Controlled tax computation discretion under a taxing statute requires Board permission for variation and does not offend article 14.

The proviso to section 6(1) of the U.P. Agricultural Income-tax Act was construed as requiring permission of the Board of Revenue before an assessee could vary the chosen method of computation after exercising the option, and the restriction was not limited to a single assessment year. The Board's refusal of permission was upheld because the record showed that relevant practical and revenue considerations were considered, so there was no failure to apply mind. The proviso was also held not to offend article 14, since the Act provided adequate guidance and the discretion was controlled rather than unguided or discriminatory.

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Issues: (i) Whether the proviso to section 6(1) of the U.P. Agricultural Income-tax Act restricted variation in the method of computation only within the same assessment year or required permission of the Board of Revenue after an option had once been exercised; (ii) Whether the Board of Revenue failed to apply its mind while refusing permission to vary the method of computation; (iii) Whether the proviso conferred an unguided and discriminatory discretion so as to offend article 14 of the Constitution of India.

Issue (i): Whether the proviso to section 6(1) of the U.P. Agricultural Income-tax Act restricted variation in the method of computation only within the same assessment year or required permission of the Board of Revenue after an option had once been exercised.

Analysis: The substantive part of section 6(1) gave an assessee an option to adopt either of the two methods of computation, but the proviso stated that once the option was exercised, the method could not be varied except with the permission of the Board of Revenue. The language of the proviso was unqualified and did not justify reading in a limitation that the restriction operated only for one assessment year. The scheme of the Act, including the return and revision provisions, supported the view that no unilateral change could be made after the return had been filed.

Conclusion: The restriction was not confined to a single year and permission of the Board of Revenue was necessary for variation after the option had been exercised.

Issue (ii): Whether the Board of Revenue failed to apply its mind while refusing permission to vary the method of computation.

Analysis: The refusal was preceded by a note considering the practical difficulties and the tax consequences of allowing variation. The endorsement by the senior member indicated approval of the proposed order, and the materials showed that the relevant considerations had been taken into account.

Conclusion: The Board of Revenue did apply its mind, and the refusal was not invalid on that ground.

Issue (iii): Whether the proviso conferred an unguided and discriminatory discretion so as to offend article 14 of the Constitution of India.

Analysis: The Act itself supplied sufficient guidance by laying down two alternative methods of computation and the circumstances in which variation could be sought. A discretionary power is not necessarily discriminatory, and the Board was required to act reasonably and consider relevant factors, including administrative difficulties and the effect of variation on revenue collection.

Conclusion: The proviso did not violate article 14 and was not per se discriminatory.

Final Conclusion: The challenge to the refusal of permission and to the validity of the proviso failed, and the connected writ petitions also failed because no fundamental right infringement was made out.

Ratio Decidendi: Where a taxing statute gives an assessee an option between alternative methods of computation and provides that variation after exercise of the option requires permission of a high authority, the proviso must be given its plain meaning; such controlled administrative discretion is not unconstitutional merely because it may be exercised differently in individual cases.

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