– .. 3. S.C.R. SUPREME· COURT REPORTS of an enlarged meaning the same concept might ~ttract with · the march of time and with the revolutionary·. changes brought ft bout in social,
economic, political and scientific ·~ml other fields of human activity. Indeed, unless a contrary intention appears, an interpretation should be given to the words used to take in new fact~ and
situations, if the words are capable of comprehend- ing them. We cannot, therefore, agree with the learned Judges of the High Court that the maxim contemporanea expositio could be invoked in constrn-
fag the word "telegraph line" in the Act. For the' said reasons, we hold that the expres. sion "telegraph line" is sufficiently comprehensive t.o take in the wires used for the purpose of the
apparatus of the Post and Telegraph Wireless Station. In the result, we set aside the order of the High Court and dismiss the petition filed by the first respondent. The appeal is allowed, bnt, in tht•
eircumstances of the case, without costs. Appeal allowed. THE DOOARS TEA CO., LTD. 'V. COMMISSIONER OF AGRICUL'TURAL INCOME-TAX, WEST BENGAL (P. B. GAJENDRAGADKAR, K. SunnA RAo and M. HIDAYATULLAH, JJ.)
Agricultural Income-Agricultural produce used for asses~ee's "'!'n business and not sold in the market-If by itself constitutes income-Market value-Mode of computation-Bengal Agricultural Income-tax Act, 1944 (IV of 1944), s. 2(1)(b)(I), Rule 4(2).
The appellant which carried on business of growing m;tnufacturing and selling tea held a large tract of land o~ which qam!>oos, thatching grass and fuel ti!I!ber were grow!l '1961
'l'he Sen{or El,ctric Inspector v. Lax mi Narayan Chopra· Subba Rao J. Augml 18. Tlil DHa-TlJ Tt-. C'o.1 LtJ. v. Comm111ioritr of Agrict1l:Ural Inum1~tax, Wt# Bt1'gal Gajtn.Jragadkar J.
lGS [l962] by it by agricultural operations through its servants … and labourers and the same were utilised for the purpooea of ita tt:a business and wrre not sold in the market or otherwise. In the relevant assessment year the _1\gricultural Income-tax Officer increased the appellant's return by a ccnain sum of money as representing the market \•aJuc of it~ agricultura] income from bamboos, thatching grass and fuel timber. The appellant
contended inltr alia that the agricultural produce in question did not ronstitute agrirultt:ral income under the llengal Agriculrural Income-tax Act becausr. the same had not been sold or converted into money.
Hrld, that under cl.(!) of s.2(1)(b) of the Bengal Agricultural Income-tax Act the agricultural produce utilised by the asscssec for its O\\'fl business itself constituted income; no sale v .. ·us contempiate<l thereunder anti it \\'as not required that the agricultural produce should be sold and profit or gain recei\'ed frotn such sale.
Alexander 'l'en11ant '" Rol1ert Suir/air Smith, (1892) A.C. 150, In re MiCklethwait, 11 Ex. 456 and Sir Kikabhai Premclmnd '" Commi.Mioner nf lnMme-lax (Ceniral) Bombay, (1954) S.C.R. 219, referred to.
('011uni8.tlone,· of /11con1e·ta:r v. Sltau· lrallace & Co., ( 1932) L.R. 59 I .A. 206, Captain Maharaj Kumar Gopal .'?aran Flinglt v. Conzmiasio1zer of Inconie-ta.r~ JJiltar and (Jrisaa, ( 1935) L. R. G2 I.A. 207, not applicable.
Rule 4(2) framed under the Act deals with cases where agricultural produce has been sold outside the market as well as cases \vhere it has not heen sold at all an<l the income front ~uch agriculruraJ produce may hr computed in the mannrr
prescril~ed tl1rreunder. Crnr. APPELLATE .Tum~nI<'TTO:> : Civil Appeal Xo. :l8! of l!luO. y Appc·al from the judgmont and ordor d'ted ScptcmbC'r 11, l!l5i, of the Calcutta High Court
in RcfcrC'nce No. I 02/l!l;i2. S. Jlfitm, S. iV. 11luklierjee and B. N. Gho8h, for Appellant. R. B. J'al, Asoke Sen and P. K. Bose, for rc•Rponrlent. 1001. August 18. The Judgment of the Court
was delivered by GAJENDRAGADKAR, J.–This appeal by a.oertifi- cnte arises out of a reference made to the IDgh COurt .• , 3 S.C.R. StT.PREME COtJR1' REPORTS • 159 at Calcutta under s.
