The Commissioner Of Income Tax, Lucknow v. U.p. Forest Corporation

Pave >[4998]4 oa. fi. 4. 98 |2 Ard 1998:vege at. wa,aret sik =awh.er, ORsraey affa, 1961 — eT 10(20) [wafsa aT ws afd, 1897, me 3(31),12]wee aa frre afar, 1974, are 3(3) aie 17, arpan Prtaa, ders, 1950 Ol aoe — write mffternt - sre 8 BE - UW. aa Perr uaa ame 10(20) S water S firearte sien el e ara: Gad anita we & fee ewer al & — waa are 3(31) at Refer Sea|waar, 1950 - sya 226 [waa sree afar, 1961, at 11(1)(m), 12%, 2(15)ak on. a4 faa, afar, 1974 et 3(3)] - 10(20) - affraa — aa afta- uw ato.at ara apt stort a fore eft sit ones 8 ue & fe ewe aaa, we wTfre wealOa Mt 11(1) (@) & anit aeda at f |.| .waar, 1950 = aja 226[eafoa sraay siflhrar, 1961, UT 256 aie eT 11(41)] -Re afeer - mga are A Re after wea aaaari yen adl at rit ake ot aifafi, 1961 St ar 10(20) & anita we a HiT at| Paior ae oe Raker affertwaa ax fear mar | Path + onaer siged (ata) & aet anit oea at | wad ate awae& we Qik aay| GA aaa aged B area wl aoa ae fer| Pathe a afRuift - unter Steadsme a aama é ced wary eA wearmraiRa ae dra vet & fe Pro were Gs aff, 1857 a ar (31) & acl ¥ uswria mew &| were ds aftfar at an 3(31)+ AAR mo cafeore & fe ae ware Te wha Gell S fs WY mle S ora feet arenes a erie AaTRear ar wae ert afey|aferfate, fren aS, wr organ Prova ta oRew€ oywitoh AR wal J ent 3(31) 4 Pie ‘ora ment wrens ats, fier as a A sngaTaaa Gt ERI 3(31) S aarta aM ae wert a or W oa via avant wah a wee afta fersastt 4 8 wa S wa de ao arma 2| pemca yer fra SS Weel oF Pratt Wie: aAMT: Waa: UM ana: sa & Paral gr wel fear ore &f ay weer aq Fro afer aORI 4 @ orpaR Perm vo saa alk ane wae O fear erm| seme ok waar A wor UHRamt arafiéfra fey ard €| ga wor Paed fey wy wae 4 S ule wae Wey WOR & alyord aftart a afey siz wor aor arr Fgad de srereety waral or dda VS wat A Staferrd ora ura ot wa 4 aal & cher ail faera & aa F arqua a| at ya ani St 7gan Pom & veel & eo 4 aera afeaal ay rafal grr ama: Patfad arm art aferPrakrat a varea, Ren, vax dort, aor, GRaea anfe oe amie yfaend wer Gea| sha:fog Tea Aecaqel we é fo veal S wea ay Xe Ware oy) WER oT og TT OOcee PEaw wfet wal &| MMGs afaaa at apr 3(31) F at ae ‘aeafes Pf’ ve 4 wriwere at fff afta &| weeelf frm @ ame 4 afifias gd ae GX Bar a we senoe @ fay wal aacarat 2| a vere @ faaBY wre ara suet Pe 4H gfe oat F| wesftfrar & ania afta areoe oy WHY, Xo a WARet oe of afer vel sf oTaffweal a ae ve at vere & faa 8 ay afta oeaS alk ga VER oO a aidaTa Hag &| TRofeeH a write fsa ot aMRe gaat woe aw& fee wed far oe& fig weaelt we te ae & fay alg seavel F| aa galery fe cae ven at PTA GT aT 17—¥ we ofa ¢ fe Foe at Fife “eifa et’ se wera Es afefray wt at 31) ERIreared wart fae wet AT OT Had| sa: BAR WAH, Gert ~Mearea ari ge fey Pore vrStud vat on fe veal “wieita offer & sik aflfar wt at 10(20) & akin we @ fay saa@1 (0a 114,12)at atofa 1141) wea @ ae cRoraeaed @ fe wT peel se we at & ara one er| werell od weer art ara-ax @ foo ifterRat wae oy @ ak waar wet eeitfery aly afaciteraaWega wel at ag @| afdar at ae 11SG oudel oT a Wa Oe @ fay =a We artd ea afer| aA sen wt ara wt oF wareS fey AMT OT Weal s sik HM WT aax afifaa at art i26 & acy virtten ot after & su dda 4 aeal or arden ated 21wa 4, ga ae a ora-ae eral S WaA Voy UM SB AIR W ver Wares wT wese flarewe wer a faa ord weet Suet F Freed set Provearfey a | eat wa A yeeelfa waite wider ad AMT on Wed six =e @ fea F Fa wer ww afahay & aie fot wfaaBRA aR seaeu aie ula at ort afeg fe an gaat ara afafrar wt at 11(1) @ oniwr aar 2 tet ae afteita wed gy fe meeif eireita often vel & foraat are or aferamr 10(20) & anit oe S we ore Bt Frater mffent at seaell @ ga ad w fae oe SIPes aa & f weet ona afeFraa at are 11(1) () & adel S aris owed ael s| Sa we aTAza Puke met ee art 8 we are @ex fear ory ak yee ge oY S dag aga wea & faftsaa @ aris eh| (RT 13, 15)mo ot