SHASHIKANT LAXMAN KALE Vs. UNION OF INDIA
LAWS(SC)-1990-7-26
SUPREME COURT OF INDIA
Decided on
July 20,1990
SHASHIKANT LAXMAN KALE
Appellant
VERSUS
UNION OF INDIA
Respondents
Referred Judgements :-
A THANGAL KUNJU MUSALIAR M VENKATACHALAM POTTI AUTHORISED OFFICIAL AND INCOME TAX OFFICER VS. M VENKATACHALAM POTTI AUTHORISED OFFICIAL AND INCOME TAX OFFICER:A THANGAL KUNJU MUSALIAR [RELIED ON]PANNALAL BINJRAJ VS. UNION OF INDIA [RELIED ON]
EAST INDIA TOBACCO CO VS. STATE OF ANDHRA PRADESH; IN BOTH THE APPEALS [CITED]
STATE OF WEST BENGAL PLAINTIFF THE ADVOCATES GENERAL FOR THE STATES OF MADHYA PRADESH THE ADVOCATES GENERAL FOR THE STATES OF PUNJAB THE ADVOCATES GENERAL FOR THE STATES OF ASSAM THE ADVOCATES GENERAL FOR THE STATES OF ORISSA THE ADVOCATES GENERAL FOR T VS. UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFENDANT:UNION OF INDIA DEFE [RELIED ON]
HINDUSTAN ANTIBIOTICS LIMITED VS. WORKMEN [DISTINGUISHED]
S K DUTTA INCOME TAX OFFICER SALARYCURN S I B CIRCLE ASSAM VS. LAWRENCE SINGH INGTY [DISTINGUISHED]
JAIPUR HOSIERY MILLS PRIVATE LIMITED JAIPUR VS. STATE OF RAJASTHAN [CITED]
VIVIAN JOSEPH FERREIRA DR J EHANGIR RUSTOM SETHNA VS. MUNICIPAL CORPORATION OF GREATER BOMBAY:MUNICIPAL CORPORATION OF GREATER BOMBAY [CITED]
INCOME TAX OFFICER SHILLONG VS. R TAKIN ROY RYMBAI [RELIED ON]
RAMANA DAYARAM SHETTY VS. INTERNATIONAL AIRPORT AUTHORITY OF INDIA [CITED]
HINDUSTAN PAPER CORPN LIMITED VS. GOVERNMENT OF KERALA [RELIED ON]
P M ASHWATHANARAYANA SETTY LAVINA MANSIONS A ABDUL RAHIM SHERIF G RAMIAH CITY MUNICIPAL COUNCIL STATE BANK OF INDIA BANK OF BARODA S MOHMOOD IQBAL STATE OF MAHARASHTRA DR PRAFULLA CHANDRA VS. STATE OF KARNATAKA [RELIED ON]
FEDERATION OF HOTEL AND RESTAURANT ASSOCIATION OF INDIA VS. UNION OF INDIA [RELIED ON]
M JHANGIR BHATUSHA VS. UNION OF INDIA [RELIED ON]
KERALA HOTEL AND RESTAURANT ASSOCIATION STATE OF TAMIL NADU HOTEL ARATHY VADAKKANCHERRY VS. STATE OF KERALA:SANGU CHAKRA HOTELS PRIVATE LTD:STATE OF KERALA [RELIED ON]
Cited Judgements :-
UNION OF INDIA VS. ELPHANSTONE SPINNING AND WEAVING CO LTD [LAWS(SC)-2001-1-51] [REFERRED]LABOUR BAR ASSOCIATION SATNA VS. STATE OF MADHYA PRADESH [LAWS(MPH)-2008-8-22] [REFERRED TO]
HEM SINGH VS. STATE OF UTTARAKHAND [LAWS(UTN)-2019-5-150] [REFERRED TO]
Tamil Nadu Pollution Control Board VS. State Human Rights Commission Tamil Nadu [LAWS(MAD)-2004-11-13] [REFERRED TO]
NIKO RESOURCES LIMITED VS. UNION OF INDIA AND ORS. [LAWS(GJH)-2015-3-186] [REFERRED TO]
RAMESHCHANDRA SHAMJIBHAI RANIGA VS. STATE OF GUJARAT [LAWS(GJH)-2000-7-65] [REFERRED]
SMT. SADHNA VS. STATE OF U.P. AND 5 ORS. [LAWS(ALL)-2017-5-29] [REFERRED TO]
JAGDISH V SHETTY VS. COMMISSIONER OF POLICE; STATE OF MAHARASHTRA; NATIONAL AIDS CONTROL ORGANISATION; DISTRICT COLLECTOR OF PUNE [LAWS(BOM)-2006-4-205] [REFERRED]
GODREJ SARA LEE LIMITED VS. ASSISTANT COMMISSIONER (CT) INT LTU [LAWS(APH)-2017-6-63] [REFERRED TO]
