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TMI Blog2003 (9) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case, we may refer to section 17(2)(vi) of the Income-tax Act which states that for the purposes of sections 15 and 16 and of that section "perquisite" includes "the value of any other fringe benefit or amenity as may be prescribed". The expression "the value of any other fringe benefit or amenity as may be prescribed" was inserted by the Finance Act, 2001, with effect from April 1, 2002. Before the above amendment by the Finance Act, 2001, clause (vi) was not there in section 17(2) of the Act. Hence, before the aforesaid amendment section 17(2) which defines perquisite read as follows: "(i) the value of rent-free accommodation provided to the assessee by his employer; (ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer; (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases(a) by a company to an employee who is a director thereof; (b) by a company to an employee being a person who has a substantial interest in the company; (c) by any employer (including a company) to an employee to whom the provisions of paragraphs (a) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perquisite of accommodation would be 10 per cent. of the salary in cities having population exceeding 4 lakhs as per 1991 census, and 7.5 per cent. of the salary in other cities. It may be mentioned that section 2(33) of the Income-tax Act states that the word "prescribed" means prescribed by the rules made under the Act. Section 295 of the Income-tax Act confers power on the Central Board of Direct Taxes to make rules and rule 3 has been framed for the purposes of section 17(2)(vi). Annexure 1 to the writ petition is the new rule framed by the Central Board of Direct Taxes under section 295 read with section 17(2) of the Income-tax Act. A perusal of the same shows that the value of the perquisite provided to the employee directly or indirectly by the assessee or to any member of his household by reason of an employment shall be determined in accordance with the two tables appended to the notification. Table I deals with the value of residential accommodation, and Table II deals with the value of the perquisite of motor car and other benefits, amenities and fringe benefits. Since these are mentioned in great detail in annexure 1 we are not repeating the same. According to Webste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the function of the court to consider the propriety or justness of the tax, or enter upon the realm of legislative policy. If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied...." In our opinion, employees of the Government and employees of the public and private sector undertakings belong to two distinct and different classes. The nature of work, responsibility, and the service conditions including leave, salary and other allowances, etc., are different for these two classes. Hence, the classification of these two groups cannot be dubbed as arbitrary and discriminatory. Rule 3 of the rules framed by the Board in exercise of the powers under section 295 read with section 17(2)(vi) dealing with the advance of either interest free loans or loans at concessional rate of interest, by the employer to its employees results in benefit to the employee. It relieves the employee of his liability to pay interest on such loans if the employee is required to raise the loan from an outside agency. While it reduces his financial liability, it will have to be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976 SC 670; Amalgamated Tea Estate Co. Ltd. v. State of Kerala [1974] 94 ITR 479 (SC); [1975] UPTC 89, etc. A taxing statute is not open to attack on the ground that it taxes some persons or objects and not others. East India Tobacco Co. v. State of A. P., AIR 1962 SC 1733; [1962] 13 STC 529. The State has a wide discretion in selecting the objects or persons that it will tax, and in order to tax something it is not bound to tax everything. Orient Wvg. Mills (P.) Ltd. v. Union of India, AIR 1963 SC 98; State of M.P. v. Bhopal Sugar Industries [1964] 52 ITR 443 (SC) ; AIR 1964 SC 1179. It can pick and choose objects, areas, persons, rates of tax, etc. V. Venugopala Ravi Varma Rajah v. Union of India [1969] 74 ITR 49 (SC); AIR 1969 SC 1094; Gopal Narain v. State of U.P., AIR 1964 SC 370; Khyerbari Tea Co. Ltd. v. State of Assam, Air, 1964 SC 925; T.G. Venkataraman v. State of Madras, AIR 1970 SC 508; [1970] 25 STC 196, etc. The above decisions have been followed by the decision of this court in Lallooji and Sons v. State of U.P. [2003] UPTC 900. In Rapti Commission Agency v. State of U.P. [2003] UPTC 780, we have considered the scope of judicial review of a statute at great length ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Legislature than that the law should be aborted by judicial fiat. Such an assertion of judicial power deflects responsibility from those on whom in a democratic society it ultimately rests the people. Hence, rather than exercise judicial review courts should ordinarily allow Legislatures to correct their own mistakes wherever possible." Similarly in his dissenting judgment in New State Ice Co. v. Liebmann [1932] 285 US 262. Mr. Justice Brandeis, the renowned judge of the U.S. Supreme Court, observed that the Government must be left free to engage in social experiments. Progress in the social sciences, even as in the physical sciences, depends on "a process of trial and error" and courts must not interfere with necessary experiments. In the same decision Justice Brandeis also observed: "To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation." As Mr. Justice Holmes of the U.S. Supreme Court observed in this dissenting judgment in Tyson v. Banton 273 US 418: "I am far from saying that I think this particular law a wise and rational provision. That is not my af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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