Toe. aTE SY, TEAS @, Var weet aa Pa THE COMMISSIONER OF INCOME TAX, LUCKNOW v. U.P. FOREST CORPORATION MARCH 2, 1998 [B.N. KIRPAL AND A.P. MISRA, JJ.] Income Tax Act, 1961 : Section 10(20)-U.P Forest Corporation-Claiming to be a 'local · C authority' and seeking exemption from tax-Held-UP Forest Corporation is not a local authority-Members of Corporation are not elected by inhabitants of area-It is not entrusted with duties entrusted usually to Municipal bodies-It does not have power to levy taxes, charge or fee-Question whether Corporation can be regarded as 1J charitable institution should be investigated and examined by a proper forum under the Act-U.P D Forest Corporation Act, 1974-s. 3(3). General Clauses Act, 1897: Section 3(31)-'Local Authority '-Held-Merely because the UP Forest Corporation Act states that the Fund of the U.P Forest Corporation shall be a 'local fund' does not make it so under Section 3(31) of the Act, which is E a Central Act-U.P Forest Corporation Act, 1974. Constitution of India, 1950 : Article 226-Exercise of writ jurisdiction by High Court-Assessee instead of seeking reference uls 256 of Income Tax Act moved High Court by F way of writ petition-Held-High Court ought not to have entertained writ petitions when alternate remedy was available to assessee-Nor the question whether the U.P forest Corporation is a charitable institution not raised before assessing authorities should have been examined by it for the first time-Assessing authority directed to consider this issue. Interpretation of statutes : Principle of esjusdem genesis-Applicability of U.P. Forest Corporation the assessee, was constituted under the U.P. Forest Corporation Act, 1974 for better preservation, supervision and development of forest produce within the state. It took over the woI'k fonnerly H done by forest contractors and its income was from exploitation of forest 22 produce and sales thereof. · The assessee, during assessment proceedings for the years 1977-78 1980-81 and 1984-85 claimed that it was a local authority and therefore its income was exempt from tax under section 10(20) of the Income Tax Act, 1961. The assessing officer however, rejected the claim and taxed it as an 'artificial jurisdictional person' in respect of the years 1977-78 and 1980- B 81 and as a 'co.mpany' for the year 1984-85. 1n appeal, the Commissioner of Income Tax (Appeals) held that the assesee was a local authority and hence, its inco!l'e was exempt from taL This order was however, set aside by the Tribunal Instead of seeking a C reference u/s 256 of the Income Tax Act against the order of the Tribunal, · the assessec moved the High Court by way of writ petitions which were allowed, holding that the assessee was a local authority and therefore, its the income was exempt from assessee that . it was a taL charitable The High Court also upheld institution and hence, . the in contention any case, its of income was exempt from tax under section 11(1) of the Income Tax Act.· D 1n the appeals filed by the Revenue before this Court, it was contended on behalf of the appellant that the High Court ought not to have exercised its jurisdiction under Article 226 of the Constitution since the respondent had not exhausted its remedies under_ the Act; and that the decision of the High Court on merits was contrary to the law laid down by this Court. On E the other hand, the assessee contended that the ass~ssee Corporation had been set up to discharge governmental functions and was a local authority u/s 3(31) of the Ge11eral Oauses Act and satisfied the criteria of loc:il authority its laid down by this court in the c~se of UO I v. RC Jain, [1981) 2 SCR 854; and that 3(3) of the UP Forest Corporation Act provides that the F corporation shall be a local authority for all purposes