2022, 11649/2022, 11654/2022, 11683/2022, 11679/2022, 11684/2022, 11718/2022, 11721/2022, 11728/2022, 11727/2022, 11740/2022, 11738/2022, 11765/2022, 11760/2022, 11766/2022, 11768/2022, 11772/2022, 11776/2022, 11780/2022, 11781/2022, 11783/2022, 11915/2022, 11784/2022, 11791/2022, 11792/2022, 11810/2022, 11848/2022, 11851/2022, 11870/2022, 11887/2022, 11884/2022, 11939/2022, 12054/2022, 12057/2022, 12065/2022, 12061/2022, 12076/2022, 12075/2022, 12082/2022, 12086/2022, 12100/2022, 12102/2022, 12105/2022, 12110/2022, 12123/2022, 12124/2022, 12126/2022, 12145/2022, 12257/2022, 12263/2022, 12351/2022, 12428/2022, 14068/2022, 12504/2022, 12545/2022, 12635/2022, 12754/2022, 12713/2022, 12744/2022, 12753/2022, 12759/2022, 13011/2022, 13047/2022, 13114/2022, 13112/2022, 13171/2022, 13184/2022, 13339/2022, 13303/2022, 13305/2022, 13318/2022, 13358/2022, 13364/2022, 13410/2022, 13439/2022, 13492/2022, 13545/2022, 13615/2022, 13687/2022, 13693/2022, 13707/2022, 13720/2022, 13741/2022, 13746/2022, 13751/2022, 13760/2022, 13761/2022, 13781/2022, 13797/2022, 13833/2022, 13891/2022, 13895/2022, 13902/2022, 13903/2022, 13912/2022, 13939/2022, 13940/2022, 13996/2022, 14006/2022, 14010/2022, 14014/2022, 14017/2022, 14047/2022, 14061/2022, 14119/2022, 14122/2022, 14151/2022, 14162/2022, 14195/2022, 14341/2022, 14425/2022, 14559/2022, 14687/2022, 14715/2022, 14806/2022, 14807/2022, 14811/2022, 14832/2022, 14838/2022, 14857/2022, 14944/2022, 14960/2022, 15027/2022, 15066/2022, 15438/2022, 15480/2022, 15487/2022, 15518/2022, 15596/2022, 15598/2022, 15789/2022, 15825/2022, 15828/2022, 15874/2022, 16074/2022, 16243/2022, 16321/2022, 16459/2022, 16598/2022, 16805/2022, 16881/2022, 17323/2022, 17707/2022, 17716/2022, 17796/2022, 18070/2022, 18489/2022, 18690/2022, 20028/2022, 21287/2022, 21639/2022, 21922/2022, 22198/2022, 22339/2022, 22917/2022, 23239/2022, 23780/2022, 24428/2022, 24538/2022, 25354/2022, 26364/2022, 26636/2022, 25894/2023, 27682/2023, 31251/2022, 32055/2022, 32580/2023, 30686/2021, 36670/2023, 41031/2022, 9194/2024, 41499/2022, 43925/2023, 27670/2024, 31176/2024, 37399/2024]

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In all these cases, the petitioners are Co-operative Societies registered under the provisions of the Kerala Co-operative Societies Act, 1969 and are classified as Primary Agricultural Credit Societies under the said Act and the Rules. In all

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2025 Supreme(Online)(Ker) 58715

The introduction of a TDS obligation for cooperative societies based on turnover does not violate Article 14, as it reflects reasonable classification linked to income levels under taxation provisions.

Cases Referred (5)