Scoble and Others v Secretary of State for India
| Jurisdiction | England & Wales |
| Judgment Date | 16 June 1902 |
| Date | 16 June 1902 |
| Court | King's Bench Division |
NO. 249.-IN THE HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).-
Income Tax, Schedule C. - Annuity payable out of any public revenue. - The Secretary of State for India exercised option of purchasing the undertaking of a Railway Company by payment of an annuity for a term of years instead of a lump sum.
Held, that income tax was properly charged on the whole annuity. Foley v. Flecther distinguished.
1. The plaintiffs are the annuity trustees referred to in the Great Indian Peninsula Railway Purchase Act, 1900.
2. By a contract dated the 17th August, 1849, made between the East India Company of the one part and the Great Indian Peninsula Railway Company of the other part, it was agreed that the East India Company should provide land for a railway to be constructed by the Railway Company, and that the Railway Company should construct a railway on such land, and that on the completion thereof the East India Company should grant to the Railway Company a lease of or otherwise secure to the Railway Company a right and title to such land for a term of ninety-nine years, commencing from the 17th August, 1849, unless the same should be sooner determined under the provisions in the said contract contained.
3. By the 23rd clause of the said contract it was so far as is material provided as follows:-
That at any time within six calendar months after the "expiration of the first twenty-five years of the said term of "ninety-nine years or at any time within six calendar "months after the expiration of the first fifty years of the "said term it shall be lawful for the East India Company "to give notice to the said Railway Company in London "and at Bombay of their intention to purchase the said "railway and works together with the telegraphs (if any) "and the engines carriages stock plant and machinery "belonging to the said railway and works and thereupon "at the half-yearly day next but one following such notice "the land to be provided as aforesaid with the railway "thereon and all buildings works fixed machinery telegraphs "and conveniences whatsoever shall revert to and "become the property of the East India Company as the "owners thereof by purchase on account of the Government "of India .... and the East India Company shall "be bound to pay in London on the said half-yearly day "for the purchase of all the said premises the full amount "of the value of all the shares or capital stock in the said "Railway Company.
4. By the 26th clause of the said contract it was so far as is material provided as follows:-
That in every or any case in which under the provision "of these presents the East India Company shall become "bound to repay the capital expended by the said Railway "Company as aforesaid or in which the East India Company "shall become liable to pay for the purchase of the said "railway works and stock before the expiration of the said "term of ninety-nine years it shall be lawful for the East "India Company instead of paying a gross sum of money "in respect of the premises to declare by notice to the said "Railway Company in London their option to pay an "annuity from the time when the gross amount would be "payable and to continue during the residue of the said "term of ninety-nine years and in that case such annuity "shall be payable in London on such two half-yearly days "in the year as shall be selected by the East India Company "in that behalf with a fractional part for any broken half-year "the rate of interest which shall be used in calculating "such annuity being determined by the average rate of "interest during the preceding two years received in London "upon public obligations of the East India Company and "which shall be ascertained by reference to the Governor "or Deputy-Governor of the Bank of England for the time "being.
The plaintiffs crave leave to refer to the whole of the said contract as if the same were herein fully set forth.
5. The said railway was duly contructed, and was subsequently extended under the provisions contained in two contracts made between the same parties, and dated respectively the 2nd August, 1853, and the 15th November, 1854, both of which contracts incorporated the clauses of the contract of the 17th August, 1849, hereinbefore in part set forth. The plaintiffs crave leave to refer to the whole of the said contracts as if the same respectively were herein fully set forth. There were also contracts relative to the said railway which are referred to in the schedule to this Statement of Claim. The plaintiffs crave leave to refer to them if and so far as is necessary.
6. Under and in pursuance of the Statute 21 and 22 Vict., c.106, all the powers of the East India Company under the said contracts became, and were, from and after the date of the said statute coming into operation, vested in the Secretary of State in Council of India (hereinafter called "the Secretary of State" for the time being.
7. On the 18th August, 1899, the Secretary of State, acting in pursuance of the provisions contained in the 23rd clause of the contract of the 17th August, 1849, gave notice to the Railway Company of his intention to purchase the railway and works constructed under the said contracts, together with the telegraphs, and the engines, carriages, stock, plant, and machinery belonging to the said railway and works.
8. The amount to be paid by the Secretary of State to the Railway Company for such purpose was...
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