1989 PLP 909 (PTD)

"(1) any sums paid by him in the previous year on account of (i) Land revenue or rent, (ii) any local rate or cess including Education Cess in respect of such land; (7) in respect of the cost of collection of such rent or revenue including the cost of maintenance of any Katchari or other capital assets and any expenses of litigation, a sum equal to fifteen per centum of the total amount of rent or revenue which accrued to him in the previous year in respect of the land from which such rent or revenue is derived: Provided that in the case of an assessee who can produce his accounts audited and certified to be correct by an Accountant and at the option of such asssessee recorded in writing the allowance shall be, instead of such sum the actual cost of collection incurred during the previous year as determined by the Agricultural Income Tax Officer on the basis of such accounts, subject to a maximum equal to twenty per centum of the total amount of rent or revenue which accrued to him in the previous year in respect of the land from which such rent or revenue is derived. (8) in the assessment made for each of the three financial years ending do the 31st March, 1945, the 31st March, 1946, the 31st March, 1947, respectively. in respect of the cost of collection of such rent or revenue and in addition to the allowance specified in clause (7), if the total amount of the rent or revenue received by the assessee in the previous year exceeds the total amount of rent or revenue which accrued to such assessee in the previous year by more than five per centum of such amount accrued, a sum equal to one-fifth of the amount by which such amount received exceeds such amount accrued." The assessee claims a percentage, by way of collection costs on the amount cesses paid by him while the case for the Commissioner is that percentage allowance is not to be calculated" on the total agricultural income, but upon a wholly different sum, viz., "the total amount of rent or revenue which accrued to the assessee in respect of the land from which such rent or revenue is derived" which expression cannot be interpreted to include the amount of cesses. The Agricultural Income Tax Officer's order does not shoat this particular claim was advanced before him, but it was raised before the Assistant Commissioner who rejected it on the ground that in clauses (7) and (8) in section 6, cess has not been mentioned specifically in addition to rent or revenue. The Agricultural Income Tax Appellate Tribunal upheld the finding of the Assistant Commissioner. They considered that cesses, though included in the "total assessable income" had intentionally not been "mentioned as the income over which the percentage ...has to be calculated" for allowing costs of collection. The reason given is that assessees do not incur extra cost for collecting cesses, which are recovered from tenants and under-lessees along with the rent. The view was also expressed that cesses are not "rent" under the Bengal Tenancy Act, and are not "revenue" in the wide sense of income, since any sums received by the assessee, along with his own quota of cess. The learned Judges of the High Court reversed the opinion of the Agricultural Income Tax authorities and held that the assessee was entitled to receive the 15 per centum allowance not only on the actual rent or revenue which accrued to him but on the cess as well. It was contended for the Commissioner that the use of the word "such" in expressing the amount in respect of which the tax was payable, and the absence of that word from the description of the amount upon which the allowance was to be calculated indicated that two distinct amounts were meant. It was also urged that the words "which accrued to him" occurring in the description of the amount upon which the allowance was to be calculated had a limiting effect and operated to exclude such a receipt as a cess, which could not be said to accrue to the landlord. These arguments were not accepted. Observing "the word `accrue' has been evidently used in contradistinction to 'receive' in the beginning of Section 6" the learned Judges expressed their agreement with the contentions of the assessee. The present appeal has been brought by the Commissioner on whose behalf Mr. Asir has again pressed the same argument as was repelled by the Dacca High Court, namely, that the words employed by the Legislature to indicate what allowance was to be made in respect of what income were perfectly clear. There could be no doubt that the costs of collection of a particular sum of money were intended to be ascertained, only for the purposes of making an allowance by way of remission of tax, by taking a certain percentage on another and different sum of money, which was specified, separately. The learned Judges of the Dacca High Court had ignored this clear distinction and had thus been led to an erroneous conclusion. In the course of the argument it was pointed out that the scheme of the Cess Act and the Education Act was that in relation to an estate the cesses were charged at rates which varied with the total income, and recovery was made in the following way, viz. that a certain specified proportion of the cess was made payable by the actual cultivator to his immediate superior, viz. the Patnidar of lessee from the title-holder, whose duty it was to pass on the amount received by him along with the quota of the cess assessed upon himself, to the landlord and the landlord was required to make up the amount to the sum assessed at the prescribed rate and after deducting a certain prescribed amount granted to him as an allowance, was to pay the balance to the Government. The Cess Acts themselves provided for the landlord to reimburse himself for the cost of collection before paying amount received by him as well as that due from him, to the Government. It would be inequitable to make a double allowance on the same score, and therefore, the view advanced on behalf of the assessee, namely, that he should be given a percentage allowance on the amount of cess as well was plainly unreasonable. If the words used in the statute were reasonably capable of construction in the opposite sense it was submitted that that sense should prevail. It was contended that the words used in the statute were so clear that there was indeed no room for doubt that the view taken by the Agricultural