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PETITIONER: COL. HIS HIGHNESS RAJA SIR HARINDER SINGH BRAR BANS BAHADUR

       Vs.

RESPONDENT: COMMSSIONER OF INCOME-TAX, PUNJAB & ORS.

DATE OF JUDGMENT15/10/1971

BENCH: VAIDYIALINGAM, C.A. BENCH: VAIDYIALINGAM, C.A. REDDY, P. JAGANMOHAN MATHEW, KUTTYIL KURIEN

CITATION:  1972 AIR    7            1972 SCR  (2)   1  1972 SCC  (4) 536

ACT: Income-tax Act, 1922--Ruler of erstwhile princely  state--If liable  to  tax  in respect of  Personal  income  earned  in British India. Princely State--Ruler--Status in International law.

HEADNOTE: The  appellant  who was the ruler of an  erstwhile  princely state,  challenged the assessments made against him for  the assessment  years  1946-47  and 1947-48 in  respect  of  his personal income earned in British India, on the ground  that he being a Ruler was immune from taxation-on every source of income.   On the question whether the appellant could  claim immunity  from tax under the Indian Income-tax Act, 1922  in respect of the income earned in British India, HELD:  The appellant was not entitled to any  immunity  and, therefore was liable to tax. (a)  In International law the head of a  State  representing the   State  as  such  enjoys  certain   extra   territorial privileges  in other States.  Some of these  privileges  and immunities  are political and are generally the  subject  of executive and administrative instructions.  There are others in relation to the applicability of the municipal laws,  the immunity from which are either recognised by the common  law and  which  courts will not enforce, as in England,  or  are dealt  with  by  those  laws  themselves  by  affording  the necessary  exemption; yet others are regulated  by  treaties and international conventions. Whatever might be the various aspects of the privileges  and immunities enjoyed by the Heads of State, the rulers of  the erstwhile princely states did not enjoy the same or  similar privileges  as  those of the Heads of States  recognised  as members of the family of Nations in international law.  From the  very nature of these princely states it was clear  that they  were subject to the sovereignty and protection of  the British  Crown.  While their relations with the  Crown  were governed by treaties, though initially on terms of equality, when  the British Crown in India became paramount,  the  re- lationship between it and the rulers became unequal with the result that these treaties became subject to the reservation that  they could be disregarded where the interests  of  the

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British  Empire  or those of the subjects  of  the  princely states were involved.  The status of these States as  inter- national   personalities  was  negatived  by   the   British Government  even towards the end of the 19th century and  it had been maintained that the principles of International law had no bearing upon the relations between the Government  of India as representing the Queen Empress on the one hand  and the native states under the suzerainty of Her Majesty on the other.  Again, though the status of these rulers in  England was  recognised  as being on par with other  rulers  in  the matter of personal immunity from legal proceedings in so far as  British  India  was concerned, these  were  the  subject matter  of  legislation under which the  ruling  princes  in India,  notwithstanding  that they were  not  recognised  as international  personalities, were accorded  this  immunity. Therefore,  any exemption the Rulers could claim had  to  be under the relevant taxing acts.  There is no such  exemption under the Income-tax Act.  Besides, the fact that the income of the 17 rulers  derived  from  Central  Government  securities   was specifically exempted by s. 60 implied that the rulers  were not  exempted from other provisions of law.  The  provisions in  certain statutes specifically making every Ruler  of  an Indian  State  liable  to  tax  only  militate  against  the assumption of immunity from taxation of the property of  the Rulers  at any rates provisions might have been ex  abundant ceutela. [21D-22B, 24G]. H.  H.  Maharajadhiraja’Madhav  Rao Jivaji  Rao  Rahadur  of Gwalior etc. v. Union of India, [1971] 1 S.C.C. 85, referred to. (b) Further it is now concluded by a decision of this  Court in  Commissioner of Income-tax, Andhra Pradesh v. H.  E.  H. Mir Osman Ali Bahadur, [1966] 2 S.C.R. 296 that the ruler of a  princely state did not acquire international  personality and  so could not rely upon International law  for  claiming immunity from taxation of his personal properties. [25D]

