Shah, J. - (1.) This is a group of three appeals filed with certificate of fitness under Art. 132 of the Constitution issued by the High Court of Judicature, Orissa.
(2.) The Legislature of the Province of Orissa enacted the Orissa Agricultural Income-tax Act, XXIV of 1947 - hereinafter referred to as the Act - providing for the levy of income-tax on agricultural income derived from lands situated in the Province of Orissa. This Act was brought into operation from July 10, 1947. By S. 3, agricultural income-tax at the rate or rates specified in the schedule was made payable for each financial year on the total income of the previous year of every person. By the proviso to that section, agricultural income of the Central Government or of the State Government or of any local authority was exempt from taxation. Section 2, cl. (i) defined a "person" as inclusive of a Ruler of an Indian State. The appellant in these three appeals is the former Ruler of the State of Sonepur. After the establishment of the Dominion of India on August 15, 1947, the appellant as the Ruler of the State on Sonepur executed an instrument of accession to the Dominion restricted to three subjects - Defence, External Affairs and Communications. On December 15, 1947, he executed a merger agreement whereby the territory of the State of Sonepur became merged with the territory of the Dominion of India. By virtue of the merger agreement, the Government of India acquired full sovereign rights over the territory of the State, but ownership of private properties belonging to the appellant and full enjoyment thereof were under the agreement guaranteed to him under Art. 3. In exercise of the powers conferred by the Extra Provincial Jurisdiction Act. 47 of 1947, the Government of India by notification dated March 23, 1948, delegated to the Provincial Government of Orissa full powers to administer the merged State of Orissa including the State of Sonepur. The Government of the Province of Orissa applied to the merged States S. 1 of the Act as from January 19, 1949, and by notification dated April 1, 1949, the remaining provisions of the Act. In the meantime, by amendment, two new sections, Ss. 290 (A) and 290 (B) were incorporated in the Government of India Act, 1935. The Governor-General of India was thereby given power to direct by order that a merged State shall be administered in all respects as if it former part of the Governor's Province specified in the order. The Governor-General of India exercising authority under Ss. 290(A) and 290(B) issued on July 27, 1949, an order providing that the merged Orissa States including the State of Sonepur shall be administered in all respects as if they formed part of the Province of Orissa with effect from August 1, 1949. On December 30, 1949, the Governor of Orissa promulgated Ordinance No. IV of 1949 providing inter alia that the Agricultural Income-tax Act, 1947, be applied to the merged Orissa States. This Ordinance was later replaced by the Orissa Merged States (Laws) Act XVI of 1950. The appellant was then called upon by the Agricultural Income-tax Officer to furnish a return of his agricultural income. The appellant disputed his liability to pay the agricultural income-tax and declined to furnish the return. The Agricultural Income-tax Officer then proceeded to make enquiries about the income received from the lands held by the appellant and assessed him to pay tax for the years 1949-50 to 1953-54. He also imposed a penalty upon the appellant for failure to submit his returns for the years 1949-50 and 1950-51. Against the order assessing him to tax and directing him to pay penalty, the appellant preferred appeals to the Assistant Collector of Agricultural Income-tax, Sambalpur. The appeals were dismissed by that officer. Revision applications to the Collector of Commercial Taxes, Cuttack and to the Board of Revenue were unsuccessful.
(3.) The appellant filed four petitions in the High Court of Orissa, being Petitions Nos. 17, 16, 19 and 137 of 1954 challenging the assessments made by the taxing authorities for the years 1949-50, 1950-51, 1951-52 and 1952-53 respectively, and two more petitions being Petitions Nos. 18 and 138 of 1954 against the orders imposing penalty for the years 1949-50 and 1950-51 respectively. These six petitions and certain other petitions were heard by a Division Bench of the Orissa High Court. The High Court held that by the guarantee of full ownership, use and enjoyment of the private properties under the merger agreement the properties of the appellant were not rendered immune from liability to pay tax imposed by the Act and that in the absence of an express provision, his income from lands was liable to pay agricultural income-tax. The High Court also held that even though the appellant was the Ruler of a former Orissa State. He was a "person" within the meaning of the Act and was liable to pay agricultural income-tax. The learned Judges therefore dismissed the petitions challenging the liability of the appellant for the assessment years 1950-51, 1951-52 and 1952-53 to pays agricultural income-tax, and they cancelled the order of assessment in respect of the year 1949-50 and the orders imposing penalty in respect of years 1949-50 and 1950-51. Against the orders dismissing the applications for setting aside the assessments in respect of years 1950-51, 1951-52, and 1952-53, these appeals have been preferred with certificate granted by the High Court under Art. 132 of the Constitution.;