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Judgment
Natesan, J.—These two second appeals from a judgment of reversal on appeal raise a common question of law in the interpretation of the Madras Plantations Agricultural Income tax Act (Amendment) Act 1658. The suits are for refund of the surcharge on land revenue collected from the plaintiff in each suit under the Madras Land Revenue (Surcharge) Act, Act XIX of 1954, for the fasli year 1957-58. The refund is claimed under S. 33 of the Madras Plantations Agricultural Income tax (Amendment, Act, Act XXIX of 1958. The plaintiff in each of the suits is a wholly religious institution and had paid land revenue surcharge for the fasli year 1957-58 under the Madras Land Revenue (Surcharge) Act of 1954. The institutions are exempt from taxation under Madras Act XXIX of 1958 by S. 4-b of the Madras Agricultural income tax (Amendment) Act 1958. S. 31 of the Madras Act XXIX of 1958 repealed the Madras Land Revenue (Surcharge) Act 1954. S. 33 of the Act provided for the adjustment of the surcharge collected under Act XIX of 1954 for the fasli year 1957-58 towards the Agricultural income tax payable under the Madras Agricultural Income tax Act as amended by Act XXIX of 1958 for the financial year 1958-59, and refund of the surcharge, it in excess or if there was no adjustment. The State evidently having regard to the fact, that Madras Act XIX of 1954 was repealed only with effect from 1st April 1958, refunded one fourth of the surcharge collected for fasli 1367, that is for the fasli year 1st July 1957 to 30th June 1958. From 1st April 1958 by the provisions of Act XXIX of 1958, the plaintiff ceased to be liable for the surcharge and they were not liable by reason of the exemption granted under S. 4-b of the Principal Act for taxation under the new Act. S. 3 of the Madras Land Revenue (surcharge) Act, Act XIX of 1954, under which the tax was paid states:
Every landholder who is liable to pay a sum exceeding Rs. 500 for a fasli as land revenue to the Government in respect of lands held by him in the State shall pay to the Government for that fasli a surcharge on the land revenue payable by him in respect of all the lands held by him, at the following rates......
S. 4 of the Act provided for the recovery of the surcharge as the land revenue. By Act XXX of 1955 a further surcharge on land revenue assessment was provided for. What is collected as surcharge under this Act is clearly an excess or additional burden to the money already surcharged. Manifestly surcharge on land revenue partakes the character of land revenue and is in effect and in substance an additional land revenue. The State collects additional revenue under a different nomenclature, it is paid for the fasli year in question and in the instant case it has been realised for the fasli year 1367. The final assessment and demand for fasli 1366 was served on the plaintiff in S.A. 1621 of 1964 on 30th June 1958. The provisional assessment and demand of surcharge for fasli 1367 was made on 22nd July 1958 and the plaintiff deposited the amount of surcharge claimed on 30th August 1958. The plaintiff in S.A. 448 of 1964 paid the surcharge for the year 1957-58 on 2nd February 1958. Madras Act XXIX of 1958 received the assent of the Governor on 24th October 1958 and it was published in the Fort St. George Gazette on 29th October, 1958. Notwithstanding this S. 2 of Act XXIX of 1958 specifically provided that the Act was to be deemed to have come into force on 1st April, 1958, that is the Act became applicable with retrospective effect from 1st April, 1958. S. 4 made the lands coming under the Agricultural Income tax for the first time as subject to tax only from the financial year commencing from 1st April, 1958, The relevant sections of this Act for the present enquiry are S. 31 and S. 33, which run thus:
S. 31. The Madras Land Revenue (Surcharge) Act 1954 Madras Act XIX of 1954 is hereby repealed;
Provided that such repeal shall not a affect the previous operation of the said Act or anything already done or suffered, or any right, title or obligation or liability already acquired accrued, or incurred, or any remedy or proceeding in respect thereof.
S. 33 : Any surcharge on the land revenue collected from any person under the Madras Land Revenue (Surcharge) Act 1954 (Madras Act XIX of 1954) for the fasli year 1957-58 shall be adjusted towards the agricultural Income tax due from such person under the principal Act as amended by this Act for the financial year 1958-59 and if on such adjustment the surcharge is in excess, such excess or if no such adjustment be made, such surcharge shall be refunded to the person concerned.