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos. 34 and  35 of 1969. Appeals  by special leave from the judgment and order  dated August  5,  1968  of the Punjab and Haryana  High  Court  in Income-tax Reference No. 40 of 1964. K. C. Puri, K. L. Mehta, S. K. Mehta and S. S. Hussain, for the  appellant (in both the appeals). B.  Sen, P. L. Juneja, Badri Das Sharma for R. N.  Sachthey, for  the respondent (in both the appeals). The Judgment of the Court was delivered by P.  Jaganmohan  Reddy, J. These two Appeals are  by  Special Leave  against  the Judgment Of the Punjab  &  Haryana  High Court  answering  the Reference under Section 66(1)  of  the Indian Income-tax Act 1922 (hereinafter referred to as  ’the Act’) against the assessee-the Appellant.  The Appellant who was  admittedly  a  Ruler of the  erstwhile  Faridkot  State challenged  the assessments made against him for  the  years 1946-47  and  1947-48 with respect to which  the  accounting years  were Vikram year 2002 and.2003 corresponding  to  the period  13th April 1945 to 12th April 1946, and  13th  April 1946  to 12th April 1947 respectively.  The;  assessment  in each of these years was made under Sec. 34 read with Sec. 23 of  the  Act, as the assessee’s income  from  dividends  and interest and capital gains earned by the assessee during the

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relevant accounting year in what was then British India  had not  been  brought to tax.  The assessee objected  to  these proceedings and contended before the Income-tax Officer that he  ’being  a Ruler of the Faridkot State  was  immune  from taxation on every source of income.  He could not therefore, by  virtue of his sovereignty be treated as an assessee  for any  purpose under the Act.  It was also contended that  the notices  under  Sec. 34 were time  barred.   The  Income-tax Officer  however,  rejected these objections and  held  that though under the 18 International   Law  the  Rulers  of  Indian   States   were sovereigns   and  immune  from  Municipal  Laws   of   other countries,  there  was no exemption at far as  the  personal incomes  of the Rulers are concerned from being taxed  under the  Act.  In that view he held that notices under  Sec.  34 were  valid and accordingly made an assessment.  The  Appeal to the Appellate Assistant Commissioner was without success, though  similar  contentions  were raised  before  him  with particular  reference  to the privileges  which  the  Rulers enjoyed under International Law both in respect of Civil and Criminal matters.  The assessee appealed against this  order to the Income-tax Appellate Tribunal where, however,,  there was  a  divergence  of  view between  the  two  Members  and therefore  the matter was referred to the President  of  the Tribunal.  After considering the decisions in regard to  the exemption of the sovereign from all Civil and Criminal  Laws of   another  State,  the  Judicial  Member  held  that   no assessment could be made on the assessee under the Act as he was  the  Ruler of a sovereign State during  the  assessment years under consideration.  In this view he did not  express any  opinion  on  the  question  of  the  legality  of   the proceedings under Sec. 34 of the Act.  The Accountant Member however, after considering the various provisions in the Act whereby  exemption  was granted to the Rulers in  regard  to certain types of income and the various decisions held  that the  assessee  was liable to assessment in  respect  of  his personal  income  arising or accruing to  him  from  British India  from his private properties.  He also held  that  the proceedings  under Sec. 34 of the Act were  perfectly  legal and  valid.   In  view-of the difference  of  opinion,,  the matter  was referred to the President of the Tribunal  under Sec. 5A(7) of the Act on the following question               "Whether on the facts and in the circumstances               of  the case the assessee was immune from  tax               under the Indian Income-tax Act on his private               income viz., dividends and interest income  as               also  the  Capital  Gains  earned  in  British               India." The President of the Tribunal held in favour of the assessee by relying on a decision of the Andhra Pradesh High Court in the case of H. E. H. Mir Osman Ali Khan Bahadur Nizam & Raj- permukh of Hyderabad v. Commissioner of Income-Tax(1), where it was stated thus :               "Indisputably,   a  sovereign   ruler   enjoys               immunity from taxation under International Law               and  it  is only in cases where this  rule  is               superseded  by express words that this  should               be  denied to him.  If a legislature wants  to               depart from these principles and bring such (1)  Case No. 35 of 1959. 19               ruler  to tax, there must be clear  indication               in  the enactment itself.  In the  absence  of               such  express  words,  the  statute  must   be

