Krishna Iyer, J. - (1.) -Keynote thought Politics and philanthropy may well fall victim to the construction of Sec. 5(a). and (j) of the Expenditure Tax Act, 1957 (the Act, for short) if we fall victim to the submission naively made, at the first stage, by counsel for the State. In fairness to him, we must state that later he retracted from that position, and rightly so, for the Act, in spirit and letter, does not intend this blow on the profession of politics or the disposition for donations.
(2.) A fair reading of the provisions in question convincingly excludes from 'taxable expenditure' sums wholly and exclusively incurred for the purpose of a profession or occupation carried on by the assessee and no modern man may dispute that politics is a profession or occupation. Likewise, expenditure by way of gift or donation incurred by the assessee is also excluded and no politically conscious soul will deny that donation to a party in a democracy squarely comes within this exclusionary provision. The factual matrix
(3.) Expenditure tax under the Act was sought to be levied from the assessee PVG Raju, the respondent before us. Paradoxical, perhaps it may appear - but here is a case of a rich Maharaja practising the politics of socialism, spending lavishly for furthering his party's popularity and the prospects of his fellow candidates at the elections to the Andhra Pradesh Legislative Assembly. This expenditure, falling under two heads, was taxed by the assessing authority and upheld up to the Tribunal level. The High Court, on reference, reversed the findings on both counts and the Commissioner of Expenditure Tax, the appellant, challenges the legality of this verdict.;