The assesses contend that as they were not liable for any agricultural income tax (on this there is no dispute and it is the admitted case that they are exempt from the agricultural income tax by S. 4-b of the Act), there is nothing to be adjusted against the surcharge levied and collected from them for the fasli year 1957-58, and that they are therefore entitled to a refund of the entire surcharge paid for the fasli year in question. The contention on behalf of the State, who is the appellant in the second appeals, is that the provision for adjustment under S. 33 is only in respect of persons who are liable to agricultural income tax assessment on the repeal of Madras Act XIX of 1954, where adjustment is possible and does not apply to persons who are exempt from agricultural income tax. The problem raised has to be decided on an interpretation of S. 33 read with the provision regarding repeal of Madras Act XIX of 1954 under S. 31. I have already pointed out that Act XIX of 1954 in substance provided for a realisation of additional land revenue in respect of land holders paying more than Rs. 500 for fasli as land revenue. Prior to the amendment of the Agricultural Income tax Act persons who are liable to pay agricultural income tax were only planters so defined. Non-planters were not liable for agricultural income tax but they were made liable to pay surcharge on a slab system. The amending Act of 1958 began to levy agricultural Income tax on non-planters as well. The basis of assessment under the Agricultural Income tax Act differs radically from the assessment under the Land Revenue (Surcharge) Act. Whereas the land revenue surcharge is paid on the revenue payable for the fasli in question in respect of the current agricultural income, the income which is taken into consideration for the agricultural income tax is specifically the income of the previous year. The agricultural income tax for 1958-59 is based on the income for the year 1957-58. Admittedly during the fasli year 1957-58, the plaintiffs were not liable to be assessed to this income tax except for the last quarter. For the fasli year 1367, that is from 1st July, 1957 to 30th June, 1958, they were liable to surcharge under the Land Revenue (Surcharge) Act and had paid the amount. Act XXIX of 1958 received the assent of the Governor only on 23rd October, 1958, though it came into force with retrospective effect from 1st April, 1958. That is the new Act came into force in the last quarter of fasli 1367. As the Act came into force on 1st April, 1958 and as the Act repealed Act XIX of 1954, the repeal takes effect from that date. A person who was previously liable to land revenue surcharge under Act XIX of 1954 would not be liable for any surcharge from 1st April, 1958. The plaintiff''s in this case, if they have not been exempt under S. 4-b of the new Act would have become liable to tax under the new Act from 1st April, 1958 and the tax liability would be based upon the income in the previous fasli year. But for this period they have already paid land revenue surcharge. If they had been taxed under the new Act clearly S. 33 would apply and the surcharge collected would be adjusted against the income tax payable and the balance, if any, refunded. The State in this case has refunded to the plaintiffs the surcharge collected for a quarter, as there is overlapping of liability for a quarter.
It is the common case of the parties that a person who is liable to surcharge under Act XIX of 1954 need not necessarily be considered as a person liable to assessment under the Agricultural Income tax Act, leave alone cases of exemption. The liability for agricultural income tax of a landholder arises only if he is in possession of more than 121/2 standard acres and derived an income of Rs. 3500, whereas the liability under the Land Revenue (surcharge) Act arose under a different basis depending upon the kist payable for the lands. Whereas the agricultural income tax was based on the income of the previous year, the surcharge was not so based. While on this it is contended for the assessee that provision for the refund is absolute, be it by way of adjustment when possible, it is submitted for the State that the provision for refund is obvious, the object of the Legislature being to avoid double taxation. Surcharge would have been collected for the fasli year under the old Act. On the basis of the income during that period, but for the refund, income tax also would be collected. This it is said is a hardship and so avoided. For the State S. 33 is read so as to limit the refund to persons who are liable to pay agricultural income tax under the Act for the period in question.
