IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 5TH DECEMBER 2008 / 14TH AGRAHAYANA 1930 OP.No. 24537 of 2001(U) ----------------------- PETITIONER(S): --------------- 1. P.P.ANTONY, PARACKA HOUSE, BENNET ROAD, TRICHUR. 2. P.P.GEORGE, .DO. .DO. 3. P.P.JESSY, .DO. .DO. 4. P.P.THARU, .DO. .DO. 5. P.P.SCARIA, .DO. .DO. 6. P.P.JOSEPH, .DO. .DO. 7. P.P.SEBASTIAN, .DO. 8. ALIAKUTTY PAUL, .DO. BY ADV. SRI.T.R.RAVI RESPONDENT(S): --------------- 1. STATE OF KERALA REP. BY CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, TRIVANDRUM. 2. AGRICULTURAL INCOME TAX & SALES TAX OFFICER, TRICHUR. ADDL. RESPONDENT: 3. SPECIAL DEPUTY TAHSILDAR FOR AIT & ST COLLECTIONS, THRISSUR. (ADDL. RESPONDENT IS IMPLEADED AS PER ORDER DT.18.12.2002 IN C.M.P. NO.63618/2002.) BY G.P. SRI.TEKCHAND THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 05/12/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON CMP NOS.40137 & 47813/2001 & 63619/2002 IN O.P. NO.24537/2001 DISMISSED: 5.12.2008 SD/-(C.N.RAMACHANDRAN NAIR, JUDGE.) APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF ASSESSMENT ORDER RELATING TO 8TH PETITIONER FOR THE ASSESSMENT YEAR 1997-98. P2: .DO. 1998-99. P3: .DO. 1999-2000. P4: TRUE COPY OF NOTICE DT.2.7.01 ISSUED TO THE PETITIONERS. P5: TRUE COPY OF ASSESSMENT ORDER DT.21.8.2001. P6: TRUE COPY OF DEMAND NOTICE DT.17.9.2001. P7: TRUE COPY OF DEMAND NOTICE DT.7.12.2002 U/S.7 OF THE R.R. ACT. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... O.P. No.24537 of 2001 .................................................................... Dated this the 5th day of December, 2008. JUDGMENT The petitioners are challenging the amendment introduced to the Agricultural Income Tax Act, 1991 by Finance Act 1999 with effect from 1.4.2000 whereby sub-section (2) of Section 3 was deleted from the Act. The provision that existed prior to the deletion is the following: "Subject to the provisions of this Act, in the case of persons holding property as tenants-in-common and deriving agricultural income, the tax shall be assessed at the rate applicable to the agricultural income of each tenant-in-common." Section 3(2) prior to its deletion provided for separate assessment of each tenant-in-common at the rate of tax applicable for such tenant. However, after the amendment, assessment will be made on the total agricultural income of the tenants-in-common treating it as an assessee. In fact, it is seen from Ext.P4 notice that assessment is made in the status of tenants-in- common, but at the compounded rate provided under Section 13 read with Rule 16 of the Agricultural Income Tax Rules. The petitioners' case is that the amendment is arbitrary because the combined liability of the tenants-in- common is much higher than the total liability of all the tenants-in-common put together, if separate assessments are made. I do not think the increased 2 liability on account of change in scheme of assessment after the amendment is a ground to challenge the amendment. Tenants-in-common is defined under Section 2(25) as follows: "tenants-in-common" means two or more persons owning or managing property jointly, having therein equal or unequal shares either by the same or different titles or by intestate succession. In fact, simultaneous to the deletion of Section 3(2), definition of "person" contained in clause (20) of Section 2 was amended to include tenants-in- common also. Consequent to this amendment, the tenants-in-common falls within the definition of "assessee" as defined under Section 2(7) of the Act. The classification of assessee and prescription of rate of tax are essentially matters of legislative policy. It is the settled position that in the matter of levy of tax, Legislature enjoys wide discretion and it is upto them to identify assessees and prescribe the rate of tax. I do not find any illegality or arbitrariness in providing for tax on persons holding land as tenants-in- common. The O.P. is, therefore, devoid of any merit and is dismissed. C.N.RAMACHANDRAN NAIR Judge pms