Case: Karimtharuvi Tea Estate Ltd Vs. State Of Kerala

For the assessment year 1957-58, the appellant company was assessed to agricultural income-tax under the Kerala Agricultural Income-tax Act, 1950. In the assessment, a surcharge at the rate of 5 per cent on the agricultural income-tax and super tax was also levied and collected from the appellant under the provisions of the Surcharge Act.3. The appellant appealed to the Deputy Commissioner of Agricultural Income-tax and Sales Tax, South Zone, Quilon, objecting to the imposition of surcharge on the ground that the law applicable to assessment for 1957-58 under the provisions of the Agricultural Income-tax Act was the law in force on April 1, 1957 and as the Surcharge Act which came into force only from September 1, 1957 did not have any retrospective effect the surcharge could not be levied for that year. By his order, dated November 14, 1959, the Deputy Commissioner rejected these objections.4. Thereupon, the appellant preferred a further appeal to the Kerala Agricultural Income-tax Appellate Tribunal, Trivandrum. By its order, dated August 2, 1961, the appellate Tribunal upheld the contention of the appellant holding that the Surcharge Act could not have retrospective operation unless there was a specific provision therein to that effect.5. On the application of the respondent, the Tribunal stated a case to the Kerala High Court and referred the following question of lawany surcharge can be levied on the agricultural income-tax payable for the assessment yearjudgment, dated July 25, 1963, the Division Bench of the High Court answered the question in the affirmative, against the appellant. The appellant then applied to this Court and obtained special leave to appeal against the judgment and order of the High Court.

Reasoning: 8.Now, it is well-settled that the Income-tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force.In the instant case, there is no escape from the conclusion that the Surcharge Act not being retrospective by express intendment, or necessary implication, it cannot be made applicable from April 1, 1957, as the Act came into force from September 1, of that year.14. TheSurcharge Act having come into force on September 1, 1957, and the said Act not being retrospective in operation, it could not be regarded as law in force at the commencement of the year of assessment 1957-58. Since the Surcharge Act was not the law in force on April 1, 1957, no surcharge could be levied under the said Act against the appellant in the assessment year 1957-58.