63( l) of th A Bengal Agricultural Income-tax Act IV of I ll44 (hereafter 0alled the Act). The appellant, the Dooars Tett Co., Ltd., is a public limited company and it carries -0n business of growing, manufacturing and selling
tea. For the accounting year 1948 which corres· ponds to the aesessment year 1949-50 a return was submitted by the appellant in ·respect of its agri· cultural income showing the said income at
Rs. 3,45, 702. The Agricultural Income-tax Officer, however, did not accept the correctness of the said return and increased the amount to Rs. 4,41,940. This increased amount included a sum of Rs. 39,849
and it represented the market value 'of the _appellant's agricultural income from . bamboos, thatching grass and fuel timber. It is this amount thus .added by the Agricultural Income-tax Officer
to the agricultural income of the appellant in the relevant year that has given rise to the present reference. The facts leading to the reference are not in dispute. The appellant holds a large tract of land
under lease from the local Government and it is common-ground that in a part of the said land it grows bamboos, thatching grass and fuel timber. During the relevant year it cut down some bamboos,
some thatching grass and fuel timber and used the same for the purpose of its business. The bamboos, the thatchiµg grass and fuel timber were grown by the appellant on its land by agricultural operations
which were carried on by the servants and labourers employed by the appellant. After they were grown they were utilised by the appellant for the purpose of its tea business and were not sold either in the
market or otherwise. It has been found that the appellant has been utilising the bamboos, thatching grass and fuel timber grown by it on its land in this way every year . ..Before the tax authorities the .appellant -urged
th.at the agricultural produce in question, ·did not iti;J Tfte·Docar~ Tea Co., Ltd. v. Cqmmiaai.Oner uj AgrieuUuritZ lnconte•t"ax, iv est Betiial 'l'lu Jjooor.~ Tea Co., LtJ. v. Com1fti1Jsiont'T ('j
Agricultural 1 ncomt-tax, lVut Btn{J<.zl Gajmdragadkrzr J. J (j() • SUPRE~IE COURT REPORTS (1962j constitute agr;cultural income within the meaning of the _.\ct because the same had not been sold.
The appellant's case was that agricultural produce grown by it on its own land could not in law be treated as its income unless it was converted into its money cquival~nt or into something which ,ms
money's worth ; m other words, unless the said produce was sold. The department, on the other hand, has taken the view that the several varieties of agricultural produce grown by the appellant on
itR land and utilisPd by it for its business were themselves agricnltural income and the tax on the said income cannot be <woidcd on the pica that the 8aid varieties had not been sold. This dispute went
up to the Tribunal ; but the Tribunal agreed with the conelusiou of the t<ix authorities and held that the produce in question constituted agricultural incomt• of the appellant for the relevant year, and
so the addition of Rs. 39,849 made by the Agricul- tural Income-tax Officer in determining the total agricultural income of the appellant for the relevant year was affirmed. It 'HI.I! also urged by the appellant in the
assessment proceedings that even if the produce in question constituted t.hc appellant's agriculturiil income its market value could nut be comput-0d in monPy because no rule had been framed for the
computation of the market ,·alue of such income. The appellant urged that r. •.l of the Rules framed under the Act was inapplicable to the present case. This contention has also been rejected by
the tax authoriticB as well as by the Trilmnal. In tho rC'sult the agl"icultural income found to have becu earned by the appellant for the relevant year haii been duly taxed. Feeling aggrieYed by the final order passed
by the Tribunal in this matter the appellant required the Tribunal to refer two questions for the opinion of the High Court, and in due- course the Tribunal made the reference as required. The two
.. I t 3 S.C.R. questions referred for the opinion of the High Court have been thus framed by the Tribunal : ( 1) Is bamboo, thatch, fuel, etc., grown by assessee company and utilised for its own
benefits in its tea business, agricultural income within the meaning of the Bengal Agricultural Income-tax Act? ; and (2) If the answer to question (1) be in the affirmative, can such income be computed
under rule 4 of the rules framed under the Act? The High Court has amwercd both these questions in the affirmative against the appellant. The appellant then applied for and obtained a certificate
