s:c.R. D. · R. MAD HA V AKRISHNAIAH v. THE INCOME-TAX OFFICER, BANGALORE. f PATANJALI SASTRI CHAND MAHAJAN, s. R. DAS, GHULAM C.J., MEHR HASAN and J AGANN AD HAD AS JJ.] FJl)(;nce Act (XXV of 1950), s. 13, proviso–Validity thcreof- Constitution of Indian, Art. 277.
The assessee challenge<l the jurisdiction of the Income-tax Officer, Special Survey Circle, Bangalore, to assess income-tax and Super-tax on his inco1ne accruing prior to April I, 1950, in the State of Mysore, on the ground that the proviso to s. 13 of the Indian Finance Act, 1950,
by virtue of which he was exercising his power was ultra vires and void as the Parliament had no power to make a law authorising any officer appointed under the Indian Income-tax Act to levy
tax under the Mysore law prior to the Constitution. It was contended (i) that on general constitutional principles the Union Parliament had no power to make a law having retros- pective effect with reference
to pre-Constitution period, (ii) that the Parliament was also prohibited by Art. 277 from making a law authorising such officers as -in the present case to act in the S,t.1te of Mysore :
Held, (repelling the contentions) (i) that the Parliament had such power vide the judgment delivered in Case No. 296 of 1951, (ii) that while Art. 277 authorises the continued levy of taxes lawfully levied by the Government of the State before the commencement of the Constitution and their application to the same purposes as before, even after the Constitution came
into force, there is nothing in the article to warrant any implication that such taxes should continue to be levied,. assessed and collected by the same State authorities as before the Constitution and there is
nothing in Art. 277 to preclude Parliament making a law providing for -the levy and collection of income-tax and super-tax under the Mysore Act through authorities appointed under the Indian In-
come-tax Act. CIVIL APPELLATE Juruso1CT10N : Civil Appeals Nos. 209 and 210 of 1953. Appeals by special leave against the Judgment and Orders dated 4th April, 1953, of the High Court
of Judicature of Mysore at Bangalore (Medapa C. J· and Vasudevamurthy J.) in Civil Petitions Nos. 20 and 21. of 1953. 5–94 S. C. lndia/59 Dec. IG D.R. A1adhava- krishnaiah v. The income-tax
Officer, Bangalore. Palanjali Sajtri C.J. [1954] M. Ramaswamy, Senior Advocate, (B. Neelakanta, with him) for the appellant. M. C. Setalvad, Attorney-General for India, (Porus A. Mehta, with him) for the respondent.
1953. December 16. The Judgment of the Court was delivered by PATANJALI SASTRJ J.-These two connected appeals arise out of applications made to the High Court of Judicature at Bangalore under Art. 226 of
the Constitution challenging the jurisdiction of the Income-tax Officer, Special Survey Circle, Bangalore, to assess the appellant to income-tax and super-tax on his income accruing prior to April 1, 1950, in the State
of Mysore and praying for the issue of appropriate writs in that behalf. The applications were dismissed by the court and leave to appeal having been refused, the appellant has brought these
appeals by special leave of this court. It is a matter of admission that the officer making the ossessments was an officer appointed under the Indian Income-tax Act, 1922, and that in
making such assessments he was applying the income-tax law in force in the State of Mysore down to the end of the year of account 1948-49. The officer was exer~ising jurisdiction in the State by virtue of the proviso to
section 13 of the Indian Finance Act, 1950, which reads as follows ;- Repeals and Savings.-(!) If immediately before the lst day of April, 1950, there is in force in any Part B State other than
J ammu and Kashmir or in Manipur, Tripura or Vindhya Pradesh ·or in the me:cged territory of Cooch-Behar any law relating to income-tax or .super-tax or tax on profits. of business, that law shall
cease to have effect except for the purposes of the levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous year for the purposes
of assessment under the Indian · Income-tax Act, 1922, for the year ending on· the 31st day of March, 1951, or for any subsequent year, or, as the case may be, the levy, assessment and
S.C.R. collection of the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March, 1949 : Provided that any reference in any such law to an
officer, authority, tribunal or court shall be construed as a reference to the corresponding officer, authority, tribunal or court appointed or constituted under the said Act, and if any question arises . as to who such
corresponding officer, authority, tribunal or court is, the decision of the Central Government thereon shall be final. … " It is contended that the proviso is ultra vires and void as the Union Parliament had no power to make a
law authorising auy officer or authority or Tribunal or Court appointed or constituted under the Indian In- come-tax Act, 1922, to levy, assess and collect income- tax and super-tax payable under the Mysore law prior
· to the commencement of the Constitution of India. The contention is based on two grounds : namely, firstly, on general constitutional principles the Union 'Parliament had no power to make a law having retros-
. pective operation with reference to the pre-Constitu- tion period ; and s~condly, the Union Parliament is prohibited by article· of the Constitution by necessary implication from making a law grafting
on the Mysore income-tax law the machinery for assessment and collection provided under the Indian ·Income-tax Act, 1922, for purposes of assessment · thereunder. So far as the first ground
governed by the judgment Rajasthan case [Union of '](abra (') l It remains only ground based on article "thus : is concerned, the case is just delivered in the India v. Madan Gopal
to deal with the second 277. That article reads "Ally taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were . ,J,ieing lawfully levied by the Government of any State
:,,or.by, al!y municipality or other local authority arc ·' body . for, the purposes · of the.. ~tate, municipality, , dist~i~t-~~0,pther I01=~l ,.,area, .•• may, . notwithstanding,. ~hat
( 1) Infra. P 54'. .. ' J953 .D.R. Madhtna~ krishn11iah v. Thi Income-tax Officer, Bangalore. Patanj11li S•stri .. C;J. D.R. Madhava- luisJmaioJ v. Tiu Income-tax O.ffiar, Bangalore.