ADITYA EDUCATIONAL SOCIETY VS. UNION OF INDIA [LAWS(APH)-2014-1-2] [REFERRED TO]
R. SURENDRAN VS. UNION OF INDIA [LAWS(KER)-2014-10-98] [REFERRED TO]
B. GOVINDRAJ HEGDE VS. STATE OF KARNATAKA AND OTHERS [LAWS(KAR)-2016-7-54] [REFERRED TO]
THRISSUR BUILDERS (P) LTD VS. COMMERCIAL TAX OFFICER [LAWS(KER)-2009-7-144] [REFERRED TO]
COMMISSIONER OF CENTRAL EXCISE VS. MEDICO LABS [LAWS(GJH)-2004-9-82] [REFERRED TO]
POULOSE VS. STATE OF KERALA [LAWS(KER)-1993-4-28] [REFERRED TO]
DALMIA INDUSTRIES LIMITED VS. STATE OF U P [LAWS(ALL)-1992-1-42] [REFERRED TO]
MICHAEL CHARLES DSOUZA VS. GANESH V. V. GAONKAR AND OTHERS [LAWS(BOM)-1991-1-78] [REFERRED TO]
NISHIKANT SUKERKAR VS. GOVERNMENT OF INDIA [LAWS(BOM)-2003-7-176] [REFERRED TO]
BALLARPUR INDUSTRIES LIMITED VS. UNION OF INDIA [LAWS(DLH)-1996-5-35] [REFERRED]
ALL INDIA FEDERATION OF TAX PRACTICTIONERS VS. UNION OF INDIA [LAWS(DLH)-1998-11-62] [REFERRED TO]
SUSHILA DEVI CHHABIL DASS CHARITABLE TRUST VS. STATE OF U P [LAWS(ALL)-2014-9-241] [REFERRED TO]
KARNATAKA LIVE BAND RESTAURANTS ASSOCIATION VS. STATE OF KARNATAKA [LAWS(SC)-2018-1-32] [REFERRED TO]
VENKATESWARA TIMBER DEPOT VS. UNION OF INDIA [LAWS(ORI)-1990-9-23] [REFERRED TO]
PRATAP NARAIN NEGI AND OTHERS VS. STATE OF UTTARAKHAND AND OTHERS [LAWS(UTN)-2019-5-52] [REFERRED TO]
STATE OF TELANGANA, REP., BY ITS PRL. SECRETARY, WOMEN AND CHILD WELFARE DEPARTMENT, TELANGANA SECRETARIAT VS. M/S. SRI VENKATESWARA INDUSTRIES, MAHABOBNAGAR, MAHABOOBNAGAR DISTRICT, REP., BY ITS PROPRIETOR B. DAMODAR REDDY [LAWS(APH)-2016-9-64] [REFERRED TO]
GOA SALARIED TAX PAYERS ASSOCIATION VS. UNION OF INDIA [LAWS(BOM)-2000-10-66] [REFERRED TO]
SCHOOL MANAGING COMMITTEE OF AMARAMUNDA GOVT PRIMARY SCHOOL VS. STATE OF ODISHA [LAWS(ORI)-2021-5-3] [REFERRED TO]
SHIBU JOSEPH VS. TOMY K.J. [LAWS(KER)-2013-10-145] [REFERRED TO]
STATE OF KARNATAKA AND ANOTHER VS. B. GOVINDRAJ HEGDE AND OTHERS [LAWS(KAR)-2017-1-118] [REFERRED TO]
BIPIN SYNTHETICS PVT LTD VS. STATE OF MAHARASHTRA [LAWS(BOM)-2009-7-201] [REFERRED TO]
SAINT TRAVEL SERVICES VS. UNION OF INDIA [LAWS(DLH)-2014-10-58] [REFERRED TO]
NAVNEET ARORA VS. SURENDER KAUR [LAWS(DLH)-2014-9-248] [REFERRED TO]
SUTHERLAND GLOBAL SERVICES PRIVATE LIMITED VS. ASSISTANT COMMISSIONER CGST AND CENTRAL EXCISE [LAWS(MAD)-2019-9-158] [REFERRED TO]
STATE OF MAHARASHTRA VS. INDIAN HOTEL & RESTAURANTS ASSN [LAWS(SC)-2013-7-93] [REFERRED]
SUPREME COURT ADVOCATE-ON-RECORD ASSOCIATION VS. UNION OF INDIA [LAWS(SC)-2015-10-80] [REFERRED TO]
ITD-CEMINDIA JV VS. COMMERCIAL TAX OFFICER [LAWS(MPH)-2010-8-104] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. BEL EMPLOYEES DEATH RELIEF FUND AND SERVICE BENEFIT FUND ASSN [LAWS(KAR)-1996-9-28] [REFERRED TO]
GUJARAT RAJYA DAIRY KARMACHARISABHA VS. MANAGING DIRECTOR [LAWS(GJH)-2001-5-10] [REFERRED TO]