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             interpreted  in conformity With  International               Law.   Simply because the Municipal  Law  did’               not   provide  for  such  an  exemption,   the               principles of International Law should not  be               regarded as having been superseded". In the aforesaid view the Andhra Pradesh High Court had held that notwithstanding the fact that His Exalted Highness  the Nizam had lost the character of a sovereign ruler after  26- 10-1950, he is still immune from taxation in respect of  the income derived by him prior to that date. Following this decision the President held that the assessee was  immune  from  taxation under the  Act  on  his  private income.   In view of this decision on an application by  the Revenue  under Sec. 66(1) of the Act the following  question was referred to the High Court :-               "Whether on the facts and circumstances of the               case, the assessee was not liable to tax under               the  Indian; Income-tax Act, 1922, in  respect               of his personal income accruing or arising  to               him  in  British India in the  two  assessment               years 1946-47 and 1947-48." The  High Court relying upon the decision of this, court  in Commissioner  of Income-tax, Andhra Pradesh v. H. E. H.  Mir Osman  Ali  Bahadur(1), which reversed the decision  of  the Andhra Pradesh High Court referred to and relied upon by the President of the Tribunal held against the assessee.  It  is contended before us that the facts and circumstances in  the Nizam’s case are totally different and the decision of  this Court  is  clearly distinguishable.   The  learned  Advocate contends  that in that case the assessments related  to  the assessment  years  1950-51 and  1951-52,  the  corresponding accounting year for which was the, period between 1st  April 1949 and 31st March 1950, and 1st April 1950 and 31st  March 1951 respectively, which years being after the  inauguration of  the Constitution on 26th January 1950, clearly make  the Act which was made applicable from 1st April 1950 to all the Part  B  States,  applicable to  the  assessee.   But-it  is submitted that in the case before us there could be no ques- tion  of Act being made applicable to Faridkot State as  the assessment  years and the accounting years are prior to  the inauguration of the Constitution and the application of  the Act.  The learned Advocate cited a large number of decisions in support of his contention that the Native States in India had International. (1) 59 I.T.R. 666. 20 personality and their Rulers had ’immunity similar to  those that  were  accorded  to any other Head  of  a  State  under International  Law.   It was also argued that  though  these princely States in India may have been ’protected States; it was not necessary for the recognition of the privileges  and immunities  of the Rulers of such States to possess all  the attributes  of  sovereignty  and  complete  independence  in support  of  which the decisions of Mighall ,v.   Sultan  of Jahore(1), Duff Development Co. Ltd. v. Govt. of Kelantan  & Anr.(2),  Stathem  v.  Stathem  &  H.  H.  the  Gaekwad   of Baroda(3),  were  referred to.  It was  therefore  contended that in this country also the position was the same as  that recognised   by  the  Common  Law  of  England   for   which proposition, decisions were referred to from Punjab Recorder onwards.   A  reference  was  also  made  to  several  cases pertaining more specifically to the immunity enjoyed by  the Rulers  from  payment of Income-tax on the  basis  of  their status  under  International Law.  These are :  The  Patiala State  Bank v. Commissioner of Income-tax,  Bombay(4),  Rani