Palatdali Sasfri C.J. [19541 those taxes, duties, cesses, or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is
made by Parliament by law." It was urged that, inasmuch as the article authorises, among others, the income-tax and super-tax which was being lawfully levied by the Government of Mysore prior to the commencement of the Constitution
to be levied and to be applied to the same purposes even after the commencement of the Constitution until provision to the contrary is made by Parliament by law, and no such law was made by Parliament till
April 1, 1950, when the Indian Finance Act, 1950, was enacted, it followed by necessary implication, the Mysore law of income-tax must be applied for the levy, assessment and collection of such taxes and, as
the legislative power conferred on Parliament by article 245 is subject to the provisions of the Constitu- tion including article 277, Parliament had no power to legislate, grafting
officers and authorities appointed under the Indian Income-tax Act, on the Mysore State, for the levy, assessment and collection of the tax under the State law. We see no force in this argu-
ment. While article 277 undoubtedly authorises the continued levy of taxes lawfully levied by the Govern- ment of the State before the commencement of the Constitution and their app!ication
to the same purposes as before, even after the Constitution came into force, there is nothing in the article 10. warrant any implication that such taxes should continue to be levied, assessed and
collected by the same State authorities as before the Constitution. As the High Court rightly pointed out, it would obviously have been inconvenient and unnecessary to have oflircers appointed under the Mysore Income-tax
Act continuing to function only in respect of the earlier assessment years side by side with ofliccn appointed under the Indian Income-tax Act also functioning in the State for assessments subsequent to
April 1, 1950. Both as a measure of economy and witli a view to smooth and efficient lIWl3gement, S.C.R. was obviously necessary and desirable that the change- over frorri the Mysore income-tax
law to the Indian Income-tax Act should be in the way provided by sec- tion 13 of the Indian Finance Act, 1950. We find nothing in article 277 of the Constitution to preclude Parliament making a law providing for the levy and
collection of income-tax and super-tax under the Mysore Act through authorities appointed under the Indian Income-tax Act. Accordingly, we hold that the Income-tax Officer, Special Survey
Cirde, Banga- lore, had jurisdiction to assess the appellant to income- tax and super-tax in respect of the income of the period prior to the commencement of the Constitution. The appeals fail and are dismissed with costs.
Appeals dismissed. Agent for the appellant : M. S. K. Sastri. Agent for the respondent : G. H. Rajadhyaksha. THE UNION OF INDIA tJ. MADAN GOPAL KABRA. (PATANJALI SASTRI C.J., MEHR CHAND MAHAJAN,
S. R. DAs, GHULAM HASAN and JAGANNAD HADAS JJ.J Indian Income-tax Act (XI of 1922) as amended by Finance Act (XXV of 1950), s. 3-Taxable territories-Meaning of-Section (14-A) proviso ( b) (i) and (iii)-Income accruing to assessee in State of Rajasthan in 1949-50-Liability to income-tax-Sections 3 and 4 of Indian Income-tax Act and s. 2 of Finance Act
and proviso to the amended s. 2 (14-A)-Constitution of Indian, Arts. 245 and 246 read with entry 82 of List I of Seventh Schedule-Parliament com- petent to make laws with respect to taxes for the tvho/e of lndia- Constitution competent to make laws having retrospective operation for pre-Constitution period.
Respondent was· residing and carrying on business in the District of Jodhpur in Rajasthan, a Part B State. His income arising therein during the accounting year 1949-50 was sought to
be assessed to income-tax for the year 1950-51 under the Indian !nCQme-tax Act as amended by the Indian Finance Act. He presented a petition under art. 226 to the High Court praying D:R.
Madhtwa- krishnaiak v. The Income-tax Offim, Bangalore. PataT/jali Sastri C.J. Dec. 16.