NAGAI DISTRICT FARMERS WELFARE AND PROTECTION ASSOCIATION VS. STATE OF TAMIL NADU [LAWS(MAD)-1999-3-80] [REFERRED TO]
R GANDHI VS. UNION OF INDIA [LAWS(MAD)-1997-7-73] [REFERRED TO]
ASSOCIATION FOR DEMOCRATIC REFORMS VS. UNION OF INDIA [LAWS(DLH)-2014-3-156] [REFERRED TO]
M/S. JAIN ICE FACTORY VS. BSES RAJDHANI POWER LTD. [LAWS(DLH)-2006-11-262] [REFERRED TO]
MOHAMMAD AZIZUL HAQ S O MOHAMMAD ABDUL HAQ VS. STATE OF MAHARASHTRA [LAWS(BOM)-1992-6-27] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. KOODATHIL KALLYATAN AMBUJAKSHAN [LAWS(BOM)-2008-7-241] [REFERRED TO]
VIDARBHA HERITAGE SOCIETY NAGPUR VS. STATE OF MAHARASHTRA [LAWS(BOM)-2006-5-31] [REFERRED TO]
JINDAL STEEL AND POWER LTD VS. UNION OF INDIA [LAWS(DLH)-2011-12-249] [REFERRED TO]
INDIAN IRON AND STEEL CO LTD VS. SATYA DEV SINGH [LAWS(CAL)-1992-3-12] [REFERRED TO]
CELLULAR OPERATORS ASSOCIATION OF INDIA AND OTHERS VS. UNION OF INDIA AND ANOTHER [LAWS(DLH)-2018-2-79] [REFERRED TO]
DELTA CAR PVT.LTD. VS. SANJIV SHAH [LAWS(APH)-2014-7-167] [REFERRED TO]
M/S.DECCAN CHRONICLE HOLDINGS LTD VS. IL& FS TRUST CO. LTD. [LAWS(APH)-2015-12-53] [REFERRED TO]
A. MUTHYALA AND ORS. VS. STATE OF ANDHRA PRADESH AND ORS. [LAWS(APH)-2018-2-56] [REFERRED TO]
HARISH VITHAL KULKARNI VS. PRADEEP MAHADEV SABNIS [LAWS(BOM)-2009-12-92] [REFERRED TO]
DUNLOP INDIA LTD VS. OFFICER-IN-CHARGE OF SALES TAX CHECK POST WALAYAR [LAWS(KER)-1991-10-3] [REFERRED TO]
KALURAM KHANDE VS. STATE OF M P [LAWS(MPH)-2009-1-18] [REFERRED TO]
PRISM CEMENT LIMITED VS. STATE OF M.P. [LAWS(MPH)-2007-8-109] [REFERRED TO]
VATIKA FARMS PRIVATE LIMITED VS. UNION OF INDIA [LAWS(DLH)-2008-3-179] [REFERRED TO]
AVTAR SINGH AND ORS. VS. JASWINDER KAUR [LAWS(P&H)-2015-4-189] [REFERRED TO]
STATE OF ORISSA VS. MAHANADI COALFIELDS LIMITED [LAWS(SC)-1995-4-98] [RELIED ON]
A MANJULA BHASHINI VS. MANAGING DIRECTOR A P WOMENS COOPERATIVE FINANCE CORPORATION LTD [LAWS(SC)-2009-7-67] [REFERRED TO]
M MADHAVA GOWDA VS. UNDER SECRETARY TO GOVERNMENT [LAWS(KAR)-2015-9-481] [REFERRED]
FR WILLIAM FERNANDEZ VS. STATE OF KERALA [LAWS(KER)-1998-1-19] [REFERRED TO]
M P TRANSPORT WORKERS FEDERATION VS. STATE OF M P [LAWS(MPH)-2008-9-52] [REFERRED TO]
KAMLESH JIVANLAL DAVE VS. STATE OF GUJARAT [LAWS(GJH)-2024-5-13] [REFERRED TO]
AMIT HEMENDRA JHAVERI VS. UNION OF INDIA AND ORS. [LAWS(BOM)-2015-10-181] [REFERRED TO]
SUNIL KUMAR SHARMA AND ANOTHER VS. STATE OF U.P. [LAWS(ALL)-2017-10-324] [REFERRED TO]
RAJIV MOHAN MISHRA VS. INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD [LAWS(BOM)-2018-11-16] [REFERRED TO]
ALL INDIA BLUE STAR EMPLOYEES FEDERATION VS. UNION OF INDIA [LAWS(BOM)-1998-6-13] [REFERRED TO]
ESSAR STEEL LTD. VS. UNION OF INDIA (UOI) [LAWS(DLH)-2000-11-126] [REFERRED TO]
INDIAN HOTEL AND RESTAURANTS ASSOCIATION VS. STATE OF MAHARASHTRA [LAWS(BOM)-2006-4-36] [REFERRED TO]
MAMTA KANNAUJIA VS. STATE OF U P [LAWS(ALL)-2009-2-102] [REFERRED TO]