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Amrit Kunwar v. Commissioner  of Income-tax, C.P. & U.P.(5), The  Accountant  General, Baroda State  v.  Commissioner  of Income-tax,  Bombay  City(6), A. H. Wadia, as Agent  of  the Gwalior  Durbar v. Commissioner of Income-Tax,  Bombay  (7), and Maharaja Bikram Kishore of Tripura v. Province of  Assam (8). On behalf of the Revenue reliance is placed on  Commissioner of  Income-tax  Andhra  Pradesh v. H. E. H.  Mir  Osman  Ali Bahadur(9),  to sustain the Judgment under appeal and it  is conceded  that  if this decision was not applicable  to  the facts  and  circumstances  of this  case,  the  position  as contended  by the assessee would be that the  Indian  Rulers prior  to  the  Constitution  were  granted  immunity   from taxation,  and  in any case this was so in  respect  of  the income from the property of the State as, distinct from  the private or personal property of the Ruler though there  were observations in some- of the cases that it was difficult ’to distinguish public or private property owned by a ruler. At  this  stage  we  think it necessary  to  advert  to  one argument .adduced on behalf of the assessee namely that  the Income-tax authorities-particularly the Income-tax  Officer, had  accepted the International status of the  assessee  and the immunity from .taxation of income from public  property, but only rejected the claim for such immunity in respect  of income  from private or Personal property.  It is  therefore contended that the status of (1)  [1894] I. Q. B. 149. (3)  (1912) Probate 92. (5)   XIV ITR 561. (7)   XVII ITR 63. (9)   59 I.T.R. (2)  [1924] A. C. 797. (4)  XI ITR 617. (6)  XVI ITR 78. (8)  XVII ITR 220. (9)   59 I.T.R.666 21 the assessee as an international personality is not in issue before.us  s,  what is in issue is whether his  income  from private  property is exempt from taxation.  We do not  think this  contention has, validity, because the High  Court  has specifically   While   rejecting,  the   second   contention addressed on behalf of the assessee ruled;, that the  status of  the assessee as a ruler of the Indian State could.’  not be  equated with that of a sovereign in  international  law. Even  the  reference  to the High Court does  not  limit  or circumscribe  the matter for consideration as contended  for but on the, other hand enables us to deal with the  question whether  as an, erstwhile ruling prince the assessee can  at all be entitled to the.. immunity from taxation. In considering the question referred to by the Tribunal it,, may be useful to examine briefly the basis and extent of the privilege   and  immunity  enjoyed  by  Head  of  State   in International Law, particularly having regard to the lengthy arguments.  addressed before us.  In International  Law  the Head of a State,. represent* the State as such and not as an individual representing his own rights.  In that capacity he enjoys certain extra, territorial privileges in other States which  are  friendly and in peace, known  as  the  receiving States, with the State he represents.  These are, ceremonial honours  for  himself, the Members of his,  family  and  his retinue;  special protection to his person,  and’  exemption from  Criminal  jurisdiction;  the  grant  of  extra  terri- toriality, on the basis that one sovereign does not have any powerover  the other, such as immunity from filing of  suits

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against him except where he is himself a plaintiff and from. other  civil processes; exemption from taxation  rating  and other  fiscal enactments and the invilobility  of  immovable property  in which he of, the representatives of  the  State accorded  diplomatic  immunity. reside etc.  Some  of  these privileges  and immunities are political and  are  generally the  subject  of executive and  administrative  instructions such  as  ceremonial honours, Police  protection.  exemption from  customs  in  accessability  of  their  residences   to officers  of  Justice, Police or  Revenue  officials  unless consented  to by them.  There are yet others in relation  to the  applicability of the Municipal Laws, the immunity  from which  are  either recognised by the Common  Law  and  which Courts will not enforce as. in England or are dealt with  by those laws themselves by affording the necessary  exemption. There  are yet others which may be regulated by Treaties  or international  covenants.   Whatever  may  be  the   various aspects of the immunity and privileges enjoyed by the  Heads of  the State under the Laws of the Country where  questions relating  to them arise, what we are concerned with  at  the very thresh-hold of this argument dealing with the  immunity is whether the rulers of the erstwhile native States as. 22 they  were called enjoyed the same or similar privileges  as those  ,of the Heads of States recognised as Members of  the family  of nations ln International Law.- It is  clear  from the  very  nature of the native States in ’India  that  they were  subject to the sovereignty and protection  of  British Crown.   While their relations with the Crown were  governed by treaties, though initially on terms of equality, as  time went  by and the British Crown in India  ,became  paramount, the  relationship between it and the Rulers ,became  unequal with  the result that these treaties became subject  to  the reservation  that  they  could  be  disregarded  where   the interests of the British Empire or those of the subjects  of the native States were involved. When the Nizam claimed equality with the British Crown,  the then  Viceroy Lord Reading informed him on 27th  March  1926 that  "The  sovereignty of the British Crown is  supreme  in India  and  therefore  no  Ruler  of  an  Indian  State  can justifiably  claim to negotiate with the British  Government on an equal. footing".  After giving a few illustrations  to negative  the claim of the Nizam, the Viceroy  proceeded  to observe   "other  illustrations  could  be  added  no   less inconsistent than the foregoing with the suggestion that the Government  of  your  Exhalted  Highness  and  the   British Government  stand  on  a plane of equality  ...  (1).   This paramountcy  was  described by Shah, J, as he then  was,  as "brazen faced autocracy" in H. H. Maharajadhiraj Madhav  Rao Jivaji  Rao Bahadur of Gwalior etc. v. Union of  India  (2). What  then  becomes of the claim of these  States  or  their rulers  to recognition. as International  personality.   The answer  to this specific question is furnished even  towards the  end  of the 19th Century.  The status of  these  native States as International personalities was negatived. in  the Notification of the Government published in Gazette of India Part  1,  dated 21st August, 1891 at page 485, which  was  a resolution containing a proclamation regarding the trial  of accused  persons in Manipur and the regrant ,of the  Manipur State.  In this regard the following passage at page 488  is of interest :               "The principles of the International law  have               no  bearing  upon the  relations  between  the               Government of India as representing the Queen-               Empress on the one hand, and the Native States