from the High Court under s.64(2) of the Act read with Art. 135 of the Constitution. The High Court has certified that the case is a fit case for appe:tl to this Court because it was conceded by both the
parties before the High Court that this case had been chosen by the assessec and the department as a test case since all the tea companies are intcresterl in the questions raised in the present reference. It
is with this certificate that the appellant has come to this Court with its present appeal. The answer to the first question would depend upon the construction of the definition of agricul-
tural income contained in s. 2(l)(b) of the Act. The charging section is s.3. It provides that subject to its two provisos agricultural income-tax shall be charged for each financial year in accordance with
and subject to the provisions of the Act at t11e rate or rates specified in the Schedule in respect of the total agricultural income of the previous year of every individual, Hindu undivided family,
company, firm or other association of individuals and every Ruler of a Part B State. Section 7 pr(J)vides for the computation of tax and allowances under the head "agricultural income from agricul-
ture". Do the relevant and material words usea The Dooars Tea Co., Ltd. v. Commissio,.er cj Agrt·cuZtttrat In<!om~·tax, West Btrigal Gafendragcdhr J, 1"he Dooor11 Tt4 Co., l.td. v.
C01nmia1iontr of .-fgri,ulturul lntO'Ml-Ta.r, lfe1t Retigal f_,'ujniiragadl.:ar J. SbPREME COtJRT REi>oR'i'S in thli definition of agricultural income by s. 2 reach the subject of tax ition in the present case?
That is the short question which falls for our decision. Section 2(l)(a) deafa with the agricultural income consisting of rent or rcvenno derived from Jami which is used for agricultural purposes and is
either assosscd to land rovenue in a State or subject to local rate assesse<I or collected by officers of the Government as such. We are not concerned with this part of the definition. Section 2(1 )(b)
reads thus: "any income derived from such land by~ (i) agriculture, or (ii) the performance by a culti,•ator or receiver of rent-in-kind of any process ordinarily employerl by a cultivator or
receiver of rent-in-kind to render the produce raised or received hv him fit to be taken to market, or (iii) the sale by a cultivator or rccl\iver of rent-in-kind of the produce raised or received
hy him, in respect of which no process has hecn performed other than :1 process of the · nature described in item (ii)." The r"spondont, th<' C:ommissiorwr of Agricn ltural Income-tax, West Beugal,
eont<'uds that the agricultural producc in tlw preHcnt. case falls directly under s. 2(1 )(b)(i). It is income derived from agricultural laud by agric:ulturc. It is not disputed l.>y the appellant that in
the context income ma v mean either cash or iuc:oml' in kind. It is also· conceded l.>y the appellant that the dictionary meaning of the word "income" includes "produce of a farm"', and so if we were to construe
the relevant clause in the light of the dictionary me~ning of the word "income" it would take in agricultural produce with whirh we arc concerned 16ll in the present case. It is, however, urged that
the word "income" necessarily denotes, and ;has reference to, profit or gain, and profit or gain cannot be made unless the produce is sold and realises its value. No person can trade with
himself and so if the agricultural produce is used by the appellant for its own purposes there is no element of sale involved in the transaction and there can be no profit or gain which would justify
the imposition of tax on the said produce. In support of this arg11men t it has been urged before us that the definition of agricultural income prescribed by s. 2 of the Act is common
to all the State enactments in respect of agricultural income and is the same as the defini- tion of agricultural income prescribed by s. 2(1) of the Income-tax Act. The same definition has
been adopted by the Constitution under Art. 366( 1 ). That being so, it is contended that in interpreting the word "income" it would be relevant to rely on the decisions under the Income-tax Act. In
Alexander Tennant v. Robert Sinclair Smith (1) Lord Halsbury has cited with approval Lord Wensleydale's observation in In re Micklethu:ait (') that "it is a well-established rule, that the subject
is not to be taxed without clear words for that purpose ; and also that every Act of Parliament must be read according to the natural construction of its words". In that case it was held that the
benefit which the appellant assessee derived from having rent-free house provided for him by the Bank brought in nothing which can be reckoned up as receipt or properly be described as income.