and Section 17 states that the corporation fund shall be regarded as a local fund. Allowing the appeals, this Court 1984-85B art- ree @@. wea% afteray 4 Prakor-af-4977-78 Frain ar went Fafa wf ans sik fqat oreame-orfSPrae 1980-81 wy ange S at dda git ¥ BH aftet ee ea ge ose eevee S @ amet anita seq aie PretR @ake at weaT4ait ORRUT a site wari & seq asf ge sel qHatact at ead 4 wad ev sa omene ue allegat facia @ azar sa ate at GRG wen vita set err| cont ea ga aa we aie 2a 8Tira ol SRI. SPT aR Vida visa wt aya ord dita & arqeds 226 S arity afterWigel Fel weit ase1 (Ge 5, 14)”-_| gaatOat aeaoe or eure Bem aa-aX — ga afar, attees | 4 1961 arddiet (re wea Rr we gad 8- fe wn wear ‘afePraa’ veil wieitawe mirent 8)er 8 St ax art seifere 10(20) GI GI2. Tg Paidre wer neeERT fever ot Prom ar war er met| ae Pore Ge wee ar waayaH Perd wRNaT, ofa, Taam, 1974 fare ters o fary ak Team =Urarea Puta wren [1098] 4a.A 3. % opitet Prater af 1977-78, 1980-81 six 1984-85& Waftla €| Rete orbstim et a10(20) & wRorraer oe & vere& we fey ut at ent oft| Rak a1977-78 3 1980-81 @ fog ee“Phar after sre asa at wfFae aren aie. fraae 1984-85 & fay “aot” at wfsifa F oe ama|_ 4. 74 serif + Pakaf 1977-78 sie 1980-81Yaar FX ata wrsa at ak aaaSYA (stite), Faker af 1976-77 Gt aad 1977 at Re wafer ¥. 1568 4 saree Vea =aoF foreaa or anger at gy ge Preto war fis melt wria weer on aie exterAol ST GT aF Ge wes At| ga sree a alowd ae ata J quit A ag aie wet.SIAR AYaa (ate) S are Gt Sa SN we aed GK ar fH yell wea wa ay save. aa’ Te5. Feel a afarerr fafea war er sra-ne afdfraq at art 256 & ania Pea @aySY aT & soy Prefer ai1977-78 six 1980-81 & dda ¥ aero d asi ak akuan Re1984-85 array & tide wige 4% Peer oe eT wif aarent fare | fey ver vy wrsane at A ga geht am 88 Ee soverare Re afranat St wer ger waa ae Ev 4 aBe we Ht |Ger PMTS UHweal err we ah getter at as of RH se Gt der é alle eviak gaat arg ax feats 4 afar st oer 11(1) & ania we d fare ert ol| wer sae ah! 6. faery gonad ERT SA aieYoga celle S arena fe wea wae st aye 226 FSTAR oT WaT Ser wey on, srtoell at ak 8 Paet fen wean fe yodS see WvemirowT A set AMT VT Woot| ga seit S eels a antonll & ade ¥ aneeh.da Byferar| Ron!7. far ote ft ve.tqen 4 well at sik & Pater fear fe weit Pert st wrenve @ set pal F wartia or fet wife we &on fay| ae at At wt Paes of ok fear ae war TEM fe seR Gs wee aflPray aa Pore aanTfk 3(31)aA F are waa 3 *" [1982]1 34. fF. 0. 326 = [1981]2 va. UW. ome 854. [1964] 3 Wa. wh. ane ese.*.219omg. GIR. 515. HABE SRA, IAT @. Gay wee aa Pere (RT. Harel] fated Ga Artest WR BARAT SGT SA TET ERI ART We TH oes! aS ATAct Aafraid fay ay 3, ak gelfery ver ~rerera 4 og eeadly Teh far| ge wet ue fe aa Pra,afer at at 2(15) ann aen verve eaiel water@ fery feet fates ateac a sri afetcd A& ay ord aoe& alk geitfery suet sre at afar St arr 11(1) (®) @ seit we WaT ze gu !.8. Ba ued ee weWw ftan oe fi eT melt afar aT aT 10(20) & aia we oT 2stat eerie mtert a tet ora ot ye waft Sora”, yot afrera” are@ ora” A.B oes gure F UW VAS aN Tey A AMIR A ORNs eh aeWHartot feet ag 6 ware a Mar 8 HH wal a faga aes at A afta al da G |HR aT are Get aT faa & wera S says a UqyS sa s I”. og! Rater nant” after St ora-ay aftPrad % ufenisa ze fear ware -aenftwrte mse” ol were as alfa st ae 3(31) F Prt wer A oReTa fear vate — |“warwftrert 8 amaferst atta, feet ats,waa argent ot Pra a arymiter, at Tafa wria Pa & Pda a dt or dr wr a sean ¢ a fa(PRISOT wae WRGBNI RATS, aa FP se aftafed wx saciaqeiteg det sik ser aim dag wer (sa Form) sik or,Iesik aoawRaea fore’ @ outed Ae 4 free fear wa| aeeihag FarottaygGrat atk seq sH das Wee (sa FORA) sik ser ae arel A gE sella wK gal fear 7a fHwaite sift a| we eitat ag eft fe uee wRaeqt Pom wri miter vet om sfew ya* Sal s| gaara F Se AAU UR fla Gd Sy SS 696 We Ye Ad Aaa far a -— ‘quo Gs affiad tS ag cRareé afar wes a a S uaa say ay ae eer we afar a art 3(31) A gen okra “eta ofr’ ve or oRetat aed warYS 697 W we Aarafed Bt ay eft fe Fra ot Pe of write fila vel wast wT wed|odieWX far od et f& aa wor GRaer afffray, 1950 tad we wadHea s fe Fra er wat " [1982]1 oH. FF. 4. 