(1.)In all these Civil Rules, the petitioners are the Maud Tea & Seed Company Ltd., Calcutta, and its director. In the petitioners' tea garden, tea bushes are grown and maintained and tea leaves are plucked from them and then carried to the factory maintained by the petitioners' estate for the purpose of being put through a manufacturing process, at the end of which the tea fit for marketing is produced. The income derived by the sale of the manufactured tea, therefore, comprises partly of the income derived from the agricultural produce and partly by the manufacturing process through which the tea leaves are put to until they reach the final shape and sold as tea in the market. The petitioners were charged to income-tax on the forty per cent. of the income and to agricultural income-tax under the Assam Agricultural Income-tax Act, 1939 (Act IX of 1939) (hereinafter referred to as "the Assam Act"), in respect of the balance of income of sixty per cent. under Rule 24 of the Rules framed under the Indian Income-tax Act, 1922, read with the provisions of the Assam Act and the Rules made thereunder. The petitioners object for the apportionment of the income derived by the petitioners at forty per cent. as business income assessable to income-tax and sixty per cent. as agricultural income assessable under the Assam Act as unconstitutional, ultra vires the powers of the legislature and, therefore, bad.
(2.)The argument of the petitioners is that the said apportionment is arbitrary, that it is done under the Rules framed by the Central Board of Revenue under the control of the Central Government, that the power to make the Rules delegated to the Central Board of Revenue, as aforesaid, is a naked power, unrestricted and uncanalised and enables the executive to decide in an arbitrary manner for the aforesaid apportionment. The contention, therefore, is that the delegation of the rule making power is excessive delegation and cannot be treated as valid inasmuch as, according to the petitioners, the delegation amounts to an abdication of the power of Parliament to decide the matter in question, leaving it exclusively for the rule making authority, namely, the Central Board of Revenue, under the control of the Central Government.
(3.)Before we consider the respective arguments of the counsel on either side, it would be useful to extract the relevant provisions which are the subject-matter of attack in these cases. We shall first refer to the provisions of the Assam Act. Section 2(a) of the Act defines "agricultural income" as follows:
"(a) 'Agricultural income' means--
(1) Any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in Assam or subject to a local rate assessed and collected by officers of the Government as such.
(2) Any income derived from such land by--
(i) agriculture, or
(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market, or .....
Explanation.--Agricultural income derived from such land by the cultivation of tea means that portion of the income derived from the cultivation, manufacture and sale of tea as is defined to be agricultural income for the purposes of the enactments relating to Indian income-tax."