HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
State of U.P. & Anr. v. Raza Buland Sugar Co. Ltd., Rampur
Civil Appeal No. 2281 of 1969
[1979] 3 SCR 419 ·
United Provinces Agricultural Income-tax Act, 1948: sections 2, 16(4) and 18 · Indian Partnership Act, 1932: section 4 (definition of firm) · Indian Income-tax Act, 1922: section 2(5A) and comparative firm-assessment authority
Sources & disclosures includedDownload original judgment / order
Three-judge bench; judgment delivered by P. S. Kailasam, J. · R. S. Sarkaria, J. · P. S. Kailasam, J. · O. Chinnappa Reddy, J.
Assessment years: 1357 to 1363 Fasli; the first remand concerned 1357 to 1361 Fasli, with 1362 and 1363 Fasli subsequently included
01 · Facts of the case
The Raza and Buland sugar companies formed an equal-share agricultural partnership using land leased by the former Rampur State. After the U.P. Agricultural Income-tax Act was extended to the area, each company filed returns of its half-share of the firm's income. An earlier remand concerned whether the land satisfied the statutory land-revenue or local-rate condition. During fresh proceedings, the companies newly objected that the firm had not received notice or been assessed. The High Court accepted that objection; the State appealed.
Source: SCR420F-423A / PDFpp.2-5
02 · Discussion by the Hon’ble Court
The Act's definition of person included individuals, firms and companies. Section 18 permitted a shift from assessment of a firm or company to its members in the stated circumstances; it did not prohibit direct assessment on returns already filed by the partners. Here no assessment had been made on the firm. Drawing support from Murlidhar Jhawar, the Court stressed that the same income should not be taxed again in firm and partner hands, subject to a special statutory provision allowing it. The registered/unregistered firm distinction under the central Act did not exist in this state Act.
Source: SCR423B-425D / PDFpp.5-7
03 · Judicial decision
The assessment of the two companies on their own returns was valid without first proceeding against the firm. The new firm-assessment objection could not be introduced after the earlier limited remand; for the two additional Fasli years, the companies had likewise returned their respective income. The Court also upheld the factual finding that the leases, read with the original agreements, required land revenue. It declined another remand given the long pendency and the unchallenged assessment finding on that issue.
Source: SCR425E-426H / PDFpp.7-8
04 · Outcome / in whose favour
The State's appeal was allowed. The High Court's judgment and order were set aside and the Assessing Authority's order was restored. This was substantive success for the Revenue, not a remand for reconsideration. The short operative order contains no separate costs direction.
Source: SCR426H-427A / PDFpp.8-9
05 · AKHB REVIEW POINT
AKHB analysis: identify the person assessed, the return filed, the income actually brought to tax and whether the firm has already been assessed. Read an allocation or assessment machinery provision in its statutory setting rather than assuming it is an exclusive charging route. Preserve objections at the proper procedural stage and establish the land-revenue condition from the governing agreements. Do not apply this historical approach to present partnership taxation without checking the current enactment and later treatment.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 9-page SCR report read. Reporter headnote spans PDFp.1 and the upper part of p.2; judicial text begins at SCR420F / PDFp.2 and ends at SCR427A / PDFp.9. No numbered judicial paragraphs; SCR page and column pinpoints are used.
- All 9 source pages were read; PDFpp.1,2,6,9 were visually checked. Source date, title, bench, docket and SHA-256 match the frozen source record.
Statutory scope
This ruling concerns the historical U.P. Agricultural Income-tax Act and its definitions and firm-assessment machinery. It is not a statement of the present central Income-tax treatment of firms and partners.
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 9 pages
SHA-256: 4b74166d5044f965efb3c0452e43c2c6bdd31ce4aa9bf201931f9e088122c9a4
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.