Mr. Mitra, for the appellant, contends that income obviously and necessarily denotes the coming in of profit or gain, and what is true about thehousc which the assessee Alexander Tennant was allowed to use
is equally true about the agricultural land owned by the appellant. The appellant has received (1) [1892] A.C. 150, 154. ( 2) II Ex. 456. The DotJars Tm Co., Ltd. v. Comm#aiont.r of
Agricultural Income-tax, West Be'ngal Ga;"endragadksr J. lB6J .,…..– The Pooor. Tea Co., Ltd. y. Oomntisliontr of .-4gri~ltural lft'Ot»e ~lax, IVtat Btnglll Cajtndragadk(l1" J.
SUPRE:ME COURT REPORTS [1962) no profit or gain from the agricultural produce derived from its land, and so the said produoe cannot be saicl to constitut<' its income under s. 2(I)(b)(i).
The Mme argument is put in another form on the authority of the decision of this Court in Sir !{ ikabhai · l'remclum4 '" Commi8.~ioner of lncmne-ff1x (Oentml), Bombay('). In that case
Bose .J., wllo spoke for the majority of the Court, sta({)cl that it was well recognised that in revenue cases regard must ho had to tfo, substanc<' of the transaction ratht11· than its mere form, and ho
proceeded to observc that in tho ease before the Court, clisregarcling tochnicalit.ics, it wa.s impossible to get away from the fact tliat the business was owned and run bv the assessec himself; and if
he was to be held 0 liablc for th<' tax "you reach the poHition that a man is supposed to· be soiling to himself ancl thereby making a profit out of himself which on the face of it is not onlv absurd
but against nil canons of mercantile and 0 income- tnx law.,_ Mr. ;\fitra suggests tliat in taxing the agricultural produce utilised by th<' appellant for its own purpose the respondent is really taxing
the appe llnnt on the basis that it has traded with itself and mad1• profita on the agricultural pro- clucr· in q11estion. Thi~ argument is hased on the assumption that income a,.q definecl bys. 2(l)(h)(i) must always
be in the nature of profit or gain, and that incvitabl.\• postulat<os a Hale transaction mado at n, profit 01· gain. ;\Tr. Mitra seeks to derive a.ssi,tanc(' for this argument from the provisions
of ss. •1 and 6 of the Income-tax Act where income, profits and gains arc grouped together. What is true about the denotation of the word "income" und"r the Income-tax Act, savs !\fr. Mitra, must
be equally true about the denotation of the word "income" under s. 2( I )(b J(i) of the Act. ( 11 [1954~ s.c.R. 219. ·3 s:c.R. In dealing with this argument it is necessary to· bear in mind that the word "income" even
as it is used in the Income-tax Act has oftm been characterised by judicial decisions as formidably wide and vague in its scope. It is a word of elastic import and its extent and sweep
are not controlled or limited by tho use of the words "profits and gains" in ss. 4 and 6. As has been observed by Sir George Lowndes in Com- missioner of Income-tax v. Shaw Wallace & Co., (1 )
the object of Indian Income-tax is to tax income a term which it does not define. It is expanded, no doubt, into incomt>, profits and gains, but the expansion is more a mattl'r of words than of
substance. Similar is the observation of Lord Rus~ell in Captain Maharaj Kumar Gopal Saran Narain Singh v. Commissioner of Income-tax, Bihar and Orissa (2) where it has been observed
that "the word "income" is not limit-Od bv the words "profits" and "gains". Anything ~vhioh can be properly describ'.'d as income is taxable under the Act unless expressly exempted".
