The Delhi High Court on Wednesday dismissed a public interest litigation (PIL) that challenged the blanket exemption of agricultural income from taxation in the national capital, terming the plea as “misconceived.” A bench comprising Chief Justice D K Upadhyaya and Justice Tejas Karia observed that the issue fell outside the court’s domain and that it could not direct the Delhi government or the legislature to enact a new taxation law.
Court’s Observation
“From a perusal of the prayer clause, it is apparent that the petitioner is seeking a mandamus to the legislature to enact a particular law. Such a direction is impermissible. The writ petition is highly misconceived and is dismissed,” the court remarked.
PIL’s Arguments
The PIL argued that the continued exemption of agricultural income from tax for Delhi residents resulted in fiscal inequality and amounted to arbitrary classification among taxpayers. It contended that while the exemption was originally intended to protect economically vulnerable farmers, it was being misused by affluent individuals who derive substantial agricultural income. The petitioner clarified that it was not seeking a blanket tax on agricultural income but rather a regulatory framework to prevent misuse by high-net-worth individuals. According to the plea, the current exemption lacks a rational nexus with the stated objective of protecting small farmers.
Context of Agricultural Income Tax
The plea pointed out that only Assam and West Bengal continue to levy agricultural income tax effectively, primarily on plantation crops such as tea. Most other states have either repealed such laws or reduced enforcement. In Delhi, no agricultural income tax law exists, and such income remains fully exempt. The petitioner sought directions to the Delhi government to consider legislative or policy measures to address the alleged misuse.
