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1965 (2) TMI 7 - SC - Indian LawsWhether Zamindari Abolition Compensation Bonds issued by the U. P. Government to intermediaries in payment of compensation payable on the basis of their rights under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 have to be accepted by the appropriate authorities in payment of the agricultural income-tax due from them? Held that:- The fact that the bonds are negotiable does not make them legal tender and does not make it obligatory on anyone, including Government, to accept them in payment of any dues. When the compensation payable to an intermediary has been paid in the form of cash or bonds, that compensation ceases to be payable. Section 6(4) of the Act and rule 8-A of the rules do not, as already stated, provide for the receipt of agricultural income-tax in the form of bonds. We are therefore of opinion that the Collector cannot be said to be in error in not accepting the bonds which had been delivered and which were not even cashable at the time, in payment of the arrears of agricultural income-tax payable under the Agricultural Income-tax Act. Allow the appeal, set aside the order of the High Court and restore that of the Collector dated August 24, 1956
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