We are here concerned with a provision providing for refund of a tax already realised or collected. If Ss. 31 and 33 of Act XXIX of 1958 are read together, it is seen that S. 33 engrafts an exception on the provision in S. 31. The relevant part of S. 33 states that if the Government had already collected from an assessee surcharge for the fasli year 1st July, 1957 to 30th June, 1958, it shall be adjusted towards the agricultural income tax due from the person for the financial year 1958-59; that is, for the year 1st April, 1958 to 31st March, 1959. If on such adjustment the surcharge is in excess, the excess has to be refunded. If no such adjustment is made then also the surcharge has to be refunded.
The proviso to S. 31 is that though the Surcharge Act stood repealed the repeal shall not affect the previous operation of the said Act or anything already done or suffered or any right, title, or obligation or liability already acquired, accrued or incurred. Here the plaintiffs had under the old Act suffered liability for the surcharge. The obligation for the payment of surcharge had been incurred and the liability for the same has accrued. If S. 33 is not there, there is no question of refund of any part of the surcharge collected, even though in substance and effect the State would be collecting tax on the basis of the income of the year for which the land revenue surcharge had been paid. Except for what has been provided for by S. 33 repeal of Act XIX of 1954, does not affect the liability incurred under that Act for the surcharge till its repeal. We are interpreting here not a taxing provision but a provision for adjustment or refund of tax already realised, and what is called for is a literal interpretation of the provision giving the language, the interpretation that is warranted in the context. We have to look fairly at the language used and draw no presumption in favour of or against the assesses. There is certainly one presumption with reference to taxing statutes, a construction which would have the effect of making a person liable to pay the tax twice in respect of the same subject matter would not be adopted unless the words were very clear and precise to that effect. What the Legislature has intended, has to be collected from the express provisions of the Act. Now Act XXIX of 1958 repeals Act XIX of 1954 only with effect from 1st April, 1958. Act XXIX of 1958 itself does not impose by reason of the exemption, any tax on the plaintiffs. Is there any provision in Act XXIX of 1958 by which it can be said that the liability incurred has been wiped off? As S. 31 preserves liabilities incurred we have to look for it only in S. 33. S. 33 provides for adjustment towards the "agricultural income tax due" for the financial year 1958-59. The plaintiffs here are not liable at all for agricultural there income tax, and therefore is no question of adjusting the surcharge against any agricultural income tax payable by them. They are not persons from whom the tax is due for the financial year 1958-59. There is no question of their being refunded any excess after any such adjustment. The provision for refund of the entire surcharge comes in when no such adjustment be made. The use of the word be" has a semantic significance, it imports an existing obligation to act in a particular manner. Why has the Legislature not used the simpler word ''is''? We must take it that the legislature has deliberately used a word which has a significant meaning in the context. The word "such" takes us back to the adjustment provided for before, that is adjustment towards tax due by the person. All that it means is, that if for any reason no adjustment is made for tax due the whole of the surcharge shall be refunded to the concerned person. The person concerned is a person liable for agricultural income tax. A person who is not liable for agricultural income tax on a fair reading of the section does not get the benefit of the refund. That is in consonance with the view that the Act provides against imposition of tax twice with reference substantially to the same matter. May be in view of the repeal, religious and charitable institutions get completely absolved from liability for the land revenue surcharge. Tax had been levied on them ever since the Act came into force on 1954. S. 33 as I read it only states that a person who is liable under the Act (Act XXIX of 1958) shall not be made liable for land revenue surcharge, during the relevant period. The Government has chosen to refund to the plaintiffs tax for a period of three months. It is unnecessary for us to examine the validity on basis of the refund granted; that question does not arise for consideration. The only question is whether the plaintiffs can claim refund of the surcharge paid by them from 1st July 1957 to 31st March 1958. S. 33 does not say that refund shall be made, even in cases where a person is exempt from agricultural income tax. It only contemplates adjustment in respect of persons who would be liable for the tax. True S. 33 does not say that persons exempt from Act XXIX of 1958 are not entitled to the refund. But as I read the section, expressly the refund is given only for persons from whom agricultural income tax is due. As I said at the outset being an exception, are should not read into it more than what is fairly found therein, Exceptions cannot be read by implications. It follows that the plaintiffs are not entitled to any refund as claimed, and the decision of the trial court is correct. The second appeals are allowed accordingly. The appellant will be entitled to half costs in this court. No costs in the courts below. Leave granted.