Tax rebate classification upheld as valid: exclusion of office appliances and road transport vehicles did not violate Article 14.

The second proviso to section 10(2)(vib) of the Income-tax Act, 1922, which denied development rebate for office appliances and road transport vehicles, was upheld as a valid classification under Article 14. The Court held that the Legislature has wide competence to select the subject of taxation and to differentiate among types of machinery for rebate purposes. Treating road transport vehicles differently from other machinery was not hostile discrimination but a permissible legislative classification. The constitutional challenge under Article 14 failed, and the Article 32 petition was dismissed.

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Issues: Whether the second proviso to section 10(2)(vib) of the Income-tax Act, 1922, denying development rebate in respect of office appliances and road transport vehicles, was unconstitutional as violative of Article 14 of the Constitution of India.

Analysis: The classification made by the proviso excluded only specified categories of machinery from the development rebate. The Court held that the Legislature is competent to choose the subject of taxation and to classify machinery for the purpose of granting rebate. The differentiation between road transport vehicles and other machinery was treated as a permissible legislative classification and not as hostile discrimination.

Conclusion: The proviso was held to be valid and not violative of Article 14. The challenge under Article 32 failed.

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