HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Delhi Cloth & General Mills Co. Ltd. v. State of U.P. & Ors.
Civil Appeals Nos. 1249 (NT) of 1968 and 1946 (NT) of 1972
[1979] 2 SCR 109 ·
U.P. Agricultural Income-tax Act, 1948: sections 6(1), 6(2)(a)-(b), 15(1)-(4), 15(3-B), 16(4) and 21 · U.P. Agricultural Income-tax Rules, 1949: rule 5 and Form A.I.T.-2; historical rules 6 and 7 · Constitution of India: historical Article 133(1)(a) and (c) certificate provisions
Sources & disclosures includedDownload original judgment / order
Three-judge bench; judgment delivered by V. D. Tulzapurkar, J. · P. N. Bhagwati, J. · V. D. Tulzapurkar, J. · R. S. Pathak, J.
Assessment years: 1954-55; previous year 1953-54 ending 30 June 1954 (1361 Fasli)
01 · Facts of the case
For its Daurala farms and assessment year 1954-55, the company initially selected the produce method under section 6(2)(b), retaining that choice in a revised return. The authority nevertheless issued an individual section 15(3) notice with a rental-method provisional estimate. In November 1958 the company filed a further return choosing section 6(2)(a). The authorities refused the change. A Single Judge upheld it, but the Division Bench reversed. The question was whether a computation option could be changed during the same year's assessment proceedings.
Source: SCR111D-115D / PDFpp.3-7
02 · Discussion by the Hon’ble Court
The original restriction requiring Board permission to change an option had been deleted, as had the word 'first' in rule 5. The declaration requirement therefore accompanied any valid return contemplated by section 15, including a valid later return. Notice-based returns had to be timely or within an extension; revision required discovery of a wrong statement and filing before assessment was complete. Merely preferring a different option did not supply that statutory ground. Thus the return's legal validity, not the fact that an earlier option existed, was decisive.
Source: SCR117B-121H / PDFpp.9-13
03 · Judicial decision
The November 1958 return was a fresh response to the section 15(3) notice, not a section 15(4) revision. Its forwarding letter identified the notice, and the authority had rejected it for the option change rather than lateness. Producing evidence and inspecting records did not waive the right. The changed rental-method option was valid. Separately, section 16(4) best-judgment assessments required due regard to the provisional estimate notwithstanding any option; this permitted an appropriate basis or mixed bases, not an invariable rental-method mandate.
Source: SCR121D-125C / PDFpp.13-17
04 · Outcome / in whose favour
Both appeals were allowed. The Division Bench order of 27 September 1965 was set aside and the Single Judge's order of 13 October 1961 restored. As explained in the judgment, the rental-method assessment of 19 December 1962 consequently revived and the later contrary assessment became ineffective; the Court recorded that the earlier tax had been paid. The assessee received costs in Civil Appeal 1946 (NT)/1972; parties bore their own costs in Civil Appeal 1249 (NT)/1968.
05 · AKHB REVIEW POINT
AKHB analysis: separate the right to choose a computation method from the procedural right to file the return carrying that choice. Retain notices, extensions, forwarding letters and declarations, and document an actual wrong statement where revision is invoked. In a best-judgment case, test whether the mandatory provisional estimate received due regard without assuming it dictated the whole result. This is a historical state-tax ruling, not permission to switch current central tax regimes outside their statutory conditions.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 17-page SCR report read. Reporter headnote spans PDFpp.1-2 and the upper part of p.3; judicial text begins at SCR111D / PDFp.3 and ends at SCR125D / PDFp.17. No numbered judicial paragraphs; SCR page and column pinpoints are used.
- All 17 source pages were read; PDFpp.1,3,13,16,17 were visually checked. Date, docket pair, bench and exact source hash were verified.
- The printed SCR121G-H sentence says 'does get' after stating that selection of a wrong option is not a wrong statement. The preceding sentence, SCR116D-E and SCR121A-C/F-G require a genuinely valid revised return; the note states that qualification without altering the preserved original.
- The existing Delhi Cloth v. Workmen note of 3 September 1971 is a different bonus/direct-tax judgment, not a duplicate. No matching published or archived identity/hash was found.
Statutory scope
The ruling interprets the amended historical U.P. Agricultural Income-tax Act and rule 5, after removal of restrictions on the original option. It is not a rule for switching present central Income-tax regimes or filing a revised central return.
Later treatment
Source checked 2026-10-14. Historical agricultural Income-tax decision. No comprehensive subsequent-treatment, review, stay or present-law verification was performed.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
Identified source links
- reported judgment — PDF 17 pages
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AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from the identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the full judgment, governing statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding. No current-law clearance is claimed.