The diverse forms which income may 11ssume cannot exhaustively be enumerated, and so in each ease the decision of the question as to whether any particular receipt is income or not must
depend upon the nature of the receipt and the true scope and effect of the relevant taxing provision. The receipt may he a11 income for the purpose of taxation though it may not amount
to profit. The case of Gopal S(iran Narain Singh (2) itself is an illustration in point. fn that rase the assessee aged 47 had transferred an cstak worth two crores of rupees for a relatively small annuity
of Rs. 2,40,000 for life. The said annuity could not constitute or provide a profit or gain to the assessee but all the same it was taxable as income. Tbus the argument based on the emphasis on the use
of the words "profits and gains" in ss.4 and 6 of the Income-tq.x Act cannot really assist the appellant (I) (1932) L. R. 59 l·A· 206, 212. (2) (1935) L.R. 62 I.A. 207. Tlu-Dooara
Tea Co., Ltd. v. Commiarioner of AgrfruUural lncome·tax lt' est Bengal Gajendragadkar J. Thi Dooara Tea· Co~~ Ltd~~ v •. Commisa,i.onrr of Agricultural Income-tax, West I!_engal Gajendragadkar J.
[1962) in construing s. 2(l)(b)(i) of the Act with which we are concerned. 'Vhat the word "income" denotes . has to be determined in the context of the. said section itself .. Going back to s.2(l)(b) it refers to income
• derived fr.om land which means arising from land and denotes income the immediate and effective – source of which is land. Section 2( 1 )(b) consists of -three clauses. Let-us first construe els. (iil and (iii). Clause (ii) includes cases of income derived from
the performance of any process therein specified. The process must be one which is usw11ly employed by the cultivator or receiver of rent-in-kind ; it may be_ simple manual process or- it may involve the
use and assistance of machinery. That is the first requirement of this proviso. The second require- ment is that the said process must have been employed with the object of making the produce
marketable. It is, however, clear that the t;mploy- ment of the process contemplated by the second clause must not alter the character of the producr. The produce must retain its original character and
the ouly change that may have been brought about in the produce is to make it marketable. The said change in the condition -of the· produce -is only intended to make the produce a saleable commodity
in -the market. Thus cl. (ii) includes within the categories of income, income· derived from the employment of the process falling under that clause. As we have just observed the object of employing
the requisite process is to make the produce market- able but in terms the clause docs not refer to sale -and does not require that the income should 'be obtained from sale as such though in a sense -it
contemplates the sale of the produce. That takes us to cl. (iii). This clause in' terms · and expressly refers to the income derived from sale. It refers to the sale price realised either by the cultivator or the receiver. of
rent-in·kind by the sale of the produce in respect t of which the process as contemplated by cl. (ii) has been performed. It is significant that the sale to which cl. (iii) refers must be the
sale of produce which has not been subject to any process other than that contemplated by cl. (ii). Thus it may be stated that reading els. (ii) and (iii) together they contemplate the sale of the produce-
cl.(ii) indirectly inasmuch as it refers to the process employed for making the produce marketable and cl. (iii) directly inasmuch as it refers to the price realised by sale of produce which has been
subjected to the process contemplated by cl. (ii). Therefore, it is clear that income derived from sale of agricultural produce has been provided for by els. (ii) and (iii) and prima f acie that would show
that cl. (i) which does not refer to salfl even in- directly cannot be intended to cover cases of income derived from the sale of agricultural produce. Considered in the light of els. (ii) and (iii) of
s.2( 1 )(b) what is the true scope and effect of the income contemplated by cl. (i) ? In terms tho clause takes m income derived from agricultural land by agriculture ; and as we ha Ye already pointed
out giving the material words their plan grammati- cal meaning there is no doubt that agricultural produce constitutes income under this clause. Is there anything in the context which requires the
introduction of the concept of sale in interpreting this clause as suggested by the appellant ? In our opinion this question must be answered in the negative. Not only is there no indication in tho
context which would justify the importing of tho concept of sale in the relevant clause, but as we have just indicated the indication provided by els. (ii) and (iii) is all to the contrary. What thiR
elause seems clearly to have in view is agricultural produce itself which has been used by the assessec In the present case it is common-ground that thf, appellant has utilii!Od for its business the agricultu-
ral produce in question and we feel no difficulty in agreeing with the High Court when it held that The Dooors Tea'G(}., lAtl. v. Commi.1sWner of Agricultural Income-tax, West Bt.ngal
dajendragadka1 LI. Tht Do(}{tra 7'ea Co., l11t v. Co1n111i811ioiur of Aqf'ioullurrtl l110011u..fux. 11' ul Bniqal . <Jajtnt:Wagadkur J, Sl'PHE:\IE COl.R'l' HEPOR'T'S trn82J t.ho agricultural prricluce utilised by the appellant
for its lmsillC'8;; cu11stitut1·s inecimc 1111der "· 2(1 )(b)(i). If the agricultural producc usc<l by the appellant was not intended to be included within tho definition of income umler s. 2( l)(b) we apprehend that tho
whole clause would have been verv differently worded. Where income derived fr~m sale was internlcd to l)(' prescribed the Legislature has done so in terms hy cl. (iii) of s. 2( I)( b ).
