- (1.) An identical question of law arises for consideration in this batch of three appeals. The appellant is the same firm in all the three appeals. The appellant-assessee is a public limited company carrying on inter alia the business of exporting chillies to United States America, USSR and Ceylon. The only question that arises for consideration is "whether the appellant is an 'industrial company' as defined in the respective Finance Act and can therefore be taxed only at 55% The revenue is the respondent in all the appeals.
(2.) Civil Appeal No. 3637 of 1983 is filed against the judgment of the Madras High Court dated 18-12-1981 in Tax Case No. 469 of 1978 (Reference No. 289 of 1978) and relates to the assessment year 1974-75. Civil Appeal No. 8017 of 1995 is preferred against the judgment of the same High Court dated 4-4-1995 in Tax Case No. 998 of 1982 and relates to the assessment year 1976-77 (Judgment of the High Court is reported in 220 ITR 411). Civil Appeal No. 15346 of 1996 is preferred against the judgment of the same High Court dated 27-6-1996 in Tax Case (Reference) No. 893 of 1984 and relates to the assessment year 1977-78. Regarding the assessment year 1974-75, we are concerned with the Finance Act of 1974, Section 2(8)(c); for the assessment year 1974-75, we are concerned with the Finance Act of 1974, Section 2(8)(c); for the assessment year 1976-77 Finance Act, 1976, Section 2(9)(c); and for the assessment year 1997-78 Finance Act No. 2 of 1997 Section 2(7)(c). A similar provision occurring as Section 2(6)(c) of the Finance Act No. 2 of 1971 and relating to the income tax assessment of the appellant for the assessment year 1971-72 was construed by the Madras High Court and the decision was rendered on 8-12-1977 and the judgment was rendered on 8-12-1977 and the judgment is reported as Additional Commr. of Income-tax, Madras-I v. Chillies Export House Ltd., (1978) 115 ITR 73.
(3.) Since the language of different Finance Acts relating to the issue in controversy is substantially the same, we shall quote the earliest provision contained in the Finance Act of 1974 relating to the assessment year 1974-75. It is as follows :- "2. Income-tax - (8) For the purpose of this section and the First Schedule, - (a) to (b) .... (c) "Industrial company" means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining." xxx xxx xxx xxx "Paragraph F In the case of a company, other than the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), - Rates of income-tax 1. In the case of a domestic company ,_ (1) Whether the company is a company in which the public are substantially interested - (i) in a case where the total income does not exceed Rs 1,00,000 45 per cent of the total income; (ii) in a case where the total income exceeds Rs 1,00,000 55 per cent of the total income; (2) Where the company is not a company in which the public are substantially interested, - (i) in the case of an industrial company - (a) on so much of the total income as does not exceed Rs 2,00,000 55 per cent.;" (Emphasis supplied);