Income Tax authorities was the correct one, and effect, therefore, should be given it. It was mentioned that in 1951 the Act in question was amended by the Legislature and in clause (7) as well as in clause (8) the words "excluding any cess and selami" were added to the words employed to specify the amount upon which the collection allowance was to be calculated as a percentage. The argument on behalf of the assessee was that the inclusion of ecss in agricultural income could be inferred from the words of Section 4 of the Act, which defined "total agricultural income" as comprising all "agricultural income derived from land ....including any Local Cess and Education Cess payable in respect of such land" to the assessee. In support of this view reference was made to Province of Bihar v. Maharaja Pratap Udi Nath Sahi Deo [I.L.R. 20 Pat. 6991 where the expression "rent in income" occurring in the Bihar Agricultural Income Tax Act, 1938 was interpreted to include cess. It was further contended that the words "which accrued to him" appearing in clause (7) of Section 6 have no personal significance or indeed any significance and that the expression "rent or revenue" wherever it occurs in clause (7) has exactly the same meaning, viz. the full meaning of the expression occurring in the charging portion of Section 6, viz: "all rent and revenue including any local Cess or Education Case referred to in Section 4 ....included in his total agricultural income and received in the previous year."' It is neither necessary nor desirable to consider in detail the amendments of 1951. They were affected after the question of the true interpretation of the clause in question had been formally raised in judicial proceedings. Prima facie, the effect of the amendment is to create result for which counsel appearing on behalf of the Commissioner is contending, but that is obviously a factor to which no weight can be given in attempting true construction of the original words of the relevant clause. Rather the amendment is expressed to have been made "in order to remove some administrative difficulties (vide the statement of objects and reasons) and not for the "avoidance of doubt" regarding the intention underlying the original form of words. But indeed, in determining whether or not a particular matter comes within a taxing statute, it is only the letter of the para, which must be looked to. There is ample authority for the proposition that in a fiscal ease, form is of primary importance, the principle being that if the person sought to be taxed comes within the letter of the law, he must be taxed, however great hardship may thereby be involved but on the other hand if the Crown cannot bring the subject within the letter of the law he is free, however apparent it may be that his case is within what might be called the spirit of the Law. As was said by Rowlatt, J, in Cap'Brandy Syndicate v. Inland Revenue Commissioner (1951) I.K.B 64]: "In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is 'no equity about tax: There is no presumption as a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." In Tenant v. Smith [(1892) A.C. 150] Lord Halsbury said: "In a Taxing Act it is impossible, I believe to assume any intention, any governing purpose in the Act, to do more than take such tax as status imposes .....cases, therefore, under the Taxing Acts always resolve themselves into the question whether or not the words of the Act have reached the alleged subject of Taxation." In the light of these pronouncements with which I hereby express my respectful agreement, it is clear that it is not possible to look either to the amending statute of 1951 or to the alleged collection allowance said to be included in the scheme of the cess, in order to determine weather the words in clause (7) of Section 6 provide for an allowance to be made in respect of the amount of cess received by the assessee. That question "list be decided solely on a consideration of the very words of the clause, although in interacting those words it is permissible to look generally at the, rest of the statute and in particular to consider whether the words in question have been used elsewhere and if so in what sense. Before proceeding to consider the wording of clause (7) in this manner, however, it will be convenient to deal briefly with the Patna authority mentioned above. Reference to the Bihar Agricultural Income Tax Act will show that by the charging sections, the tax is imposed on "agricultural income", not as in the Bengal Statute, on "total agricultural income". The latter expression does indeed occur in 1hc. Bihar Act brat is given a totally different meaning from that given to it in the Bengal Act. In the Bengal Act the expression "total agricultural income" is a term of art, having the positive effect of adding cresses to rent or revenue for the ascertainment of a particular sum, which is relevant for the imposition of the tax In the Bihar Act "total agricultural income" is defined as the "aggregate of the amounts of agricultural income of different clauses specified in Sections 6 and 7 as determined respectively in the manner laid down in the said sections". Reference to these sections shows that they deal-respectively with two separate categories of "agricultural income", viz., that constituted by "rent or income" and that derived from agricultural processes and appurtenant sources, but in each case, the section provides not for any addition to such income, but for deductions therefrom, by way of allowances. The use of word "aggregate" is therefore, difficult to understand. However, one of the deductions provided for is "the sum actually paid in the previous year in respect of such land as any local cress or rate" and it would seer- that if "agricultural income" did not include such sums, the allowance would, in a sense, be in the nature of a gift to the assessee, in view of the fact that the bulk of the amount of cess may not have been contributed by him personally but may have been received from persons holding leases or cultivating the land under him (It was not. brought to notice, in the course of argument that, in relevant respect, the machinery for recovery of cesses in Bihar differs materially from that shown to exist in Bengal). Therefore, the conclusion reached in the Patna case that the expression "rent or income" in the: definition of "agricultural income' in the Bihar Act includes cess is of no assistance in the resolution of the present question which arises under a different statute providing for cesses received to be included in calculating "total agricultural income", from which this amount, enhanced by the cess contributed by the assessee himself, is subsequently deducted as an allowance under Section

