CASE NO.: Appeal (civil) 411 of 1982 PETITIONER: JUSTICE DEOKI NANDAN AGARWALA RESPONDENT: UNION OF INDIA & ANR. DATE OF JUDGMENT: 04/05/1999 BENCH: S.P.BHARUCHA & B.N.KIRPAL & S.RAJENDRA BABU & S.S.M.QUADRI & M.B.SHAH JUDGMENT:
JUDGMENT
DELIVERED BY:
S.P.BHARUCHA, J.
BHARUCHA, J. :
The 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.
The 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:
1. 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.
2. 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.
3. 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.
4. 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 Act, 1961.
It 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withdrawn earlier today.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.
Learned 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.
The 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.
There 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.
It is 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 salary;
accordingly, 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.
They 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.
The appeal is dismissed.