INDEPENDENT SUGAR CORPORATION LTD VS. GIRISH SRIRAM JUNEJA [LAWS(SC)-2025-1-123] [REFERRED TO]
JAI SINGH VS. UNION OF INDIA [LAWS(RAJ)-1993-1-21] [REFERRED TO]
GURUDEVDATTA VKSSS MARYADIT VS. STATE OF MAHARASHTRA [LAWS(SC)-2001-3-5] [REFERRED]
MAHANADI COALFIELDS LTD VS. STATE OF ORISSA [LAWS(ORI)-1994-4-24] [REFERRED TO]
K RAMAKRISHNAN VS. GOVERNMENT OF TAMILNADU [LAWS(MAD)-2007-3-156] [REFERRED TO]
JEET RAM KISHORE VS. SUNDER SINGH [LAWS(HPH)-2004-4-2] [REFERRED TO]
GEETHA PANDIT RAO VS. STATE OF KARNATAKA [LAWS(KAR)-2020-11-14] [REFERRED TO]
HEAVEN INN(BAR ATTACHED) VS. STATE OF KARNATAKA [LAWS(KAR)-2016-7-105] [REFERRED]
SANJAY BHULABHAI PATEL VS. PANKAJ VINODKUMAR PATNI [LAWS(GJH)-2022-8-1254] [REFERRED TO]
PETTA SATYA GOVINDA RAMACHANDRA RAO @ BABJI VS. YARLAGADDA VIJAYA KUMAR [LAWS(APH)-2014-2-53] [REFERRED TO]
KURAPATI BANGARAIAH VS. GOVERNMENT OF ANDHRA PRADESH [LAWS(APH)-2014-6-192] [REFERRED TO]
STATE BANK OF INDIA VS. SAMNEEL ENGINEERING COMPANY [LAWS(DLH)-1995-11-51] [REFERRED <SI><ACT>RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT,1993</ACT><S>S.2(G)<]
SRINIVASA RESORTS LIMITED VS. STATE OF A P [LAWS(APH)-2001-11-5] [REFERRED TO]
OSWAL AGRO MILLS LIMITED VS. COLLECTOR OF CENTRAL EXCISE [LAWS(SC)-1993-4-102] [REFERRED TO]
DHARMENDRA KIRTHAL VS. STATE OF U.P. [LAWS(SC)-2013-8-2] [REFERRED TO]
SWEDISH MATCH AB VS. SECURITIES AND EXCHANGE BOARD INDIA [LAWS(SC)-2004-8-122] [REFERRED TO]
VIJAY C PULJAL VS. STATE OF MAHARASHTRA [LAWS(BOM)-2005-9-100] [REFERRED TO]
B SAILESH SAXENA VS. UNION OF INDIA AND OTHERS [LAWS(APH)-2018-6-2] [REFERRED TO]
B. VENKATESWARLU VS. GOVERNMENT OF A.P. [LAWS(APH)-2014-3-3] [REFERRED TO]
RATTO VS. STATE OF H P [LAWS(HPH)-2003-6-2] [REFERRED TO]
MACHINJERI VS. STATE OF KERALA [LAWS(KER)-1991-11-29] [REFERRED TO]
JUDGEMENT
Verma, J. -
(1.)This petition under Article 32 of the Constitution challenges the constitutional validity of Cl. (10C) inserted in S. 10 of the Indian Income Tax Act, 1961 (hereinafter referred to as 'the Act') by the Finance Act, 1987 with effect from 1-4-1987. S. 10 deals with incomes not included in total income for the purpose of taxation under the Act. The effect of Cl. (10C) so inserted in S. 10 of the Act is that any payment received by an employee of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to the economic viability of such company and other relevant circumstances, approve in this behalf, is not included in the total income of such employee resulting in grant of tax exemption to that extent to him. The petitioners contend that the denial of this benefit to an employee of a private sector company at the time of his voluntary retirement amounts to an invidious. distinction between public sector employees and private sector employees in the matter of taxation and is arbitrary and unintelligible amounting to hostile discrimination.
