Full Judgment
K.A. Swami, J.
1. In all these petitions, the validity of the surcharge levied on the amount of agricultural income-tax pursuant to the amendment effected to the Schedule to the Karnataka Agricultural Income-tax Act, 1957, by the Karnataka Ordinance No. 13 of 1980 is involved.
2. The contention of the petitioners is that, by the time the assessment order came to be made, the Ordinance lapsed as it was not replaced by an enactment; therefore, on the date the order of assessment was passed, the authority was not competent or at any rate there was no authority in law enabling the assessing authority to levy surcharge on the amount of agricultural income-tax. This contention was considered by me in W. P. No. 9197 of 1986 (A. Malle Gowda v. Agrl. ITO : [1987]168ITR381(KAR) ) decided on September 5, 1986. The relevant portion of that judgment is as follows (at p. 382) :
'The contention of the petitioner is that on the date the assessment order was passed, the Ordinance No. 13 of 1980 which inserted the aforesaid provision in Part I of the Schedule was not in force and, therefore, the assessing authority was not justified in imposing the surcharge 'at the rate of ten per cent. of such agricultural income-tax'. No doubt, the Ordinance No. 13 of 1980 has not been replaced by an enactment passed by the Legislature. Therefore, it had ceased to operate at the expiration of six weeks from the reassembly of the Legislature. During the period it was in force, it was required to be given full effect to, and everyone concerned was required to make assessment in accordance with that.
Though the duration of the Ordinance is limited to the period laid down in clause 2(a) of article 213 of the Constitution, its effect will endure even after the expiry of the Ordinance. In other words, to matters governed by or affected by the Ordinance, even if they are considered after the lapse of the Ordinance, the Ordinance will have to be applied.
Therefore, when the authority made the assessment for the assessment year 1980-81, it was required to take into consideration the Ordinance. The mere fact that the assessment order was passed subsequent to the lapse of the Ordinance did not enable the assessee to avoid the liability of surcharge imposed by the Ordinance for the period of assessment in question. That being so, the respondent was justified in imposing the surcharge.'
3. However, it is brought to my notice that the Commissioner of Agricultural Income-tax has issued a Circular No. 2/1985-86 bearing No. AIT. CR. 19/1983-84 dated September 13, 1985, under section 17(5) of the Karnataka Agricultural Income-tax Act, directing that in pending assessments, no surcharge should be levied. The relevant portion of the Circular is as follows :
'Therefore, surcharge levied by completing the assessments during the period the said Ordinance remained in force, is a valid levy. Hence, in case where surcharge has been levied and collected before the expiry of the Ordinance, it need be refunded, and in cases where it has been levied but not collected so far, it has to be recovered now. However, it cannot be levied in pending assessments now.'
4. The aforesaid circular is not in conformity with the view expressed by this court in Malle Gowda's case : [1987]168ITR381(KAR) . Further, the view of the Commissioner that as the Ordinance has lapsed by the time the assessment is made and, therefore, in respect of the pending assessments, no surcharge should be levied, is unsupportable in law. Therefore, to the extent the circular in question directs that no surcharge should be levied in pending assessments relating to the period during which the Ordinance was in force, is not valid and as such it cannot be held to have the force of law. Even though the Ordinance ceases to operate at the expiration of six weeks from the reassembly of the Legislature if it is not laid before the legislature as per clause (a) sub-article (2) of article 213 of the Constitution, or before that period a resolution disapproving it is passed by the Legislature, nevertheless such lapse does not affect the initial validity of the Ordinance. Therefore, as long as the assessments relate to the period during which the Ordinance was in force, the surcharge becomes leviable on the amount of agricultural income-tax irrespective of the fact whether the assessment is completed during the period when the Ordinance was in force or subsequent to its lapse. Therefore, it is not possible to hold that having regard to the aforesaid circular dated September 13, 1985, the surcharge levied is without the authority of law. Accordingly, this contention fails and the same is rejected.
5. For the foregoing reasons, I do not see any justification to issue rule in these petitions. Accordingly, these petitions are rejected.
6. Shri H. L. Dattu, learned High Court Government Pleader, is permitted to file his memo of appearance for the respondents in six weeks.