Where the marketable condition of the produce r<'sulting from the •·mployment of the Rpecified processes and income <leriYed from the adoption of sueh procosse.s was intended to be included in the income t.he
Legislature has <lone so by cl. (ii) ; and so those two cnses having Leen specifically provided for by the two respecti,•e clauses there would bn no justi· fication for introducing the concept of sa.Jc in cons-
truing cl. (i) ofs. 2(1)(b). 'rhr words ins. 2(l)(b)(i) are, iu our opinio11, wide, plain and mu1m biguous and they ca11not lie construed to C'Xcludc agri- cultural produce used by the appellant for its busi-
ness. In this co11ncdio11 we mav inciclcntallv refer to th(' prm•isio11s of su L-cls. ( i ), {ii) a11<l (iii) of s. 7( I) of the Act which pro\·idc for the computation of tax am! :11lowa11ccs under the h<>ad "agricultural
incum<· from agriculture"'. These three sub-clauses in terms corrcspuncl to the three suL-clauscs of s. 2(1)(b) ancl lend some support to the conclusion that <'I. (i) i11 s.2(1 )(b) doc' 11ot require tlrntthc
agricultural prorluce should be solrl and profit or gain received from such sale before it is included in tho said clause. Therefore, we do not tl1ink that .\[r. Mitra is justified i11 contending that the answer
made by the High Court in referC'nee to question I is \Vrong. Tlw second question relates tu the compu- tation of agricultural income for the purposes of the Act. l~ulc 4 with the constructio11 of which
_,,.. the second quc8tion is concerned reads thus : 3 s.c.:R. 8UPREM&COURT·REPORTS i6!l "4. For the purposes . of the. Act the market value · of any agricultural produce shall, except in the case referred to in clause
(a) of the proviso to sub· section (I) of section 8, be determined in the following manner, namel;y :- ( 1) if the agricultural · produce was sold in the market, the market value. shall be deemed
to 'be the price for whicli such produce was sold ; (2) if the agricultural produce has not been sold in the market, the market value shall be deemed to be- ( a) where such. produce is otdinarily sold
· in the market in its raw state, or after the '• ·c:c·.performance of any piiocess ordinariiy em- ployed by a cµltivator or receiver of rent-in- kind to render it fit to be taken to market,
the value calculated according. to the average :price at which such produce has been so sold m the locality during the previous year in res'pec~ of which the assessment is made ; _ … -,
. (b) where such produce is not ordinarily sold in the market in the manner referred to in sub-clause (a), the aggregate of-.. (i) the expense~ of cultivation ; (ii) the land revenue 01· rent, paid for the
area in which it wasgrowh ; and . (iii) such amount as the Agricultural Income-tax Officer finds, having regard to all the circumstances in each case, to represent a reasonable rate of profit on the sale of
produce in guestion as agricultural produce." it is clear that r. 4(1) cannot apply to tho appel- I1u1t's cas.e for the agricultural produce ill question Jui;s not been sold in the market but has been used
.._… by ·the appellant for its o,vn bµsiµe13s. Tho ap~llant contends t!i;.t l'• '4(2) cannot 'also be in- ,yo~l)d" ·against it, and SG>e. the.i:o is no rule under The.-UOOQfa Tea Co,, Ltd.
