Southern Roadways Private Ltd. Vs.
Union of India & ANR  INSC 7 (16 January 1962)
Income Tax-Development Rebate-Disallowance on
office appliances and transport vehicles If discriminatory-Income-tax Act, 1922
(11 of 1922) as amended by the Taxation Laws (Amendment) Act (28 of 1960, s.
10(2) (vi-b) second proviso.
The assessee company owned a fleet of buses
and carried on the business of transport. The income-tax officer disallowed
development rebate on the transport vehicles owned by the company as provided
by the second proviso to s. 10(2) (vi-b) of the Income-tax Act. The company
challenged the section on the ground that the said proviso offends Art. 14 in
that it discriminates between machinery which is office appliances or road
transport vehicles and other kinds of machinery.
^ Held, that there is nothing in the
Constitution which prevents the Legislature from choosing the objects of
taxation from amongst various classes of machinery for purpose of giving
ORIGINAL JURISDICTION: Petition No. 143 of
Petition under Art. 32 of the Constitution of
India for the enforcement of Fundamental rights.
S. Swaminathan and R. Gopalakrishnan, for the
K. N. Rajagopala Sastri and P. D. Menon, for
595 1962. January 16. The Judgment of the
Court was delivered by KAPUR,J.-This is a petition by the assessee under Art.
32 of the Constitution challenging the constitutionality of the second proviso
10(2) (vi-b) of Income tax Act introduced by
The Taxation Laws (Amendment) Act (28 of 1960). The relevant section with the
proviso is as follows:- S. 10(1) "The tax shall be payable by an assessee
under the head "Profits and gains of business, profession or
vocation" in respect of the profits or gains of any business, profession
or vocation carried on by him.
(2) Such profits or gains shall be computed
after making the following allowances, namely:
(vi-b) in respect of machinery or plant being
new, which has been installed after the 31st day of March, 1954, and which is
wholly used for the purposes of the business carried on by the assessee, a sum
by way of development rebate in respect of the year of installation equivalent
to twenty-five per cent of the actual cost of such machinery or plant to the
Provided that no allowance under this clause
shall be made unless the particulars prescribed for the purpose of clause (vi)
have been furnished by the assessee in respect of such machinery or plant;
Provided further that no allowance under this
clause shall be made in respect of any machinery or plant which consist of
office appliances or road transport vehicles." The petitioner is a limited
company with its registered office at Madurai in the State of Madras 596 which
owns a fleet of buses and lorries and carries on the business of transport In
respect of assessment year 1960-61 it claimed a development rebate on all its
plants and machinery including business. The Income tax Officer disallowed the
claim of rebate on transport vehicles under the proviso above quoted and
computed the tax payable without such rebate. It was contended on behalf of the
petitioner that the proviso offends Art. 14 in that it discriminates between
machinery which is office appliance or road transport vehicles and other kind
of machinery. It is difficult to accept such a contention because there is
nothing in the Constitution which prevents the legislature from choosing the
object of taxation from amongst various classes of machinery for the purpose of
giving development rebate. The Constitution does not prohibit any such
classification which has been made in the present case.
The petition is wholly without merit and is
therefore dismissed and the rule is discharged.
The petitioner will pay the costs of the