6. Employing recognized methods of construction, in relation to clause (7) of Section 6 it is quite clear that in the phrase "the cost of collection of such rent or revenue including, the cost of maintenance of any Katchari or other capital assets and any expenses of litigation" the word "such" makes it clear that the "rent or revenue" intended is that last previously mentioned. The clause must be read for this purpose as if it appeared immediately after the opening words of the section as the first item of allowance. The last previous mention of the words "rent or revenue" occurs in the in portion of Section 6 in the expression which has already been quoted-viz., "all rent and revenue including any local Cess or Education Cess' ..and reading clause (7) in this sense it becomes clear that it is intended to provide for a number of items of expenditure which may be compendiously described as collection costs, in respect of all rent and revenue including cesses. The specification of certain particular costs is not without meaning, as will appear from reference to clause (10), which reads as under: "Any other expenditure of the assessee, not being in the nature of capital expenditure or personal expenditure, laid out wholly and exclusively for .the purpose of deriving such agricultural income fro such land." It is obvious that by making a lump sum provisions for a certain number of specified items of expenditure, the Act provides against claims being made for such expenditure under the residuary clause. Coming now to the expression "rent or revenue" where it occurs in the clause for the second time, it is found to occur in a wholly different phrase, viz. "the total amount of rent or revenue which accrued to him in the previous year", and immediately after the expression is used for the third time in the phrase, "in respect of the land from which such rent or revenue is derived'". Again, in tile first proviso, the expression "the total amount of rent or revenue which accrued to him in the previous year in respect of the land from which such rent or revenue in derived" occurs at the end in this proviso, it was obviously not thought necessary to specify once again what sum it is in respect of which "actual cost of' collection" was being allowed. Now it is clear that it is open to the Legislature to make an allowance in respect of a certain item of income, by reference to some other amount ascertained, or to be ascertained, in such manner as it may specify. It is not necessary to assume that when the cost of collection of a particular sum is being allowed by an Act the allowance must be in terms of a proportion of that very sum. The Legislature may very well consider that the allowance should be calculated, for convenience in practice, or for the sake of revenue, or for any other reason of a public character, upon a different, or differently ascertained sum. Such an intention must be gathered from the words actually employed. In the statute, under examination, the terms employed to define the amount in proportion to which the allowance for costs is to be made differ materially from the description given to the amount for the collection of which such allowance is made. The distinction being clear and unambiguous, effect must be given to it, whether the result be in favour of the subject or otherwise. The existence of a difference was noticed by the learned Judges of the Dacca High Court, who have observed that the word "accrued" has been used m contradistinction to "receive" occurring in the main portion of Section

6. Understanding by this that differential meaning have been attached by the Legislature to the words "accrue" and "receive" there would appear to be no escape from the conclusion that the Legislature intended that the allowance in relation to one sum of money should be calculated as a percentage on a different sum of money. The argument that the words "accrued to him" are not be understood in a personal sense is devoid of basis and runs counter to the clear intendment of the words themselves. Whereas "receive" clearly connotes a specified sum passing into the possession of the receiver, the word "accrued", in the context, obviously means no more than that a right had arisen in a certain person to r8covery of a certain sum. The expression "accrued" in the context also, to my mind, carries plainly the sense of an accrual for the benefit of the person concerned, as distinguished from the sense of merely receiving money under legal obligation to pass it on to another person or authority, which is incidental to the recovery of cesses by an assessee. A further indication that by the use of the word "accrued" the Legislature intended something quite different from the meaning attached to the word "receive" appears very clearly in clause (8) of the same section, in the following words: "If the total amount of the rent or revenue received by the assessee in the previous year exceeds the total amount of rent and revenue which accrued to such assessee in the previous year by more than five per centum of such amount accrued." Clause (8) applies to a limited class of cases of special kind only, but a consideration of its terms, which include the expression "total amount of rent or revenue which accrued to such assessee in the previous year" is in my opinion, sufficient to indicate that the Legislature never intended to include cesses within the meaning of this expression. In this view of the statutory provisions governing the matter, it seems clear enough that the word "including" where it occurs in Section 4 is be understood in an addictive sense, and not in the constitutive sense contended for by learned counsel for the assessee. In my opinion, the affirmative answer given by the Dacca High Court to the second question referred to by the Agricultural Income-Tax Tribunal is incorrect. I would, therefore, allow this appeal with cost and substitute for the answer given by the Court, an answer in the negative. M.B.A./C-44/S Appeal allowed.