Agricultural income-tax liability continued for the transition period, which had to be separately assessed and was not tax-free.

The amended definition of previous year did not create a non-taxable blank period for 1 July 1990 to 31 March 1991. Liability under the charging provision continued to depend on the relevant financial year, so the amendment affected only assessment mechanics and did not extinguish tax liability for that earlier period. The period could not be clubbed with the next assessment year and had to be assessed separately. The contention that no agricultural income-tax could be levied for that interval was rejected.

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Issues: Whether the period from 1 July 1990 to 31 March 1991 could be treated as a non-taxable transition or blank period under the amended definition of previous year, and whether it was liable to agricultural income-tax by a separate assessment.

Analysis: The charging provision made liability depend on the financial year and not on the assessee's chosen previous year. The amendment to the definition of previous year did not extinguish tax liability for the earlier nine-month period; it only affected the assessment mechanics. The period could not be treated as a blank or transition period. At the same time, it could not be clubbed with the next assessment year and required a separate assessment.

Conclusion: The period from 1 July 1990 to 31 March 1991 remained taxable and was rightly directed to be separately assessed; the assessee's contention that no tax could be levied for that period was rejected.

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