ABDULLABHAI M. BHAGAT, ETC. vs THE INCOME-TAX OFFICER, SPECIAL CIRCLE,MADRAS

The Supreme Court upheld the imposition of surcharge on income under the Finance Acts of 1942, 1943, 1944, and 1945, affirming that the Federal Legislature had the authority to legislate for such levies under Section 100 of the Government of India Act, 1935, and item 54 of List I of the Seventh Schedule. The Court clarified that the term 'Federal purposes' in Section 138(1) does not limit legislative power regarding surcharges, which are intended to contribute to the revenues of the Federation. The petitions challenging the surcharge were dismissed, affirming the legality of the tax imposition.