326 = [1981] 2 Wa. Ut. ome 854. BE1:J> : 1.L The High Court was not correct in concluding that the G respondent was a 'local authority' ·and entitled to exemption from payment . of income tax under Section 10(20) of the income tax Act, 1961. The Respondent Corporation is not a local authority within the meaning of that expression contained in section 3(31) of the General Clauses Act. [33-E) 1.2. A 'local authority' as defined under section 3(31) of the General H SUPREME COURT. REPORTS (1998] 2.S.C.R A Oauses Act, must have the attributes of a Municipal Committee. District Board or body of Port Commissioners. Tbe distinctive attributes which a local authority shares "ith a municipal corporation etc. are: (i) It must have a separate legal existence as corporate bodies; (ii) it must be elected, partly or wholly, directly or indirectly, by the inhabitants of the area; (iii) it must enjoy a certain ~egrce of autonomy; (iv) it must be entrusted by statute with B such govemii.~idal functions and duties as are usually entrusted to municipal bodies; (v) It must have the pow-er to raise funds for its activities by levying taxes, rates, charges or fees. (29-F-G) Union of India v. R.C. Jain, (1981) 2 SCR 854 and Calcutta State C Transport Corporation v. Commissioner of Income Tax, 219 L T.R. 515, relied on. · 1.3. Three of the five attribntes of a local authority are absent in the case of the UP Forest Corporation. Firstly, the members of the respoiident-Corporation are not wholly or party, directly or indirectly,-elected by the D inhabitants of the area. It cannot be said that because the State Government is a democratically elected body, therefore, persons nominated by the government to be members of the corporation must be regarded as being indirectly elected by the inhabitants. Secondly, the respondent does not have the functions and duties which are usually entrusted to the Municipal bodies such as providing civic amenities. Finally, and which is most important, the E respondent does not have the power to raise funds by levying taxes, rates, charges or fees. The expression 'local fund' occnrring in Section 3(31) of the General Clauses Act would mean the fund of a local self-government. (32-C-E) · 2. E\·en though section 3(3) of the UP Forest Corporation Act regards F the corporation as a local authority hut for the purposes of the Act, the meaning of the expression 'local authority' as contained in General Oauses Act, which is a Central Act, has to be seen. Merely because the UP Forest Corporation Act regards the respondent as a local auth!'rity, would not, in law, make the respondent a local authority for the purpose of section 10(20) G of the Income tax Act. (28-H; 29-A) Valjibhai Muljibhal Soneji & Anr. v. The State of Bombay and others, (1964) 3 SCR 686, relied on. · · 3. The local authority specifically mentioned in section 3(31) of the Act clearly can he regarded as local bodies which are intended to carry on. H self-government. Accordingly, 'other authorities' referred to in section 3(31) must be similar or akin to municipal committee, district board to body of A Port Commissioners. (31-G-Hj 4.1. In the absence of a contention having been raised before the income tax authorities that the income of the assessee-corporation is held for charitable purpose and therefore exempt from tax under section 11(1) of the Act, the High Court ought not to have examined this issue for the first time and then concluded in favour of the assessee. Whether the income of an institution can be regarded as held for charitable purposes and whether the institution is entitled to be registered under section 12A of the Act requires investigation of facts. If the High Court wanted the issue to be decided, the proper course would have been to remand the case to the tribunal c or the assessing authority for a decision: [33-G-H-Fj 2 [1986]3 34. fF. 5. 