v. "' G'ommi~•.i_ontr.of Agrtctlftilriit I tic-Otlf<;ftu . Jl'ii!fi~I Gajen(lra,dad,kar J. i70 SuPREME OOuRT REPORTS [1962j which the agricultural income in question can be T!.. Doo.,.•
computed, Incidentally the appellant suggested T"" 0;:· Ltd. that if its construction of r. 4(2) is right it in- aommiaaioner of directly supports its case as to the tnie scope and
.A..grieultural / —-. Income-tax,· effect of s. 2(l)(b)(i). The Legislature knew that We8'B"'ilfLI agricultural produce is not taxable unless it is sold, Gojmd,.gaakar-.J.–. and so· it -has not made any rule for the compu- tation of agricultural income alleged to have been
received by the assessee from agricultural produce used by the assessee for its own purpose. On the other hand, the respondent contends that r. 4(2) . covers the present case, and if that is so, according
to the respondent, that would "incidentally support his construction of s. 2(1 )(b )(i). _The argument urged by the appellaJlt assumes that the two rules are based on a .kiild of baeic
_dichotomy. Rule 1 deals with agricultural produce sold in the market, andr. 2 with the agricultural produce which -has been· sold but not in the market. In other words, according to the appellant, ·
both the rules assume that the agricultural produce has in fact been sold, r. (1) deals with cases where it has been sold in the market and r. (2) with cases where it has been sold but not in the market. If
this argument is right then of course cases where agricultural produce has not been sold would remain outside the purview of both the rules ; but is this · argument right ? We have no hesitation in hold·
ing that it is not. In our opinion, r. (2) deals with _ cases where agricultural produce has been sold outside the market as well as cases where agri- cultural produce has not been sold at all. The
effect of reading the two sub-rules together is that the cases of market sales arc covered by r. (1) and all – other . cases are covered by r. (2). Rule (2) is a residuary rule which applies to all cases not
-falling m1der r. (I). Therefo1·e, we must hold that the answer given by the High Comt to question 2 ·is also right. It is obvious that the rules framed in exercise of the power conferred by s. 57 of the
38.C.R. ~~, i. • Act cannot legitimately be pressed into service for the purpose of construing the relevant provisions of the Act ; even so, incidentally it may be permis~ sible to observe that the construction of r. 4(2)
which we are inclined to adopt is consistent with the respondent's case that s.2 (1 )(b)(i) includes agricultural produce utilised by the appellant for its own business. In the result the appeal fails and is dismissed
with costs. Appeal dismissed. SHRI AMBALAL M. SHAH AND ANOTHER v. HATRISINGH MANUFACTURING CO., LTD. (K. N. WANCHOO, K. c. DAS GUPTA, J.C. SHAH and RAGHUBAR DAYAL, JJ.) Industrial Untkrtaking-lnvestigation into its affairs by
Central Government-Takinq over of manoqement by officer appoin· ted by Government on the basis of report–Legality-lndust1·ies (Development and Regulation) Act. 1961 (66 of 1961), ss. 16, 18 A(I)(b).
Being of the opinion that 1lhere had been a• substantial fall in the volume of production in respect of cotton textiles manufactured in the respondent company, an industrial under- taking, for which having regard to the economic CQnditions prevailing there was no justification; the Central Government ,\ made an order under s.15 of the Industries (Development and Regulation)
Act, 195 l, appointing a committee of three persons for the purpose of making a full and complete investigation into the circumstances of the case. After the committee madeits report, the Central Government being of the opinion thereupon
that the company was being managed in a manner highly detrimental to public interest, made an order under s. 18 A of the Act authorising the first appellant to take over the management of the whole· of ~-~he·· said
undertaking. The respondents challenged the – legality of the order on the ground, inter alia, that on the proper construction of s,18 A the Central Government hac' the right to make the order under that section on the ground ThtiD-i
TeaC<u, Ltd. Crmihiia':i.~lrM ~'. Aur~ral' Jniiome .. tax, Wes!B<ngal Gajerzitloagadkar J. A"!11Jat 21.