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             under  the  suzerainty of Her Majesty  on  the               other.  The paramount supremacy of the  former               presupposes  and implies the subordination  of               the  latter.   In the exercise of  their  high               prerogative, the Government of India have,  in               Manipur  as  in other  protected  States,  the               unquestioned right to remove by (1)  Vide Appendix I of the White Paper on Indian States. (2)  [1971] (1) S. C. C. 85-p. 161. 23 .lm15 administrative order any person whose presence in the State, may seem objectionable.  They also have the right to  summon a  Darbar  through their political  representative  for  the purpose  of declaring their decision upon matters  connected with  the  expulsion of the  ex-Maharaja....  through  their Officers." After  stating that any one resisting the decision  and  not complying  with  orders  will  be  liable  to  arrest,   the declaration went on to say               "In  the  opinion of the  Governor-General  in               Council  any armed and violent  resistance  to               such  arrest was an act of rebellion, and  can               no more be justified by a plea of self-defence               than  could  resistance to  a  police  officer               armed  with a Magistrate’s warrant in  British               India." In  the recent case of this Court in H.  H.  Maharajadhiraja Madhav  Rao  Jivaji  Rao  Scindia  Bahadur  of   Gwalior(1), referred to above the majority expressed the view that  "the States  had no International personality".  Nonetheless  the status of these rulers in England was recognised as being on par  with  other Rulers in the matter of  personal  immunity from being sued in their Courts.  In so far as British India was  concerned  these were governed partly by  Acts  of  the Legislatures particularly the provisions contained in  Civil Procedure Codes and by Notifications of the executive  under taxation  laws  as well as by  executive  or  administrative instructions relating to their privileges. It  is therefore apparent that in so far as this country  is concerned  the  immunity  from  legal-proceedings  which  is recognised in the common law has been the subject matter  of legislation  under  which  the  ruling  princes  of   India, notwithstanding   that   they   were   not   recognised   as International  personalities,  were  however  accorded  this immunity.   Sec. 433 of the Code of Civil Procedure of  1882 and  subsequently Sections 84 to 87 of the  Civil  Procedure Code of 1908 deal with these matters.  Gajendragadkar, C.J., in  Mirza  Ali  Akbar  Kashani v.  United  Arab  Republic  & Anr.(2),  cited with approval the observations of  Strachey, J, in Chandulal Khushalji v. Awed Bim Umar Sultan Nawaz Jung Bahadur(3),  as  correctly representing the  result  of  the provisions of Sec. 433 as much as of those contained in Sec. 86(1).  It may be mentioned that Strachey, J, after pointing out  that in India before the enactment of Sec. 433  of  the Code,  the privilege of independent sovereign princes  stood on exactly the same footing as in England, observed (1)   [1971] 1 S.C.C. 85-p. 161.    (2) [1966] 1 S.C.R. 319. (3)   21 I. L. R. Bom. 351 at 371-372. 24 .lm15 "No  doubt  the  question of privilege now  depends  on  the construction  of Sec. 433, and I am alive to the  danger  of pressing too far an analogy between a rule of  international law and a specific enactment of the Legislature."

