Justice Deoki Nandan Agarwala Vs. Union of India & ANR  INSC 186 (5
Syed Shah Mohammed Quadri BHARUCHA, J. :
appellant was a Judge of the Allahabad High Court. He filed his income tax
return for the Assessment Year 1978-79 on the basis that the salary that he
received as a Judge was not liable to tax under the Income Tax Act.
contention having been rejected both by the I.T.O. and in appeal, a special
leave petition was filed. Leave to appeal was granted and on 19th April, 1983 the following four questions were
referred by two learned Judges to a Constitution Bench:
Whether the salary of a Judge of the High Court of a State payable under cl.(1)
of Art. 221 of the Constitution and the salary of a Judge of the Supreme Court
payable under cl.(1) of Art. 125 is taxable by a law made by Parliament under
Entry 82 of List I of the Seventh Schedule.
Whether the expression Rupees in Part D of the Second Schedule which stipulates
the sums payable to the Judges of the Supreme Court and the Judges of the High
Court implies the purchasing power equivalent to the goods and services that
could be bought in the year 1950. That is to say, whether the salaries so fixed
should be construed as meaning their real value in terms of goods and services
which they could buy at the commencement of the Constitution or do they
represent their nominal value at any given point of time.
Whether the expression such allowances referred to in cl. (2) of Art. 125 and cl.(2)
of Art. 221 of the Constitution as payable to a Judge of the Supreme Court or a
Judge of the High Court of a State includes dearness allowance; and if it is
so, whether the dearness allowance as paid to them from February 1, 1978 is
relatable to these provisions as there appears to be no express law made by
Parliament for that purpose.
Whether the salary of a Judge of the Supreme Court payable under cl.(1) of Art.
125 or the salary of a Judge of the High Court of a State payable under cl.(1)
of Art. 221 is not taxable under the head Salaries; and, if it is so, is it
taxable under any other head of income referred to in S.14 of the Income Tax
appears that the second question arose on a writ petition which stood
transferred to this Court and which was withdrawn earlier today. This question
does not, therefore, survive for consideration. The third question, it is said
by learned counsel for the appellant, was raised suo moto by this Court and we
do not think, in the circumstances, that it should be answered.
counsel for the appellant concentrated on the first and fourth questions. The
fundamental question is whether the salary of a High Court Judge and a Supreme
Court Judge was liable to income tax prior to 1st April 1986. It must be stated here that it is not disputed that, with
effect from 1st April,
1986 when Articles 125
and 221 stood amended, such salaries are taxable because Parliament then became
entitled to legislate thereon.
contention on behalf of the appellant is that Parliament could not legislate,
prior to the said amendment, on the subject of the salaries of High Court and
Supreme Court Judges and that, therefore, their salaries were not liable to
income tax because the definition of income under the Income Tax Act includes
salary. The argument really is that the levy of income tax upon salary, by
Parliamentary enactment, cuts down the Judges salaries.
can be no doubt that prior to the said amendment Parliament could not have
legislated on Judges salaries, but it is a far cry to conclude therefrom that
the salary of a Judge is not taxable under the Income Tax Act. The subject of
the salary of a High Court and Supreme Court Judge and the subject of tax on
income are altogether different and the conclusion that is sought to be drawn
is quite unacceptable. The salary of a Judge of a High Court and the Supreme
Court is income and is taxable by Act of Parliament in just the same manner as
is the income of any other citizen.
contended qua the fourth question that, in any event, a Judge of a High Court
and the Supreme Court has no employer and, therefore, what he receives is not
what he receives as remuneration is not taxable under the head of salary under
the Income Tax Act. To our mind, there is a misconception here. It is true that
High Court and Supreme Court Judges have no employer, but that, ipso facto,
does not mean that they do not receive salaries.
are constitutional functionaries. Articles 125 and 221 of the Constitution deal
with the salaries of Supreme Court and High Court Judges respectively and
expressly state that what the Judges receive are salaries. It is not possible
to hold, therefore, that what Judges receive are not salaries or that such
salaries are not taxable as income under the head of salary.
appeal is dismissed.