Private agricultural income of an erstwhile ruler was held taxable; merger covenants did not create a tax exemption.

A former Ruler's private agricultural income was held not immune from agricultural income-tax. The Act imposed tax on the income of every person, with exemption limited to the Government and local authorities; the reference to Rulers in the definition of "person" did not create immunity, and its later deletion did not change the substantive charge. The merger agreement and constitutional guarantees protected personal rights and dignities of rulership, but did not extend to private property or create an enforceable tax exemption. The challenge was treated as an attempt to enforce the merger covenants and was rejected as not justiciable. Liability to tax was upheld.

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Issues: Whether the former Ruler's private agricultural income was immune from agricultural income-tax by reason of the merger agreement and constitutional guarantees, and whether he could deny liability on the footing that he was not a taxable "person" under the Act.

Analysis: The liability to agricultural income-tax was created by the Act upon the income of every person, with exemption granted only to the Government and local authorities. The reference to Rulers in the definition of "person" did not confer immunity, and the deletion of that reference after the political integration of the States did not alter the substantive charge. The guarantees in the merger agreement and the constitutional provisions concerning covenants protected personal rights, privileges and dignities as a ruler, but did not extend to private property or create an enforceable exemption from taxation. The challenge was in substance an attempt to enforce the merger agreement, and such a claim was not justiciable in view of the constitutional scheme.

Conclusion: The claim of immunity from agricultural income-tax was rejected, and the former Ruler was held liable to tax.

Ratio Decidendi: Personal guarantees to an erstwhile ruler do not, without express statutory exemption, confer immunity from taxation on private property or agricultural income, and such covenants cannot be enforced to defeat a valid tax levy.

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