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It  is  apparent  from a perusal of Sec.  86  of  the  Civil Procedure Code that there is no absolute prohibition against a Ruler of a foreign State being sued in India.  A Ruler can be sued with the consent of the Central Government certified in  writing by a Secretary to that Government.  It  is  also provided  that  such consent should not be given  unless  it appears  to  the  Central  Government  that  the  Ruler  has instituted  a suit in the Court against the person  desiring to sue him or by himself or another, trades within the local limits  of the jurisdiction of the Court, or, is in  posses- sion  of immovable property situate within those limits  and is to be sued with reference, to such property or for  money charged  thereon, or has expressly or impliedly  waived  the privilege accorded to him by this Section. In  view of these provisions the several cases cited by  the learned  Advocate for the assessee which deal with  immunity from suits against ruling princes under the English law have no application. In  so  far as the question whether there exists a  rule  of international  law exempting a State, or the property  which it  owns,  from taxation by a foreign State,  is  concerned, there  seems  to  be no uniform  practice  followed  by  the various States.  It is however suggested that immunity  from taxation   "appears  as  a  logical  accompaniment  of   the principle  of immunity of foreign State owned property  from judicial  process"  and  on this basis it is  sought  to  be contended  that even personal, private property of the  Head of  a State is exempt.  It is unnecessary for us to  examine this position because even if there was such an immunity the Rulers  of an Indian State could only avail of it,  if  they are  recognised as international personalities which, as  we have  seen, they are not.  Any exemptions which they may  be given, must, in our view be under the relevant taxing  Acts. The  learned  Advocate for the Assessee however  points  out that  if the Rulers of Indian State were not  exempted  from tax  apart  from the statute, there was no need  to  make  a provision  in Sec. 3 of the Bengal  Agricultural  Income-tax Act IV of 1944, specifically making every Ruler of an Indian State liable to Agricultural Income-tax.  On the other  hand it  would  appear  to us that this  provision  would  itself militate against the assumption of immunity from taxation of the  property of the Rulers and at any rate the  legislature may  have been acting ex abundanti cautale.  It may  however be noticed that in so far as the Income-tax Act is 25 concerned exemption of the Income of the Ruters derived from Central  Government securities was specifically given  under Sec.  60 of the Act which implies that the Rulers  were  not exempt  from  other provisions of law.  This  position  also finds support from a case cited by the learned Author on the "Immunity  from taxation on foreign owned Property"  in  the Americal Journal of International Law XLI at page 239, where the  Suppreme  Court of Ceylon in the Suprintendent  of  the Government  Soap  Factory,  Bangalore  v.  Commissioner   of Income-tax,  held  that  the profits ade in  Ceylon  by  the Mysore  Government  Soap Factory could be  taxed  by  Ceylon without  violation of international law.  The  Ceylon  Court held   that  the  State  of  Mysore  had  no   position   in international law and could not,invoke any immunity  arising by virtue of international law’ In any case so far as, immunity from taxation of the  income from personal property of the Rulers of the Native States is concerned this is now concluded by a decision of this  Court in  the  Commissioner  of Income-Tax,  Andhra  Pradesh  ’,v. H.E.H. Mir Osman Ali Bahadur(1).  In that case the  question

