- (1.) In this application the question that arises for consideration, is whether the Income-tax Act, 1961 contains levies on capital assets and therefore to that extent Wealth Tax Act, 1957 containing those levies has been impliedly repealed. This question arises in this application under Article 226 of the Constitution of India.
(2.) At all the material times the petitioner had income from house property and land shares in companies and had earned certain income as directors remuneration. The petitioner is also an assessee under the Wealth Tax Act and on the 12th of February, 1964 the petitioner was assessed to wealth tax for the assessment year 1962-63 under S. 16 (5) of the Wealth Tax Act, 1957 on a net total wealth of Rs. 10,00,000/-. On the 20th of February, 1964 Income-tax-cum-Wealth-tax Officer served a notice of demand directing the petitioner to pay wealth-tax of Rs. 8,000/- for the aforesaid assessment year. The petitioner presented an appeal to the Appellate Assistant Commissioner of Wealth Tax, Range-C, Calcutta, against the quantum of assessment. The Appellate Assistant Commissioner, however, by his order dated the 22nd of April, 1964 confirmed the assessment and dismissed the appeal. The petitioner, thereafter, presented an appeal before the Income-tax Appellate Tribunal on the 12th of May, 1967 dismissed the appeal. In the meantime the petitioner was assessed to income-tax for the aforesaid assessment year 1962-63 on the 27th of December, 1965 on the total income of Rs. 39,864/- which sum included capital gains of Rupees 10,723/- for the previous year ending on the 31st of March, 1962. The said capital gains according to the computations arose from the transfer of capital asset, namely, 37/1 Jatindra Mohan Avenue premises which was owned by the petitioner along with his brother, each having equal share. The petitioner preferred an appeal against the aforesaid assessment before the Appellate Assistant Commissioner and thereafter before the Appellate Tribunal but was unsuccessful before both the Authorities. On the 30th of March, 1965 the Income-tax-cum-Wealth-tax Officer forwarded a certificate under sub-sec. (2) of Section 46 of the Indian Income-tax Act, 1922, as applied for the purpose of wealth-tax by Section 32 of the Wealth Tax Act 1957, to the Collector, 24-Parganas, for the recovery of the wealth tax of Rs. 8,000/-. The Certificate Officer, Alipore, issued a notice on the 22nd of December, 1965 under Rule 2 of the Second Schedule the Income-tax Act, 1961. The petitioner filed objection and the Tax Recovery Officer by his order dated the 30th of May, 1968 overruled the said objection. Thereafter, the petitioner presented an appeal to the Additional District Magistrate, 24-Parganas, who by his order dated the 24th of September, 1969 allowed the objection and vacated the proceedings under the Second Schedule to the Income-tax Act, 1961, and directed the Certificate the Certificate Officer to proceed in accordance with law. Thereupon the Certificate Officer filed a certificate under Sec. 4 of the Bengal Public Demands Recovery Act, 1913, in pursuance of the certificate forwarded by respondent No. 2, being the Income-tax-cum-Wealth-tax Officer under . On receipt of the said notice under Section 7 of the Bengal Public Demands Recovery Act, 1913, the petitioner filed objection denying his liability, contending, inter alia that the impugned certificate related to wealth-tax and the Wealth Tax Act, 1957 had been impliedly repealed with effect from the 1st of April, 1962 when the Income-tax Act, 1961 came into force. The said Certificate Officer by his order dated the 21st August, 1971 heard the objection and overruled the same. The petitioner challenges the said order of the Certificate Officer in this application under Article 226 of the Constitution and the petitioner also challenges the assessment of wealth-tax for the aforesaid assessment year.
(3.) Various points had been taken in this petition under Article 226 of the Constitution but Counsel for the petitioner urged only aspect of the matter. He and tax on capital assets having been introduced therein, in the said Income-tax Act, 1961, the Wealth Tax Act, 1957 so far as assessment year 1962-63 was concerned had ceased to exist. He drew my attention to Section 12-B of the Indian Income-tax Act, 1922 and Finance Act (No. 3), 1956, being Act No. 77 of 1956 which introduced capital gains tax in Section 12-B of the Indian Income-tax Act, 1922. He also drew my attention to the relevant provisions, i.e. Section 4, Section 45, Section 52 and S. 69 of the Income-tax Act, 1961. He also referred to the relevant provisions of the Wealth Tax Act, 1957 and referred to Sec.3 which is the charging section and the definition of "valuation date" in S. 2(q) of the Wealth Tax Act, 1957 and S. 2(11) of the Indian Income-tax Act, 1922. He also drew my attention to the definition of "net wealth" as provided in Section 2(m) of the Wealth Tax Act, 1957. He also referred me to Section 7 of the Wealth Tax Act, 1957 indicating that how the value of any asset other than cash for the purpose of the Wealth Tax Act had to be determined. The preamble to the Income-tax Act, 1961 was relied upon by him. In short his submission was that Section 4 of the Income-tax Act, 1961 read with Section 45, Section 52, Section 68, Section 69, Sections 69-A and 69-B of the Income-tax Act, 1961 were sections which essentially imposed taxes on the capital value of the assets and therefore tax on those items could have only been levied by virtue of entry 86 of list I of the 7th Schedule of Constitution. Sec. 3 read with Sec. 2 (m) of the Wealth Tax Act, 1957 in conjunction with Sec. 7 of the said Act, it was argued by Counsel for the petitioner, imposed levies on the value of the capital assets and that could only be justified, according to the Counsel for the petitioner, by virtue of the power of the Parliament as contained in entry 86 of list I of the 7th schedule to the Constitution. Counsel for the petitioner submitted that under our Constitution there could not be more than one imposition on the same subject by virtue of the competency enumerated in the legislative lists. According to him the two legislations on the same subject by virtue of the power in the items of the legislative list could not co-exist. He referred to the preamble of the Income-tax Act, 1961. The said preamble provides, that the Act was to consolidate and amend the law relating to income-tax and super-tax. He submitted that the object was to consolidate the other existing tax laws with a view to bring these within one Code complete in itself. In this connection Counsel referred me to the decision of the Judicial Committee in the case of the Administrator-General of Bengal vs. Premlal Mullick.,ILR 1895 Cal 788 . Counsel drew my attention to the observations of Lord Watson appearing at p. 798 of the report to the effect that the very object of consolidation was to collect statutory law bearing upon a particular subject, and to bring it down date in order that it might form a useful code applicable to the circumstance existing at the time when the consolidating Act was passed. Relying on the aforesaid observations, Counsel submitted, the purpose of the Income-tax Act, 1961 was to consolidate all other taxation laws and, therefore, the imposition of levies on the capital value of the assets contained in other taxation provisions stood abrogated. Item 82 of List 1 of the 7th Schedule to the Constitution empowers Parliament to impose taxes on income other than agricultural income. It is identical to entry 54 of list 1 of the Government of India Act, 1935. Entry 86 of list 1 of 7th schedule empowers the Parliament to impose taxes on the capital value of assets, exclusive of agricultural land, on individuals and companies and also taxes on the capital of companies. It is in identical terms with entry 55 of list 1 of the Government of India Act, 1935. Entry 97 of list of the 7th Schedule empowers the Parliament to legislate on any other matter not enumerated in list II or list III including any taxes not mentioned in either of those lists.;