401= [1986]1 Te. Ul. ame 570.; ” [1964]3 Ta. U. ame 686. * 949 amg. ¢L SR. 515. - Gedaa aad Profs aret [1998] 4 a4. Fr. 2. Lot, afafan 4 arcfie oRurst 1807 & wera ds afohay 4 arafie oRarst wt aftrrdt wai atfey, wa am fe fasa a dat 4 po fiega a, ay fea anaeg i 10.aa atte F Ged Rei a ar] Hee Way, Selif sax ves aq Pre afthraa atfafa 4 afiar et art 1020) & wart & fey wiretta wifewet a ore| seaell wiria-WSF UW Ae, Fa aa Hf Ul se ceaWw eam fey fet at wet fe we ure wee A PAafaray at ar 3(3)sepwire wert | ge “Mes EN RA We sik seq TAARaie sea el (Swed) wae A Te sana ee F fay ve Healt afer at wh affs alg Fore write wife& a ae lerra afofram, 1965 & ar fey aM @ dae 4 ae werSort ga a fe wer feet fore wet wits weer S| TT as afar aH aT 3(3t)4 ger ufenitd ‘emia mftert aftaafer wr eel ome ey sa wea ERI TS 857-858 WwWoT ea Osa ak Vitra ae & sie Gad ak F quae aed S| oer 3(31) st wrsi wtwel ak wrongUden ga aa ot Yea at 8 fe wit oeey S far feet :mee aterafee, fren asa wet sige @ Aare at aad a eee eefeet ats UW sige @ fea ada e| fq ort ww afrad aa ert afey setafs we fafte wo 8 UROR et Trofeo wie AftPeso a year d Pie zea 8a seen &| fee. fare ym ad oh RS ha wt a ao ot Baga ot aTTRUTH, fret as, a aged& Pore a arr wire mer } we_aeferaacael MRR! afar set eM afey aftg fate wr 8 erat eats wa eet aiey| eesftRed we ufeaita aa 4 orf wen afey sik waa: what:UW APTA: weIeUl Wa:rTERT STS TRUfeHrait BY ARE fear ora & cher fe eared aie en Yaa, wt akeor FHeo Se BH wer sr wey sik Ge a TA W Yow VquEN aed-aet. aorailot oft ae ot faa ert afey tae aa we oq & afated Set alee ot-wer ene fear SR I,erta. Ga weraPere fe. Bay Proctor ar warer saree. % Pate, era UfeToO.:FC Searea 7 eet are me ae ot wher at sik gw Peet wud aRaer Parr sar omar ompR aa! APA A Roan sen ret HeiA ze ata Ataeval &, PrefGfreane far wan on —:ee| ay—WRassfear a sae fea a aia Paik a ahd. arn a eer | Rete wea|osewRatfer é Perr fier offrar wert wer at ord FT use is wRoer sik 19 dad wore ot fem @ owt mere Ss fe ada akaaa;vf *seRoferet ufafe, fret as aaaat afeat sik petwaa adfF 1;oeBaa SB fey ste ge tide F afeect at tore & S fay fen was weaseortaae ape Reef armen, weg, rar as a wr opeRareS geWAM &| Palfedt Port et germ facet face wrftarr S wre val at oT wane, Pred ore:set“oy are oreewer da:Pfsae geCetaaen) sik ae ee we gy fe mateos, < ae aa ana wfte, ord ret. OS Pear Rore-ert em, ue Re etS gar fay 8 wrex a amex rt wim, da adhe wet at I af,HH are, Wa vat fore GY-corerHAAG ISM WaT -aey STHwt. alsa F | cifse ware A dete oA>aftr & sar &- akesite sad atert at afd wet a wae, Tee eede7afervet Sets Lorgareg ged site a Sr ae aT gaat Vasile waa avor.cReet Frm afefrar at are 46 Por ow fafa aan at afta ven aed foe ae alga *os. Ma@ orf 8 ware" ce via& (arr 45 at coer (2) Ht a waa af a ere |>aed 8 ag aed & fe var wide Perr & state wae oie eid antenRel dartae stPoa. faga2] 1 a. dome f. 7. 61s. 326= [1981] 2 Te. a. ome 854. Gerda rare fvta. arr [1998] 4 34...f. 7. 4.2. The assessing authority is directed to examine within six months the question as to whether the Corporation is a charitable institution and his income exempt from tax under section 11(1) of the Income Tax Act. Since the corporation can not be regarded as a local authority, interest of justice D would demand that the question as to whether the corporation can be regarded as a charitable institution should be investigated and examined by a proper forum under the Act. The liability of the respondent to pay tax would be subject to the outcome of that decision. (34-C-Dj Commissioner of Income-Tax, Andhra Pradesh, Hyderabad v. Andhra E Pradesh State Road Transport Corporation, Hyderabad, [1986) l SCR 57'1, cited. 