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directly  arose  as to whether the Ruler  of  the  Hyderabad State  prior to 26th January ’50 could claim  immunity  from taxation   under  international  law,  namely  whether   the assessee  enjoyed  immunity from taxation under the  Act  in respect  of income which accrued or arose to him, and  which was  received  by him upto 26th January 1950.   The  learned Advocate  for,  the  revenue had contended  that  under  the International  law, a foreign sovereing was not immune  from taxation  in respect of his private properties  situated  in the  Taxing State; even if there was such an immunity  under the   international  law,  the  assessee  being  under   the suzerainty  or  ,he paramountcy of the  British  Crown,  had never enjoyed the status of a sovereign as understood in the international  law and, therefore, was not governed by  that law; and that in any event, as on January 26, 1950, the date when  he became liable to tax, he was no longer a  sovereign and  therefore  he  could  not  claim  exemption  under  the international  law.  Respondent’s Advocate claimed that  the assessee  was  not liable to Income-tax on the  ground  that under  the  Act, income-tax was charged  on  the  assessee’s income  received  during  the accounting year  and  that  as during the accounting year the assessee was a ruling  chief, he was exempt from taxation under the international law.  He argued  that under the international law, as  understood  by English   Courts,  a  foreign  sovereign  was  exempt   from taxation, that the said interpretation of the law had become the  common law of England and that the said common law  was the law of India before the Constitution and it continued to have force thereafter reason of Article 372. (1) [1959] I.T.R. 666 256SupCI/72 26 We  have noticed these contentions to show that there is  no validity  in the submission of the learned Advocate for  the assessee, that that question did not directly arise in  that case  because  the Nizam was being assessed  in  respect  of assessment  year  1950-1951 and 1951-52, when he was  not  a ruling  prince.   This Court  specifically  dealt  with-this matter as can be seen from the observations of Subba Rao  J, as he then was at page 670               "International’ law vis-a-vis the liability of               a  sovereign  to taxation in  respect  of  his               private   property   is  in   a   process   of               evolution’.   It  has  not  yet  become   cry-               stallized." After referring to Halsbury’s Laws of England, 3rd  Edition, Volume 20, page, 589 and Oppenheim’s International Law,  8th Edition, Volume 1, page 759 and the Article on immunity from taxation  of  foreign State owned property in  the  American Journal  of  International  Law, to which  we  have  already adverted,.  observed  "that the question is  not  free  from difficulty  and that it requires serious consideration  when it directly arises for decision.  Assuming for the  purposes of these, appeals that a foreign sovereign who has  acquired an  international-  personality has such  an  immunity  from taxation,  he proceeded to examine the question whether  His Exalted  Highness the Nizam had ever acquired  international personality.   After examining the position he concluded  at page  675  :  ". . . that Hyderabad State  did  not  acquire international personality under the international law and So its  Ruler  could  not  rely  upon  international.  law  for claiming   immunity   front   taxation   of   his   personal properties". We  are not here concerned with the alternative argument  in that  case,  that  the Act having applied to  the  State  of

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Hyderabad-,  after the inauguration of the  Constitution  on ‘6h  January  ’50,  the  charge as well  as  the  manner  of computation of income did not depend on the pre-existing law but  only  upon the provisions of the Act because  in  these appeals that question does not arise. in  view of this legal position we do not propose to  burden this Judgment with any detailed examination. of the  several decisions  of  the  High  Courts which  were  prior  to  the decision  of  this Court cited by the  learned  Advocate  in support  of  the  proposition that the ruling  chief  of  an Indian State has the same immunity from taxation as  enjoyed by  other  foreign sovereigns.  Two of  ’those  cases  arose under  the  Government  Trading  Taxation  Act  1926   where different considerations were applicable (The Patiala  State Bank  v.  C.I.T., Bombay(1), A. H. Wadia, as  Agent  of  the Gwalior  Durbar v. C.I.T., Bombay (2).  At any rate  in  one other  case  i.e. in Maharaja Bikram Kishore of  Tripura  v. Province of Assam(3), a distinction was sought to be drawn (1) XI I.T.R. 617. (2) XVII I.T.R.63. (3) XVIT I.T.R. 220. 27 between  the property of the State and the private  property of the ruler.  In that case the question whether the  income derived  from  Chakla Roshanabad Estate was  liable  to  tax under Assam Agricultural Income-tax Act, by assessment  upon the  State  of  Tripura or by assessment  on  the  ruler  of Tripura.   It  was held that the Chakla Roshanabad  was  the State property and not personal property of the then  ruling Raja  who held it in his capacity as a Ruler.  No  doubt  in the other two cases refunds were not given for tax  deducted at  source  on  the assumption that,  the  Rulers  were  not assessees. In  the view we have taken the answer of the High  Court  to the  reference  was  clearly  right  and  the  appeals   are accordingly dismissed with costs-one set. S.N.                   Appeals dismissed. 28