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TMI Blog1965 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted by the appropriate authorities in payment of the agricultural income-tax due from them. The facts leading to the appeal, in brief, are that the respondent, an ex-Zamindar, was assessed to agricultural income-tax in the assessment year 1360 F. corresponding to 1952-53, on the basis of the agricultural income accruing in the previous year 1359 F. corresponding to 1951-52. He did not pay the assessed tax and was further assessed to a penalty. In the result, Rs. 868 were to be paid by him for tax plus penalty. The respondent's writ petition contending that he was not liable to pay tax was dismissed by the High Court. Thereafter, the agricultural income-tax authorities took out proceedings for the realisation of the amount due from h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mentioned in support of the prayers were that the bonds were negotiable instruments and therefore refusal to accept them in payment of agricultural income-tax dues was illegal, that they, having been issued by Government, could not be subsequently refused, they being perfectly valid legal tender and that in view of rule 8-A of the Rules made under the Act the amount due for tax should have been deducted from the interim compensation. The counter-affidavit filed by the Naib-Tehsildar Agricultural Income-tax Officer, Allahabad, on behalf of the State, stated that the respondent was assessed to agricultural income-tax in the assessment year commencing from July 1, 1952, on the income derived in the previous year commencing from July 1, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant before us is that neither section 6(d) of the Act nor rule 8-A provides that bonds can be accepted in payment of agricultural income-tax and that therefore the order of the Collector dated August 24, 1956, was correct. For the respondent it is urged that rule 8-A makes it mandatory for the Agricultural Income-tax Officer to realise the agricultural income-tax due from the compensation payable and that compensation continues to be payable till the bonds are actually encashed. Section 6(d) of the Act, as originally enacted, did not provide, among the consequences of the vesting of the estate in the State, that arrears on account of agricultural income-tax might be realised by deducting the amount from the compensation money payable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to him, and (b) in the case of an intermediary who was assessed to a land revenue of less than Rs. 10,000 per annum by deduction from the amount of compensation payable to him. " It is clear from the above provisions that neither section 6(d) nor rule 8-A provide that bonds must or can be accepted in payment of tax on agricultural income. It has been held by this court in Collector of Sultanpur v. Raja Jagdish Prasad Sahi that the provisions of section 6(d) of the Act would apply to arrears on account of agricultural income-tax assessed in 1360 F. on the basis of agricultural income during the year 1359 F. and that the provisions of rule 8-A are mandatory. It is not urged for the appellant that rule 8A is inconsistent with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing from the date of vesting, provided that any bond might be redeemed at an earlier date at the option of the Government. Rule 65 provided that the instalments due on a bond from the date of its enfacement would be payable on presentation from and after July 1st next after the delivery of the bond to the intermediary. These rules show that the compensation does not remain payable after the delivery of the bonds and that the bonds could not be cashed before the due date for their encashment. 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. The only result of their being treated as negotiable instruments is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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