5. The High Court ought not to have entertained the writ petitions when adequate alternate remedy was available to the respondent-as<~ssee. F The petitioners should not normally short circuit the procedure provideJ by the taxing statute and seek the redress by filing a petition under Article 226 of the Constitution of India. (34-E) CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 180-182 of 1989. From the Judgment and Order dated 19.5.88 of the Allahabad High Court in W. P. No. 4424/87 and 216/88 and 8215of1987. Ranbir Chandra, N.K. Aggarwal and B. Krishna Prasad for the Appellant. S.P. Gupta, Sunil Gupta and H.K. Puri for the Respondent. SUPREME COURT REPORTS A The Judgment of the Court was delivered by KIRPAL, J. The question involved in these appeals is whether the respondent is a local authority and, therefore, its income is exempt from tax under Section 10(20) of the Income Tax Act, 1961 (hereinafter referred to as 'The Act'). The U.P. Forest Corporation, the assessee herein, was constituted by Notification issued under Section 3 of the U.P. Forest Corporation Act, 1974. This Corporation was established for better preservation, supervision, development of forest and better exploitation of forest produce within the state of Uttar Pradesh. It took over the work which was formerly done by the C forest contractors and its income was from the exploitation of forest produce and sales thereof. These appeals relate to the assessment year 1977-78, 1980-81 and 1984-85. During the course of assessment proceedings, the respondent had claimed its status to be that of 'local authority' and, therefore, its income was liable D to be exempted from levy of tax by virtue of Section l 0(20) of the Act. The assessing officer rejected the claim and, in respect to the assessment year 1977-78 and 1980-81, it taxed it in the status of"artificialjurisdictional person" and in respect to the year 1984-85, as a 'company'. E The respondent then filed appeals in respect to the year 1977-78, 1980-81 and the Commissioner of Income Tax (Appeal), following in earlier decision of the Allahabad High Court in Writ Petition No. 1568/1977 for the assessment year 1976-77, came to the conclusion that the respondent was a local authority and as such its income was exempted from tax. This order was challenged in . appeal before the Tribunal which set aside the order of the Commissioner of F Income Tax (Appeals) on the ground that the respondent was not a local authority in view of the decision of this Court in the case of Union of India v. R.C. Jain, [1981] 2 SCR 854. Instead of following the procedure prescribed by the Act by way of a reference under Section 256 of the Income Tax Act, the respondent chose to G file three writ petitions in the Allahabad High Court challenging the order of the Tribunal in respect to the assessment years 1977-78 and 1980-81 anc:! order of the Assessing Authority for assessment year 1984-85 which had been made by it. These writ petitions were entertained by the High Court which allowed the same by coming to the conclusion that the respondent was a local H authority and, therefore, its income was exempt from tax. Before the High dua aé @ fe Prem aero vs ofeFran, 1857 SH ae 3(91)6 ae F wH write mitesMH Ue aca Wier oe A oral ¢ fe wera ds aforaq at are 3(31) F werette wire” wrUra Fara wiitent ve & freane ak ante dr sear oe F wonor erd ary Aet fear*wt3(31) wen 4 fafafése Rife od wor ofa & uftaftaa Prot wieita ¥ ag wifferal qs da ar a wet we wet we OWS ze| wero Prova ws AT afifa OT THT a s a THSIRTTes & fay arafta F| wat oro 2 fH ae wRart ae Ha oedt 3 fH WI mdeFure ft arate a wire fe ar faa a vd eer afeg| wafer waif, fren as,Tet anged Prot ta wRaw & ot wire sal FT uRHt areal or Premed ed & sks ART 3(31)>0RO fers Ae, fron ats T aA aged Para @ aaa ak Ue es arfeu| wa Wa sik sqTM snes’ ae aeA War as afefraa Ft ant 3(31) & seria ars aa witert atwaS we ore feed a yoy of secre fear wa @| ae de ake oma aa ae eh.’ TaPort & weed or fated Quit: OT Ate: Mewar: aT amet: sa & Prafeat err vet fear oaro] GaN ves at fra aflPras Ht a4 S spa Pra ve steamer ailx are Waal & fiery 7|saat i Wars at wor VaR ert wAacRra feu oe s| ga we fged fey ay Weel A ave fraifad Pera ¢ ad: wea ant Fra SB wee @ wo A aaa afeaal at Prakrat arrae oT whe dex Asr at ules ae @| MRT Gs affraq st aN 3(31)F as aa/MRL! ae 4 Prafatad aanftafta at ag eft :— SRT:Oe. TE wet Tarts we a Heer at veloS aa Atal gery. OA& fay feet vfaoa ot aden a a oft faega aars ara 4 gad at ag Warsil@ fay afta wr & uqyeta geoMW wafedt 8| aa ae ae PAT @ fe oy sik You F " [1982] 434. f. 4. 326=[1981] 2 Ua. 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Re afrasilMga ge EL eet wae ge ote St ioe ot wera ae wien aan Bea Sh A Aefeor- Se Ame & fafa. cedl site oferta a ak veront S ata asf ae adit yogaof ear F| syeeq 226 & aie afreart orga wel oetafey|| 15. SRGROJ ante AGN Ht unl F se Ved “Marea oT fatieaa sored fear va2 1a Ge afifaiRa eed auf meeelf wirite miffexor ae & freet are of area afarat GR 10(20) & ski |e A we wre at Puke wflent at veil S ga ad we flax oe HTPres ea & fe saat ara areca aftPraq at arr -11(1)(H). & wadel @ any Gees ael F| Fawm afta ga wer & fefeaa & ais erm| aa ot aad ale sew aa|- [1998]4 ua. fA. 4. 107 24rd, 1998 «gdhdewcgen fates (sama or sia ait sian) affran, 1986 (1986 aT WG. 11)-paafea weit (oraaen fafraaa) afafraa, 1951,a 18mH(1) (a)] — faffen-ra— adaMAR G stew V gale canciged fe. aaa Gasteat Hl WaWEN! — Ag WAN Aca: Wa TS.feeale FY WAa-aAa WR Ua Hall al agAM — agg AY Hal Waa eM B ww fea wa -Geer sigeon — dar ert wor aka at erat F aT|a Court, it was also contended by the respondent that it was a charitable A Institution and, therefore, its income was in any case, entitled to exemption under Section 11 ( 1) of the Act. This contention also found favour with the High Court. In these appeals, by special leave, apart from contending that the High Court ought not to have exercised its jurisdiction under Article 226 of the B Constitution as the respondent should have availed of the alternative remedy open to it under the Act, it has been submitted on behalf of the appellant that the decision of the High. Court on merits is clearly contrary to the law laid down by this Court and the respondent cannot be regarded an being a local authority. In support of this contention, strong reliance was placed by the C counsel for the appellant on the aforesaid decision in R.C. Jain's (~upra) as well as the decision in Valjibhai Muljibhai Soneji & Anr: v. The State of 'Bombay (now Gujarat) and others, [1964] 3 SCR 686 and Calcutta State Transport Corporation v. Commissioner of Income Tax, 219 I.T.R. 515. On behalf of the respondent, Shri S.P. Gupta, learned counsel submitted D that the respondent Corporation had been set up to ~ischarge Governmental functions and it was a local authority within the meaning of that expression in Section 3 (31) of the General Clauses Act. It was also submitted that the Section 3(3) of the U.P. Forest Corporation Act provides that the Corporation shall for all purposes be a local authority and further more according to Section 17, the fund of the Corporation is regarded as a local fund. It was E contended that the respondent satisfied the criterion of local authority as laid down by this Court in R.C. Jain's case (supra) and, therefore, the decision of the High Court calls for no interference. On the question whether the Corporation exists and functions under