(2.)The initial submission on behalf of the petitioners was that the aforesaid Cl. (10C) of S. 10 of the Act is constitutionally invalid for this reason. However, during the course of arguments the stand of the petitioners was modified to contend that the provisions must be so construed as to apply to all employees equally, whether of the public or private sector, in order to uphold its validity. The question, therefore, is whether there is any such hostile discrimination as alleged by the petitioners and if so, is it possible to construe the provision in the manner suggested on behalf of the petitioners to apply it equally to all employees of the public as well as private sectors
(3.)The first petitioner is an employee of second respondent - Peico Electronic and Electricals Limited, a private sector company and the second petitioner is a registered trade union representing the employees of the second respondent-company. Counsel for the second respondent-company sought to support the petitioner's case. Counsel for the first respondent supporting the validity of the provision indicated that employees of the public sector constituted a distinct class for the purpose of taxation so that there was no discrimination between employees of the same class if the real object of the provision is borne in mind. We shall refer to the arguments of the two sides in some detail later. Chapter III of the Indian Income Tax Act, 1961 relates to "incomes which do not form part of the total income". S. 10 in Chapter III deals with "incomes not included in total income". It provides that in computing the total income of a previous year of any person, any income failing within any of the clauses therein shall not be included. The several clauses in S. 10 specify different incomes which would ordinarily be included in the total income of the assessee for the purpose of taxation but for such a provision. Cl. (10C) of S. 10 is as under:-
"(10C):- Any payment received by an employee of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to -the economic viability of such company and other relevant circumstances, approve in this behalf."
(2.)The initial submission on behalf of the petitioners was that the aforesaid Cl. (10C) of S. 10 of the Act is constitutionally invalid for this reason. However, during the course of arguments the stand of the petitioners was modified to contend that the provisions must be so construed as to apply to all employees equally, whether of the public or private sector, in order to uphold its validity. The question, therefore, is whether there is any such hostile discrimination as alleged by the petitioners and if so, is it possible to construe the provision in the manner suggested on behalf of the petitioners to apply it equally to all employees of the public as well as private sectors
(3.)The first petitioner is an employee of second respondent - Peico Electronic and Electricals Limited, a private sector company and the second petitioner is a registered trade union representing the employees of the second respondent-company. Counsel for the second respondent-company sought to support the petitioner's case. Counsel for the first respondent supporting the validity of the provision indicated that employees of the public sector constituted a distinct class for the purpose of taxation so that there was no discrimination between employees of the same class if the real object of the provision is borne in mind. We shall refer to the arguments of the two sides in some detail later. Chapter III of the Indian Income Tax Act, 1961 relates to "incomes which do not form part of the total income". S. 10 in Chapter III deals with "incomes not included in total income". It provides that in computing the total income of a previous year of any person, any income failing within any of the clauses therein shall not be included. The several clauses in S. 10 specify different incomes which would ordinarily be included in the total income of the assessee for the purpose of taxation but for such a provision. Cl. (10C) of S. 10 is as under:-
"(10C):- Any payment received by an employee of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to -the economic viability of such company and other relevant circumstances, approve in this behalf."
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